The Market Thread

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steross

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#1
Ok, I'm gonna give this a try and hope.

Rules that I know I have no power to enforce (how about we call them suggestions)
1. Theme of the thread is stock market and investing issues. That includes account types, timing or not. Maximizing retirement etc.
2. Politics are always involved in the markets but please try to keep it on topic (ie 2A rights regarding investing in Smith and Wesson but not just general complain about lack of gun laws)
3. Yes, some people are great at fundamental analysis and others technical. Some buy breakouts and others like to find undervalued gems. Some like options, others do not. Let's just try to help fellow pokes make money instead of pissing contests. Scroll by if you don't like something.
4. Lots of newbies, newbie questions are fine.
5. But, for the newbies, nobody has a magic 8 ball. If some suggests a particular security here, that means for you (or your advisor) to have a look. It doesn't mean go buy it and blame the person if it doesn't work out for the time frame you chose.

That last little dash down at the top is what has everyone frazzled. This is nothing to get worried about over time.
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Mar 11, 2006
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#4
I like this idea, Here are my personal rules for my personal retirement investing:

1) never try to time the market
2) put as much available cash in the stock market (maximize your 401k, and if eligible, maximize a Roth IRA for both you and your spouse
3) buy mutual funds and ETFs over individual stocks
4) buy funds that have extremely low management expenses
5) track performance on a quarterly basis.
6) make necessary changes in sectors, but no more often than quarterly
7) if you want a checking, only keep a minimum amount. Create a separate cash account for savings that actually earns interest.
8) insure your spouse knows all your accounts and passwords (or some other important person) in case something happens to you. Better off this should be in an official document.
 

okstate987

Territorial Marshal
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#5
So what is everyone's opinion of the fed increasing the balance sheet by 25%? Keep in mind that there has been roughly 8 months of "not QE" already, even when the economy is strong. Are we aboit to enter into a period of more bailouts and increased inflation?

I think we are.
 

Rack

Legendary Cowboy
Oct 13, 2004
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#6
Airlines are going to have to be bailed out since we have completely lost our cottonpickin minds...so are other companies in travel and entertainment related industries.
 

jakeman

Unhinged Idiot
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#7
Airlines are going to have to be bailed out since we have completely lost our cottonpickin minds...so are other companies in travel and entertainment related industries.

For me, now is not the time to be investing in individual stocks, but that is just my own personal opinion.

When I decide to get back in with my liquid assets it will be in contracts and ETF's.

I think an index tracking fund is going to be where my money finds itself. I'm bullish on small caps, I may be proven wrong.
 
Oct 30, 2007
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#8
The basic definition of gambling is placing a wager on something with an uncertain outcome in hopes of monetary gain. It doesn't matter if you're a value investor intending to hold 10+ years or a high frequency trader holding a fraction of a second, it all technically fits the definition of gambling. They just hold different levels of risk.

I'm curious, do you structure your investment plan to hedge during economic downturns, or do you just hold long term with the understanding that you'll be fine in the long run?
 
Oct 30, 2007
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#9
Airlines are going to have to be bailed out since we have completely lost our cottonpickin minds...so are other companies in travel and entertainment related industries.
The travel industry is taking a beating. Airline & resort stocks are deeply discounted now. Many are already down 40-50%. You would have to think that there will eventually be opportunity there when we reach the recovery period, but there's no telling how much they'll bleed until we reach that point.

During the financial crisis, Bank of America fell from $55 all the way down to $2.53. Less than a year later, it was back above $20. Over the past few weeks, Royal Caribbean's stock has dropped nearly 80%, and it could go lower in the coming months. There could be a significant opportunity there if they avoid bankruptcy.

The next several months should be really interesting.
 
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steross

Bookface/Instagran legend
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#10
Here is a dilemma that I have that I suspect cannot be solved but I'll toss it out there and see if there are any ideas.
I have been sitting on a significant amount of cash in Australian dollars. This is from income I earned working and the sale of a home there. The problem is I am now in the US and prefer this was USD. The AUD is much weaker compared to the USD than it was when I earned it. But, there is no tax loss in the exchange as there was no round trip.
My original plan was to invest in Australia in indexes until such time that the AUD has improved vs the USD then exchange to USD.
Turns out that while it isn't a tax loss while sitting in my bank account, at the point that I invest it, even in Australia, the IRS then considers that a currency investment and I would be taxed on any currency gain that occurs during the time of the investment.
So, now, with the market low, I plan on (soonish) biting the bullet and exchanging for USD (even at the horrible forex rates) so I can get it in the market as it is getting pathetic interest sitting in an account.

Any other ideas?
 
Aug 16, 2012
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#11
If I could suggest/request, I am sure there are many like me that have only a rudimentary involvement or understanding, so if acronyms could be limited, it would be appreciated. I am sure they are easy to understand once you know what they mean, but for guys like me...not so much.
 
Aug 16, 2012
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#12
Here is a dilemma that I have that I suspect cannot be solved but I'll toss it out there and see if there are any ideas.
I have been sitting on a significant amount of cash in Australian dollars. This is from income I earned working and the sale of a home there. The problem is I am now in the US and prefer this was USD. The AUD is much weaker compared to the USD than it was when I earned it. But, there is no tax loss in the exchange as there was no round trip.
My original plan was to invest in Australia in indexes until such time that the AUD has improved vs the USD then exchange to USD.
Turns out that while it isn't a tax loss while sitting in my bank account, at the point that I invest it, even in Australia, the IRS then considers that a currency investment and I would be taxed on any currency gain that occurs during the time of the investment.
So, now, with the market low, I plan on (soonish) biting the bullet and exchanging for USD (even at the horrible forex rates) so I can get it in the market as it is getting pathetic interest sitting in an account.

