Investing

[12RingKing]

Bringing this thread back up years later.

If anyone wants to review a case study over investing in individual equities vs index funds, here you go.

[muddydog]

Now is not the time to buy. I would sale and wait for a down trend, market is surging at all time highs. It will come, hold the cash and wait. Then invest in a S&P index fund or ETF. Nothing will out perform the SP 500 over time.

[Big pig]

I’m glad I’m using a pro. This market seems so inflated.
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[12RingKing]

Now is not the time to buy. I would sale and wait for a down trend, market is surging at all time highs. It will come, hold the cash and wait. Then invest in a S&P index fund or ETF. Nothing will out perform the SP 500 over time.

Time in the market beats timing the market.

in 2021 I was told what you just said. I lost out on a significant market upturn.

you can’t predict it. Sweating it and timing the market is foolish. Sure, it appears that the market is highly inflated, and I believe it too. However, look at history. If you want a good indicator, ^VIX. You might be surprised.

[RiverRat1]

I’m glad I’m using a pro. This market seems so inflated.
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Does the pro have you invested in stocks? in cash or what? Just curious.

Stock market is one big scam. I don't even think people argue that any more. It's just the only game in town so you sort of have to be in on it.

[axisbuck]

Riverrat1 Yes its a total scam dont get involved in the stock market! But for those who were involved since 2019 first post of this thread , here are the 5yr returns
AMZN (115%),
AAPL (330%),
NFLX(62%),
META (191%),
MSFT (278%)
NVDA(1778%)
There are some better than these i just picked what i had on my longterm portfolio. Time IN the market vs timing the market works better in the long game. I do day trade and have a long term portfolio and work a full time job. It can be done and depends on your risk tolerance and time frames. Saying its all one big scam is kind of a stretch!

[12RingKing]

Does the pro have you invested in stocks? in cash or what? Just curious.

Stock market is one big scam. I don't even think people argue that any more. It's just the only game in town so you sort of have to be in on it.

Dang… who are you talking to? They absolutely argue against what you are saying. The stock market can be the biggest wealth builder for the vast majority people. In fact, it is the biggest tool for sustainable wealth building for Americans. I’m not sure I follow how it’s a scam.

[miket]

Dang… who are you talking to? They absolutely argue against what you are saying. The stock market can be the biggest wealth builder for the vast majority people. In fact, it is the biggest tool for sustainable wealth building for Americans. I’m not sure I follow how it’s a scam.

IMO because it doesnt reflect actual value of a company. Its gambling. If a stock underperforms they drop it from the index to make the overall performance appear better.

Not saying I wont invest in it, and overall the returns are good, but its gambling, not true investing in a company

[12RingKing]

IMO because it doesnt reflect actual value of a company. Its gambling. If a stock underperforms they drop it from the index to make the overall performance appear better.

Not saying I wont invest in it, and overall the returns are good, but its gambling, not true investing in a company

Please continue. I still don’t quite understand. Please explain how an equity is removed from an index and why that happens.

can you further elaborate on how index’s work, the pros and cons of index funds vs. individual equities?

I need more information. You may be on to something.

[miket]

Please continue. I still don’t quite understand. Please explain how an equity is removed from an index and why that happens.

can you further elaborate on how index’s work, the pros and cons of index funds vs. individual equities?

I need more information. You may be on to something.

I know you are being a smart a so will post a link to get you started. You can do the rest yourself.

https://www.investopedia.com/article...%20the%20shift.

[12RingKing]

I know you are being a smart a so will post a link to get you started. You can do the rest yourself.

https://www.investopedia.com/article...%20the%20shift.

Nice article, however, you should refrain from making rash judgement on an entire system based on that article.

Here is a relevant comparison. If you owned a company and you had employees, would you fire someone if they were dragging you down and replace them with a more complimentary piece?

I fail to see how this index is a scam. If you purchase low cost index funds that capture the top 500 companies in the US, or even more broad, you win over time. If you picked individual securities that went belly up, I could understand your thoughts on the stock market being a scam.

I would love to hear more from you though. I’m still confused…

[miket]

Nice article, however, you should refrain from making rash judgement on an entire system based on that article.

Here is a relevant comparison. If you owned a company and you had employees, would you fire someone if they were dragging you down and replace them with a more complimentary piece?

I fail to see how this index is a scam. If you purchase low cost index funds that capture the top 500 companies in the US, or even more broad, you win over time. If you picked individual securities that went belly up, I could understand your thoughts on the stock market being a scam.

I would love to hear more from you though. I’m still confused…

Of course I would, and have. Do you think the current stock market is a reflection of business health and productivity, or artificially higher due to peoples 401k, market manipulation and people gambling that it will go higher?

Perhaps I see things differently because I have built a business that produced something. Earned the money based on actual value of the product rather than speculation. The stock market is run on speculation rather than true value.

Perhaps "scam" is too harsh of a word, but I cannot think of a better one at the moment.

[miket]

I will pick a ridiculous and absurd example Im sure you are familiar with. Do you feel Game Stop stock was worth $80 in 2021? After 10yrs of dropping revenue? Im no expert like you, but it seems to me they are on a decline. Looks like the year of their highest revenue ever resulted in a stock price under $4

[12RingKing]

I will pick a ridiculous and absurd example Im sure you are familiar with. Do you feel Game Stop stock was worth $80 in 2021? After 10yrs of dropping revenue? Im no expert like you, but it seems to me they are on a decline. Looks like the year of their highest revenue ever resulted in a stock price under $4

Good example. People decided who to invest in and how to invest it. That decision wasn’t made by money managers, it was done by people looking to hurt the system. It showed the world how powerful a collective could be in market manipulation.

We could pull many examples of inflated pricing in the market, but it doesn’t refute my prior claims. It’s the biggest wealth generator for most Americans today.

My point still stands…. In most cases, I believe that prudent investors are governing the markets. These groups utilize earnings calls and financial data to determine if a company’s valuation is right or wrong. Other times, trading can manipulate the market. People’s 401k’s, from my limited understanding, don’t do much trading on a daily basis.

[12RingKing]

Of course I would, and have. Do you think the current stock market is a reflection of business health and productivity, or artificially higher due to peoples 401k, market manipulation and people gambling that it will go higher?

Perhaps I see things differently because I have built a business that produced something. Earned the money based on actual value of the product rather than speculation. The stock market is run on speculation rather than true value.

Perhaps "scam" is too harsh of a word, but I cannot think of a better one at the moment.

Can you explain how I would fully understand what the true value of a company is, and how to calculate it?