The Investment Thread

[nate82]

I don't believe solar or wind power have a sustainable growth and you maybe able to ride the wave but I would get out as soon as you start seeing the stock dip. I wouldn't hold any solar stocks for the long term that industry just doesn't have the growth potential to support the high stock prices.

[Samurai Bucky]

Although we didn't get into Tesla early enough (when it was $70/share), we were able to get in a month or so over the recent 5 for 1 split. The thing is that Tesla is more than a car company -- they are solar, batteries, and more. Musk is using his technologies to reduce carbon and it makes sense... and is working. It also seems that Tesla is a bit of a novelty stock for millennials, too. They would rather own a piece of a company not necessarily because they are looking at dividends or P/E ratio, but because they want to be part of something else. I don't know when the price of many of these stocks will start correcting, but it will have to happen at some point.

 

I guess Musk's net worth increased more in the past 12 months than Bill Gates' entire net worth. Crazy...

[GAME05]

I'm way too jumpy and got out at $600. Maybe a good lesson to wait until things level off. I think it's valued at something like the second-biggest company in the US right now. Saw an internet post recently of a young kid who had $65 to his name and wanted to get into investing, so of course he bought Tesla. But it makes me wonder when there's eventually a hiccup, if all the fractional shares left at once, what sort of difference might that make.

 

The EV explosion does make me think about becoming a nickel miner, though. Thinking about Vale right now. Debt, but they've spent a lot of it on environmental stuff, which is obviously more inviting to Tesla than that one big nickel company in Russia which turned a river red. There's one EV company in China that's getting huge, but I kinda also don't want anything to do with China.

[owbc]

I think it's really cool that the optimism and hype for Tesla's technology drove people to invest in and believe in what Tesla stands for. Elon Musk is a big reason why batteries have come down in price much faster than expected. And now all of the traditional automakers are rushing to try and catch up with Tesla. That wouldn't have been possible without all of the bullish investment, it's a bit of a self-fulfilling prophecy. Assuming the investment dollars continue to get re-invested into growth...

[young guns]

https://www.nytimes.com/2021/01/12/technology/bitcoin-passwords-wallets-fortunes.html The unforseen issue with bit coin. Remembering passwords

[GAME05]

I had some throwaway money so gambled on an OTC penny stock. 0.04 to 0.09 that day and then I jumped out. So now obviously I've convinced myself that they're always a winning bet /s. Of course it's at 0.4 now. I don't have fear of missing out so much as I often have regrets about getting out and then seeing it go up.

[owbc]

The current GameStop situation might be a turning point in the stock gambling game, as it seems that some savvy individual investors have acquired enough expertise to figure out the dirty tricks that hedge funds use to make money and crowdsource against them. Certainly fun to watch the transfer of wealth to random people on the internet.

[nodakfan17]

The current GameStop situation might be a turning point in the stock gambling game, as it seems that some savvy individual investors have acquired enough expertise to figure out the dirty tricks that hedge funds use to make money and crowdsource against them. Certainly fun to watch the transfer of wealth to random people on the internet.

That GameStop story is wild.

 

Basically a bunch of retail investors on Reddit colluded to buy up shares of GameStop stock and force institutional investors to buy GameStop at an inflated price to cover their short positions.

[homer]

I need to start reading Reddit more often. That stock has gone from under 20 to almost 150 in two weeks.

 

edit: and now it's over 200 in after hours trading

[nate82]

I had some throwaway money so gambled on an OTC penny stock. 0.04 to 0.09 that day and then I jumped out. So now obviously I've convinced myself that they're always a winning bet /s. Of course it's at 0.4 now. I don't have fear of missing out so much as I often have regrets about getting out and then seeing it go up.

 

You could always put a sell stop order in. For example if you bought stock A at $50 and then it runs up to $75 a share you could put a sell stop order in at $75 and if the stock keeps on going up it won't trigger but once it gets within a few fractions of $75 it will trigger that sale thus locking in your $25 per share gain.

[LouisEly]

I need to start reading Reddit more often. That stock has gone from under 20 to almost 150 in two weeks.

 

edit: and now it's over 200 in after hours trading

To quote Mortimer from Trading Places, "SELL!! SELL!!! SELL!!!!"

[nodakfan17]

I need to start reading Reddit more often. That stock has gone from under 20 to almost 150 in two weeks.

 

edit: and now it's over 200 in after hours trading

To quote Mortimer from Trading Places, "SELL!! SELL!!! SELL!!!!"

$300 as of 5:00 am ... this is just silly.

 

These guys are going to ruin commission-free retail investing for the 99.9% of individualis who do it responsibly.

[MrTPlush]

The significant other is starting a new job that has a 401k, but any potential amount they put in on their part has nothing to do on what you put in. There is a .125% asset based admin fee and then whatever you invest in has a fee. The investment options sound limited too.

