If the stock market tanks bigtime what stocks or investments are you considering buying at some point

[kuma]

17 hours ago, kuma said:

A great thread, thanks for starting it.

TallGuyJohn has a reply that really resonates with me.

I have for the past 6 or so years used the low maintenance, broadly diversified, dont touch, low cost ETF strategy, with a mix of bond funds, gold funds and equity funds with geographic diversity (US/CDA/INTL).

In Jan of this year I sold out to cash, frankly mostly from just being confused as to how the market was behaving - and also because I was going on an extended holiday and felt better being on the sidelines while trekking.

As it turns out the 'timing' of that was good, there have been only a handful of days since the sell date, 17.1.18, where my portfolio would have been higher (I still track it as it was for this purpose). 

The concept of timing the market, or the fact you cannot, is one I find hard to conceptualize. To me, every time you inject funds, sell a stock/bond/fund etc to get cash, rebalance or whatever, there is a timing aspect to it - I feel that all investors, retail or otherwise, try to make these moves when they feel comfortable with the existing level of their instrument, and many if not most will change their timing unless they are against the wall (margin call or some personal calamity). So I think there is always elements of timing in peoples calculations - maybe its just my definition of it is not in line with others.

I would like to put a few questions out to the crowd as well on this topic. As mentioned, I went to cash/capital preservation in Jan, and so far it has worked out for me (assuming in the intervening time I would not have changed my portfolio, which is a sound assumption). Now I am looking to find my re-entry point and strategy. I currently have my funds largely in CAD, and with a brokerage house offshore as I am a non resident therefore can do so. 

I am looking at moving to a new bank, one that is an offshore branch of a big US broker, which offers very very attractive trading costs and lots of other valuable services (including their research). 

1. To make this change, I would have to convert all my cash to USD. Now it is almost all CAD. I wonder about this and if the time and the FX now is as good as it will get (about at the 90DMA as of yesterday). There are so many global factors that could influence the CAD/USD now, and lots of volatility. But the thing is I want to be ready to exercise my new investment plan - and to do so now the leading contender in terms of a new strategy would have me changing banks and therefore having to do the FX conversion now. Comments on that would be appreciated.

2. My new plan (the one I am leaning toward) involves a departure form the broad based, balanced, buy and hold, total return ETF strategy, and a shift to a more active one with a greater focus on dividend paying ETF's and specific stocks that are 'dividend aristocrats' as John called them. I am thinking this as in the past decade the move from active to passive has been huge, and the flood of cash and investors moving to it conjures up thoughts in my mind of Warren's "be greedy when others are fearful, and fearful when others are greedy". It seems everyone is rushing to the passive bandwagon, and that maybe now is the time to buck that trend and put more effort into evaluating some individual stocks and raising the risk factor in the hope of more return (including dividends). I am loathe to jump back in this week, as I feel there is more downside in the current market than upside, but want to get ready. Would like to hear others comments on this as well.

 

I have to mention I am lucky in that I have a friend here that is an active player and I have watched him have great success (along the lines of what John mentioned) since 2002, by being here in Thailand and taking time to watch the market (not working) and making some smart moves based on research - and with a strong bias to dividend payers. He has also basically lived since 02 and has a net increase in his total asset value, as he adeptly moved in the market and lived off mostly dividends - and some capital appreciation realized - key...he made it thru the 08 plunge, again by having strong dividend plays that did not cut the payouts, so he could ride out the drop in face value of his holdings. Watching this experience has been a major influencer on my new proposed strategy. I am not working now, so I have the time and I have the background to do the analysis, just rusty from not suing it, but I can get back up to speed I hope.

 

Buffet mentioned other things that have influenced me to date. His rule 1 of dont lose money, followed by rule 2, see rule 1, was a factor in driving me to be defensive in Jan. He has mentioned that there are times you need to be patient and let an overheated market cool down - and indeed BH is now sitting on a $100B+ pile of cash, as they say they see no value out there. Now $100B is hard to swing around - I should be bale to find some value soon with my much more modest pile of $.

 

Ok that was a long post - lol. Happy to hear any and all comments. Cheers

 

 

 

Thanks for the replies so far, lots of good thoughts.

No takers on question #2 so far - interesting. Regardless of currency held, it will all end up as THB and as of now holding CAD or USD is a wash once converted to THB, so weighing all the factors, going ahead and changing banks seems the logical next step.

Cheers

[elgenon]

You didn't say your age. It matters. Dividend paying stocks and bonds.

[kuma]

13 minutes ago, elgenon said:

You didn't say your age. It matters. Dividend paying stocks and bonds.