 

Would she just be better off starting an account elsewhere? I know a bit about investments and retirement investing, but not sure the costs non employer sponsored plans have. Of course I’m not looking to go wild and have the ability to move funds around a bunch. Mostly just looking to let it sit in something that follows SP500/DOW as we aren’t close to retirement age.

[homer]

I need to start reading Reddit more often. That stock has gone from under 20 to almost 150 in two weeks.

 

edit: and now it's over 200 in after hours trading

To quote Mortimer from Trading Places, "SELL!! SELL!!! SELL!!!!"

$300 as of 5:00 am ... this is just silly.

 

These guys are going to ruin commission-free retail investing for the 99.9% of individualis who do it responsibly.

 

Looks like they're gonna take a few hedge funds down with them. GameStop is over $340 at opening bell.

[homer]

The significant other is starting a new job that has a 401k, but any potential amount they put in on their part has nothing to do on what you put in. There is a .125% asset based admin fee and then whatever you invest in has a fee. The investment options sound limited too.

 

Would she just be better off starting an account elsewhere? I know a bit about investments and retirement investing, but not sure the costs non employer sponsored plans have. Of course I’m not looking to go wild and have the ability to move funds around a bunch. Mostly just looking to let it sit in something that follows SP500/DOW as we aren’t close to retirement age.

 

I think you lose the pre tax advantage of the 401K....unless you are allowed to take it out pre tax and then invest it elsewhere but I am guessing that's not allowed.

 

Are you maxing out a Roth?

[nate82]

 

I think you lose the pre tax advantage of the 401K....unless you are allowed to take it out pre tax and then invest it elsewhere but I am guessing that's not allowed.

 

Are you maxing out a Roth?

 

I never put anything in a 401k that is pre tax to me it is just a dumb idea to pay the taxes later when you will be on a limited budget.

[homer]

 

I think you lose the pre tax advantage of the 401K....unless you are allowed to take it out pre tax and then invest it elsewhere but I am guessing that's not allowed.

 

Are you maxing out a Roth?

 

I never put anything in a 401k that is pre tax to me it is just a dumb idea to pay the taxes later when you will be on a limited budget.

 

Not sure what you mean. Do you put money in a 401K that is after tax? And if you get a company match you should darn well be invested in the 401K. That's free money whether or not it's taxed later on.

[MrTPlush]

The significant other is starting a new job that has a 401k, but any potential amount they put in on their part has nothing to do on what you put in. There is a .125% asset based admin fee and then whatever you invest in has a fee. The investment options sound limited too.

 

Would she just be better off starting an account elsewhere? I know a bit about investments and retirement investing, but not sure the costs non employer sponsored plans have. Of course I’m not looking to go wild and have the ability to move funds around a bunch. Mostly just looking to let it sit in something that follows SP500/DOW as we aren’t close to retirement age.

 

I think you lose the pre tax advantage of the 401K....unless you are allowed to take it out pre tax and then invest it elsewhere but I am guessing that's not allowed.

 

Are you maxing out a Roth?

 

You are correct she would lose that opportunity at pre-tax retirement savings, but the intention was to put it in Roth regardless. So that potential benefit to the employer 401k isn’t applicable in her case.

 

While I don’t think Roth is the slam dunk no brainer it is made out to be (depends on the persons goals/age/situation), she being so far off of retirement it is probably a safe bet to be the better scenario in the long run.

[nate82]

 

Not sure what you mean. Do you put money in a 401K that is after tax? And if you get a company match you should darn well be invested in the 401K. That's free money whether or not it's taxed later on.

 

It is all ROTH 401k which is all after tax so taxes when I take it out when I retire will be at a minimum so the match is still there.

[CheezWizHed]

Mostly just looking to let it sit in something that follows SP500/DOW as we aren’t close to retirement age.

 

If you go this way, look at Vanguard index funds. They have one to follow the S&P500 - extremely low fees and a simple online interface for managing it.

 

I never put anything in a 401k that is pre tax to me it is just a dumb idea to pay the taxes later when you will be on a limited budget.

 

I'll second what homer mentioned... if your company does a match of any sort, you are missing out on free money. That would trump ANY tax level decision.

 

But secondly, you need to reconsider your future tax situation - and I'd recommend talking to a professional in this area. If you are in a higher tax bracket now than you will be in the future, you are better off letting it grow tax-free and pay lower taxes later (noting that the income you would pay in taxes NOW will be growing interest over the years). If your future income is low enough, you won't have ANY taxes to pay later...

 

If you have a tax situation now where you are in a low tax bracket, but will jump later (i.e. high dependents now, none later, expect to have a huge nest egg that will outproduce your current income - putting you in a higher tax bracket), then you are better off in a Roth IRA (and pay taxes now).

 

But the considerations are complicated - thus my recommendation to talk to a professional.

[nate82]

I'll second what homer mentioned... if your company does a match of any sort, you are missing out on free money. That would trump ANY tax level decision.

 

But secondly, you need to reconsider your future tax situation - and I'd recommend talking to a professional in this area. If you are in a higher tax bracket now than you will be in the future, you are better off letting it grow tax-free and pay lower taxes later (noting that the income you would pay in taxes NOW will be growing interest over the years). If your future income is low enough, you won't have ANY taxes to pay later...

 

If you have a tax situation now where you are in a low tax bracket, but will jump later (i.e. high dependents now, none later, expect to have a huge nest egg that will outproduce your current income - putting you in a higher tax bracket), then you are better off in a Roth IRA (and pay taxes now).

 

But the considerations are complicated - thus my recommendation to talk to a professional.

 

Pre tax is the key word here. 401k's are not just pre tax accounts you can have a ROTH 401k that is all post tax. I don't really plan on retiring ever really I will still be working until I die or at least that is the plan. When I retire I will still be working so my income will be actually higher than what I am bringing in now. To me ROTH's are just a better option compared to your traditional 401k's. I have done enough research in this area for taxes that it doesn't really make much sense for what I want to do to put use a pre tax 401k selection post tax makes the most sense for me.

 

I still get my companies match so not losing money at all.

[homer]

 

Not sure what you mean. Do you put money in a 401K that is after tax? And if you get a company match you should darn well be invested in the 401K. That's free money whether or not it's taxed later on.

 

It is all ROTH 401k which is all after tax so taxes when I take it out when I retire will be at a minimum so the match is still there.

 

Ah ok. I max out a Roth and put into my 401K up to the match which is generous where I work.

[PeaveyFury]

Yeah, I think that's an 'individual circumstances' situation and not gospel. There are lots of people that would come out ahead with taking the deduction now vs. later if in a lower tax bracket in retirement as many are. As Cheezwiz noted, that's a tax advisor question depending on your situation.

[homer]

Mostly just looking to let it sit in something that follows SP500/DOW as we aren’t close to retirement age.

 

If you go this way, look at Vanguard index funds. They have one to follow the S&P500 - extremely low fees and a simple online interface for managing it.

 

I never put anything in a 401k that is pre tax to me it is just a dumb idea to pay the taxes later when you will be on a limited budget.

 

I'll second what homer mentioned... if your company does a match of any sort, you are missing out on free money. That would trump ANY tax level decision.

 

But secondly, you need to reconsider your future tax situation - and I'd recommend talking to a professional in this area. If you are in a higher tax bracket now than you will be in the future, you are better off letting it grow tax-free and pay lower taxes later (noting that the income you would pay in taxes NOW will be growing interest over the years). If your future income is low enough, you won't have ANY taxes to pay later...

 

If you have a tax situation now where you are in a low tax bracket, but will jump later (i.e. high dependents now, none later, expect to have a huge nest egg that will outproduce your current income - putting you in a higher tax bracket), then you are better off in a Roth IRA (and pay taxes now).

 

But the considerations are complicated - thus my recommendation to talk to a professional.

 

I think the other thing to consider is that no one knows what taxes will look like in 20, 30 years.

We are in a low tax era right now so it makes sense to shift from 401K to Roth but that doesn't mean it will stay that way. There are probably a lot of people that 20 years ago thought they'd be in a higher tax bracket now and they are not. Everyone's situation is different obviously.

[Fear The Chorizo]

To quote Mortimer from Trading Places, "SELL!! SELL!!! SELL!!!!"

$300 as of 5:00 am ... this is just silly.

 

These guys are going to ruin commission-free retail investing for the 99.9% of individualis who do it responsibly.

 

Looks like they're gonna take a few hedge funds down with them. GameStop is over $340 at opening bell.

 

Seeing stuff like this happening forces me to diversify a good chunk of retirement fund assets as far away from stocks/hedge funds/risk as possible without incurring tax burdens...if the system in place leads to these type of situations, the overall fundamentals that traditionally drive markets are completely out of whack. Right now it feels like the markets in general are priced to fit perfection based on printed money and optimism - and economic fundamentals (let along policy uncertainty) are very far from that being a reality. I'm not a market sage, but it sure feels like the best case scenario for market funds in 2021 is to largely tread water - and that makes me nervous. I'm at a spot where I'm not super close to retirement but need to start planning for it and my present risk tolerance can't really take a 30-40% haircut on my portfolio value coupled with a slower rebound than what happened in 2020 - so essentially my paycheck contributions I make at present and moving forward are still going into the more aggressive mix of mostly stock funds that I stuck with throughout last year....but a big chunk of my current plan balance got shifted into less volatile havens at the start of 2021 for the time being.