Indeed that is a key piece of data, apologies.

Demographic here is mid 50's, finished with full time work - doing some PT gigs and looking to generate income off my base for cash flow.

Thanks

[Peterw42]

I'm out completely at the moment (Australian market), IMO its not if, its when. The speculative bubble will burst before the end of the year.

The US market is going up based purely on speculation, not companies showing growth or profit, if anyone is showing a better bottom line, its because they are making money from a speculative share market. Company XYZ hasnt had any growth, increased profit, invented a new product, Company xyz has just seen a rise in their share price.

An economy growing on the back of a speculative share market is not growing, expanding etc. The economy is growing because the stock market is printing money.

ACME shoe company has not invented a new shoe, opened a new factory, increased productivity, increased sales, opened new markets etc. ACME shoe company just happens to own some of their own shares, and the value of those shares has double for no reason, other than speculation. Acme shoe company has taken their money in the bank (from real profits) and instead of building a factory, they have bought some <insert Dow Jones listed company here> shares.

 

OP, a great position to be in, buy after the fall. Not a difficult exercise, just buy for the pre-bubble price, buy on the actual value of a company and real profit/dividends. Lots of shares will fall below their real value but any shares with good fundamentals will recover back to their real value.

Price to Earnings ratio is a great place to start, the relationship between what a share is worth and how much money it makes. Currently, you can spend $100 on a share for a $1 dividend, a 1% return and an indication the share is overvalued. If there is a fall and you can buy the same share for $10 and a $1 dividend, a 10% return. You just got the share for a more realistic value.

 

[j8k]

Here is my take on how things are going to play out.  The great deflation cycle that started around 35 years ago is about to end with a deflationary collapse. During those 35 years interest rates have fallen to lower lows and made investing in equity/property very easy (they have always gone to higher highs). However that has also caused people to go way way along the risk curve for yield.

 

The leverage on the system is beyond extreme. The Fed (and other central banks) missed out an entire tightening cycle, and in doing so have already made sure the recession dead ahead will see massive un-voluntary debt liquidation, a financial system in free fall and wealth destruction on a scale few can even imagine.

 

Leverage is going to destroy business and individuals on a scale not seen since the late 1920s. Once this does hit the central banks will be slow to react with the right response as they themselves will be shocked at the speed and scale. They will panic and print direct into the economy by passing money/debt to governments at 0.1% or zero coupons.

 

This is what will kick in the first reflation cycle since the 70s. Inflation will appear, rising slowly at first but increasing for perhaps a decade until it reaches double figures. Interest rates will follow, but being behind the curve perhaps through the whole cycle. The leveraged who survived the deflationary collapse will then suffer increasing interest rates for a decade.

 

Finally, invest in infrastructure, mining companies and silver. 

 

The above is not financial advice. Do your own research.

Edited October 20, 2018 by j8k

[Stargeezr]

Get out of the stock market, buy real gold, then after the crash and the

dust settles, invest in the new stock market.

  That is my older brothers advice and he is the one who dabbles in

the market.

Geezer

[Thailand J]

US big comp profits jumped double digits because of the tax cut and economic growth of 4% this year.

Next year the profit growth will be single digit when the tax cut effect wears off.

There is no bubble except the tech stocks.

the real treat is the increasing interest rate.

 

https://www.wsj.com/articles/u-s-corporate-profits-soared-in-second-quarter-boosted-by-tax-cuts-and-economic-growth-1535559230

Edited October 20, 2018 by Thailand J

[kuma]

3 hours ago, Thailand J said:

US big comp profits jumped double digits because of the tax cut and economic growth of 4% this year.

Next year the profit growth will be single digit when the tax cut effect wears off.

There is no bubble except the tech stocks.

the real treat is the increasing interest rate.

 

https://www.wsj.com/articles/u-s-corporate-profits-soared-in-second-quarter-boosted-by-tax-cuts-and-economic-growth-1535559230

For me it is a case of "I remember the days..." I no longer have faith in any of the "big/mass/mainstream/alt (more n more)/Etc reporting - on any topics really - so I can't even check that link anymore.....

[Thailand J]

If you dont have the nerves to stay in the market, then get out, enjoy the profit you have made of rising stocks in the past 9 years.

 

It is better to sell too early than too late .

 

US companies reported excellent earnings in Q2.. They are in the middle of reporting Q3 earnings. so far the earnings support the stock prices.

but there are real concerns: the rising interest rate, the pending trade war...

The years of eye poping stock returns are over..as Vanguard founder John Bogle said, we may be getting 6.5% return in the future years.

Treasury may be 4.5% in 2020, which will attrack investors away from stocks... including me.

 

May be this link works: https://www.forbes.com/sites/randybrown/2018/08/14/with-4-1-us-gdp-growth-what-comes-next/#39cdec89342d

 

Edited October 20, 2018 by Thailand J

[TallGuyJohninBKK]

Just saw this in the news today. Pertinent to this thread:

 

Quote

Schwab may start a no-fee index fund for retail clients: Credit Suisse

Oct. 19, 2018 3:02 PM ET|By: Liz Kiesche, SA News Editor

Schwab (SCHW +0.3%) may start a zero-fee index fund that can only be purchased by its retail clients, according to Credit Suisse analyst Craig Siegenthaler. That's instead of an ETF that could be bought through competitors' platforms.

Siegenthaler refers to comments by Schwab's CEO about client reaction to a competitor launching a zero-fee fund.

 

And Schwab's potential move apparently was spurred by one by Fidelity a couple months back:

 

Quote

Asset managers hit on Fidelity plan for zero-fee index funds

Aug. 1, 2018 11:41 AM ET|By: Stephen Alpher, SA News Editor

"Investors will pay a 0.00% fee, regardless of how much they invest in either fund, while gaining exposure to nearly the entire global stock market,” says Fidelity, announcing a Friday launch for the Fidelity Zero Total Market Index Fund and the Fidelity Zero International Index Fund.

 

Edited October 20, 2018 by TallGuyJohninBKK

[Skeptic7]

Went to Fidelity acct and FZROX Total Market Index is already closed to new investment.???? 

Already own their Total Market Index Premium fund and was gonna xfer it to the Zero Fee Fund, as mine has the "lofty" fee (relatively speaking) of 0.015%. 

[Thailand J]

It was closed to me right from the start.. My Fidelity account has a Thai address so I can only buy ETF's and stocks.

I just found out Fid also offers CD's and i am allowed to buy , not online but by calling. No fees. Very nice.... something I need when the fed is done raising rates in 2020.

Edited October 20, 2018 by Thailand J

[RickTik]

... natural resources ... commodities ....

[davidst01]

On 10/18/2018 at 4:24 PM, kenk24 said:

Choosing individual stocks and doing it properly is a job for a trained analyst, not so much for a casual investor... you are best off with well managed mutual funds... and time heals all wounds.

 

I have just recently, before the mini crash, moved to 50% in cash... about 20% bonds 30% stocks... as interest rates are rising it is nice to have some unflinching income. 

how did you buy bonds? I might want to invest in bonds when they crash more

thanks

[davidst01]

On 10/19/2018 at 2:14 PM, Thailand J said:

My biggest investment  is in Vanguard High Dividend Yield ETF, VYM.

The fund pays about 3% dividend, about 1% more then VOO and VTI.

The fund price is about 20% lagging VOO and VTI  in 6 years, may not matter to others but I wish I had everything in VOO or VTI.

Outside of index ETFs, I am afraid to hand pick just a few high dividend companies to invest in, look at AT&T, 6% dividend is inviting but how far the stock price is lagging compared to S&P 500 in just 5 years. If I am unlucky I may pick a company that may disappear all together...

 

 

 

 

3% dividend is a waste of time. You could have put it into facebook or netflix and made HUGE returns. Its what I did. Duly noted Im totally out of the market atm waiting for the crash. 

[janclaes47]

Just now, davidst01 said:

You could have put it into facebook or netflix and made HUGE returns.

Returns on Facebook are indeed astonishing.

 

[janclaes47]

23 hours ago, j8k said:

Here is my take on how things are going to play out.  The great deflation cycle that started around 35 years ago is about to end with a deflationary collapse. During those 35 years interest rates have fallen to lower lows and made investing in equity/property very easy (they have always gone to higher highs). However that has also caused people to go way way along the risk curve for yield.

 

The leverage on the system is beyond extreme. The Fed (and other central banks) missed out an entire tightening cycle, and in doing so have already made sure the recession dead ahead will see massive un-voluntary debt liquidation, a financial system in free fall and wealth destruction on a scale few can even imagine.

 

Leverage is going to destroy business and individuals on a scale not seen since the late 1920s. Once this does hit the central banks will be slow to react with the right response as they themselves will be shocked at the speed and scale. They will panic and print direct into the economy by passing money/debt to governments at 0.1% or zero coupons.

 

This is what will kick in the first reflation cycle since the 70s. Inflation will appear, rising slowly at first but increasing for perhaps a decade until it reaches double figures. Interest rates will follow, but being behind the curve perhaps through the whole cycle. The leveraged who survived the deflationary collapse will then suffer increasing interest rates for a decade.

 

Finally, invest in infrastructure, mining companies and silver. 

 

The above is not financial advice. Do your own research.

Your take on how things are going to play out????????

 

At least be so fair to give credit to the source of your copy and paste job.

 

https://www.housepricecrash.co.uk/forum/index.php?/topic/230095-deflationary-collapse-and-the-reflation-cycle-to-come/

 

[davidst01]

17 minutes ago, janclaes47 said:

Returns on Facebook are indeed astonishing.

 

Ha ha.... you cunningly select 3month outlook. I bought in at $82 and sold at $192. 

 

Ive been trading in and out of netflix for many years and made huge gains. 

 

The biggest mistake anyone could have made is not taking advantage of the 9 yr bull run on US equities. 

 

3% dividend is a JOKE. Not worth getting out of bed for that shit

[Peterw42]

24 minutes ago, davidst01 said:

3% dividend is a waste of time. You could have put it into facebook or netflix and made HUGE returns. Its what I did. Duly noted Im totally out of the market atm waiting for the crash. 

Facebook or netflix dont have a return or pay dividends, they have had speculative capital gain but not a return. A capital gain is different to a yield, return, dividend etc. That is sort of the problem at the moment share prices are going up based on nothing but speculation, they dont make money or pay dividends.

[davidst01]

1 hour ago, janclaes47 said:

Returns on Facebook are indeed astonishing.

 

jan47 is an amateur.

 

Collectively FB and google have over a trillion $ market cap chasing the global ad market 600bn.

 

 

Whereas, Amazon is a 860bn company chasing   1. U.S retail alone is 5 trillion $    2. Global retail 60trillion $ worth.   3. Amazon Web services? what is the figure for this sector. It must be billions or trillions. 

 

If amazon crashed in a market downturn along with everything else I think I will buy in big time. 

 

As I stated above, the biggest mistake is having missed out on investing in the 9 year bull market on U.S equities. Dont miss the next one once this market corrects/ crashes. 

 

To the OP, I recommend you listen to this guy:

 

https://www.youtube.com/watch?v=xuGwCUufxbU

 

He speaks a lot of sense.He says buy an income producing asset when its flat on its back ie after a crash.... a bond

 

IMHO to answer the OPs question BUY Amazon for sure!!!!!!

 

cheers

[janclaes47]

19 minutes ago, davidst01 said:

jan47 is an amateur.

 

19 minutes ago, davidst01 said:

He says buy an income producing asset when its flat on its back ie after a crash.... a bond

 

IMHO to answer the OPs question BUY Amazon for sure!!!!!!

And you call me an amateur?

 

Amazon has run losses as long as it exists, with last year the first one with a significant prtofit due to a massive tax cut of $790 million

 

 

19 minutes ago, davidst01 said:

As I stated above, the biggest mistake is having missed out on investing in the 9 year bull market on U.S equities.

 

Of course you knew 9 years ago that there would be a 9 year bull market.

 

 

What you seemingly have missed is that the gains in S&P, DOW and Nasdaq were generated by a handful of large cap stocks

 

https://www.investopedia.com/news/3-stocks-account-70-2018s-markets-gains/

[kuma]

9 hours ago, Thailand J said:

It was closed to me right from the start.. My Fidelity account has a Thai address so I can only buy ETF's and stocks.

I just found out Fid also offers CD's and i am allowed to buy , not online but by calling. No fees. Very nice.... something I need when the fed is done raising rates in 2020.

I bank outside Thailand - but the broker I have now is very conservative and a lot of offerings they just dont have - like money market for instance.

In the process of moving - Schwab has an International arm and Thai residents can open accounts - maybe you will find a broader range of choices with them.

[kuma]

3 hours ago, davidst01 said:

3% dividend is a waste of time. You could have put it into facebook or netflix and made HUGE returns. Its what I did. Duly noted Im totally out of the market atm waiting for the crash. 

Give me a risk free 3% all the time - will live fine and keep adding to principle...its these kind of products I am looking to move into next...thanks for mentioning them, I have them on my tracker now.

[1FinickyOne]

4 hours ago, davidst01 said:

how did you buy bonds? I might want to invest in bonds when they crash more

thanks

I have invested in both individual bonds through my bank and bond mutual funds which I am currently in... 

 

ps - I have friends who have waited lifetimes for a crash and lost a fortune by never being invested... and investing during a crash is intimidating too - - you never really know when the bottom is hit or not... 

[Thailand J]

VYM offers 3% dividend and also invested in large cap stocks riding the stock bull market in the 9 years.

 

 

Edited October 21, 2018 by Thailand J

[Thailand J]

3 hours ago, kuma said:

I bank outside Thailand - but the broker I have now is very conservative and a lot of offerings they just dont have - like money market for instance.

In the process of moving - Schwab has an International arm and Thai residents can open accounts - maybe you will find a broader range of choices with them.

I have a Schwab One International account, I did not see CD being offered there. I won't ask them now that i can buy it from Fidelity.  Thanks...

3 hours ago, kuma said:

Give me a risk free 3% all the time - will live fine and keep adding to principle...its these kind of products I am looking to move into next...thanks for mentioning them, I have them on my tracker now.

By 2020 the Fed would have done  raising rates, their target is 3.5%, meaning you should be able to invest in risk free income CD's or bonds and get 3.5% or more. This is good news for us retirees who are done with stocks, or looking for a place put the non-stock part of the portfolio. The wild card here is the inflation, what would it be in 2020.

[kuma]

43 minutes ago, Thailand J said:

I have a Schwab One International account, I did not see CD being offered there. I won't ask them now that i can buy it from Fidelity.  Thanks...

By 2020 the Fed would have done  raising rates, their target is 3.5%, meaning you should be able to invest in risk free income CD's or bonds and get 3.5% or more. This is good news for us retirees who are done with stocks, or looking for a place put the non-stock part of the portfolio. The wild card here is the inflation, what would it be in 2020.

I agree on the 3+% and the inflation card. To me if you get 3+% in risk free that means a portfolio mix - adding in some aristocrat bonds as JohnBkk mentions and some equity - ETF, Open or Closed end (or direct if you so choose) should help us along to a +/- 5% with very little risk - for me the inflation marker is the Thai market, and yes want to be ahead of that. It helps that many of the necessities are in place already, land, home, etc so that takes the edge off. In the end grow a lot of what we consume as well so the big impact inflation will have is on the finer things in life here in LOS - travel, eating out and the occasional woo hoo ???? are my keys to watch...those costs keep galloping along. 

[TallGuyJohninBKK]

21 hours ago, Skeptic7 said:

Went to Fidelity acct and FZROX Total Market Index is already closed to new investment.???? 

Already own their Total Market Index Premium fund and was gonna xfer it to the Zero Fee Fund, as mine has the "lofty" fee (relatively speaking) of 0.015%. 

 

Thanks... wow... that was fast!  I wonder if the closure of the Total Market Index fund to new investment is just a temporary one.

 

But either way, sounds like Schwab will be offering something similar pretty soon.

 

[Skeptic7]

48 minutes ago, TallGuyJohninBKK said:

 

Thanks... wow... that was fast!  I wonder if the closure of the Total Market Index fund to new investment is just a temporary one.

 

But either way, sounds like Schwab will be offering something similar pretty soon.

 

FYI. My transaction was to be x-fering all shares from Fidelity Total Market Index Premium to FZROX...within my ROTH IRA. This is when/where it stated closed to new investors. HOWEVER, it may be possible to buy in a non-retirement account. Been reading conflicting info on this very topic. May have to give Fido a jingle and talk to a Rep. 

[Skeptic7]

1 hour ago, TallGuyJohninBKK said:

 

Thanks... wow... that was fast!  I wonder if the closure of the Total Market Index fund to new investment is just a temporary one.

 

But either way, sounds like Schwab will be offering something similar pretty soon.

 

 

11 minutes ago, Skeptic7 said:

FYI. My transaction was to be x-fering all shares from Fidelity Total Market Index Premium to FZROX...within my ROTH IRA. This is when/where it stated closed to new investors. HOWEVER, it may be possible to buy in a non-retirement account. Been reading conflicting info on this very topic. May have to give Fido a jingle and talk to a Rep. 

OK...just got off the horn with Fidelity rep. It's not closed to new investors, but it's closed to those of us who have OLD Fidelity accounts (mine is at least 20 y.o.)...who don't have a "Retirement Brokerage Acct" (there was no such thing back then). My acct is a Mutual Fund acct, which don't exist today for new clients. New clients automatically get the "Retirement Brokerage Acct".

 

The rep said I can open such acct (free) and then transfer my existing IRA holdings from the old "Mutual Fund" acct to the Retirement Brokerage Acct...AND directly into the Zero Fee Funds!