Any other ideas?
https://tenor.com/w7fB.gif

Yeah, maybe this thread is not for me
 

steross

Bookface/Instagran legend
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#13
If I could suggest/request, I am sure there are many like me that have only a rudimentary involvement or understanding, so if acronyms could be limited, it would be appreciated. I am sure they are easy to understand once you know what they mean, but for guys like me...not so much.
Sorry. And, yea, this particular situation is far more complicated than most of what would be discussed here. The IRS makes living overseas as an American tough.

Over the past several years I lived in Australia and was paid in Australian dollars (AUD).
I moved back to the US and now want those Australian dollars to be US dollars (USD) but have not yet exchanged them.
Unfortunately, since I earned them the exchange rate has fallen significantly. When I earned them 1 AUD = 0.90 USD or so and now 1 AUD = 0.63 USD.
There is no tax loss for that loss. Since I was paid in Australian dollars it isn't considered a FOREX (foreign exchange) investment.
I planned to just invest those dollars in Australia until the exchange rate improved. However, at the point I invest them (even in Australia), the IRS then considers that a currency investment. Therefore I could be paid at 0.90 and lose down to 0.63 with no tax loss then invest it in Australia and if the currency (not the investment) increased I would get taxed on the increase from 0.63 back to 0.90.

I do not see any way to avoid just exchanging at the lower exchange rate and putting it to work in our market. Just wondering if anyone else had ideas.
 
Oct 30, 2007
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#14
Here is a dilemma that I have that I suspect cannot be solved but I'll toss it out there and see if there are any ideas.
I have been sitting on a significant amount of cash in Australian dollars. This is from income I earned working and the sale of a home there. The problem is I am now in the US and prefer this was USD. The AUD is much weaker compared to the USD than it was when I earned it. But, there is no tax loss in the exchange as there was no round trip.
My original plan was to invest in Australia in indexes until such time that the AUD has improved vs the USD then exchange to USD.
Turns out that while it isn't a tax loss while sitting in my bank account, at the point that I invest it, even in Australia, the IRS then considers that a currency investment and I would be taxed on any currency gain that occurs during the time of the investment.
So, now, with the market low, I plan on (soonish) biting the bullet and exchanging for USD (even at the horrible forex rates) so I can get it in the market as it is getting pathetic interest sitting in an account.

Any other ideas?
I'm not that familiar with the rules concerning this. Can't you just open an account with a global brokerage firm like Interactive Brokers and fund it using AUD? That would allow you to start investing the capital without taking the foreign exchange hit.
 

steross

Bookface/Instagran legend
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#15
I'm not that familiar with the rules concerning this. Can't you just open an account with a global brokerage firm like Interactive Brokers and fund it using AUD? That would allow you to start investing the capital without taking the foreign exchange hit.
Ha, we think alike! That is exactly where the money is, Interactive Brokers. And, I started buying Vanguard ETFs (exchange traded funds) on the ASX (Australian stock exchange). Then my accountant told me that the exchange rate the day I bought those funds is the basis and when I sell if the exchange rate is higher, the IRS considers that a currency capital gain even though it all happened in Australian dollars.
 
Oct 30, 2007
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#16
Ha, we think alike! That is exactly where the money is, Interactive Brokers. And, I started buying Vanguard ETFs (exchange traded funds) on the ASX (Australian stock exchange). Then my accountant told me that the exchange rate the day I bought those funds is the basis and when I sell if the exchange rate is higher, the IRS considers that a currency capital gain even though it all happened in Australian dollars.
Gotcha. That sounds like a headache, but I guess there are worse problems to have.
 

steross

Bookface/Instagran legend
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#17
Gotcha. That sounds like a headache, but I guess there are worse problems to have.
Yea, it is a pain but you are right, I made some decent money on my beach house and spent nearly a decade in an amazing place so no complaints.

I was unlucky on exchange as when I moved there the AUD was $1.10 US. So, I was spending underpowered USD until I started making AUD then the AUD started dropping. One time, I was taking care of a big-time currency trader at one of the firms Sydney when the AUD had dropped from $1.10 to $0.85. I said, "If a hypothetical doctor had a bunch of USD but was in Australia, would you recommend he move them over to take advantage of the currency drop?" He paused as I think he didn't want to give free advice but quietly said, "I like greenbacks."

That little statement probably saved me more than 6 figures.
 

osupsycho

MAXIMUM EFFORT!!!
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#18
Yea, it is a pain but you are right, I made some decent money on my beach house and spent nearly a decade in an amazing place so no complaints.

I was unlucky on exchange as when I moved there the AUD was $1.10 US. So, I was spending underpowered USD until I started making AUD then the AUD started dropping. One time, I was taking care of a big-time currency trader at one of the firms Sydney when the AUD had dropped from $1.10 to $0.85. I said, "If a hypothetical doctor had a bunch of USD but was in Australia, would you recommend he move them over to take advantage of the currency drop?" He paused as I think he didn't want to give free advice but quietly said, "I like greenbacks."

That little statement probably saved me more than 6 figures.
Just brain storming here but is there another possibly physical item you could purchase there and then transport here and sell, that is more equivalent in value at each location (or even something more valuable here compared to there)? Of course not sure of laws on this and the cost of traveling to do so, if it was worth the amount we are talking.
 

bleedinorange

Banned
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Jan 11, 2010
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#19
Here is a dilemma that I have that I suspect cannot be solved but I'll toss it out there and see if there are any ideas.
I have been sitting on a significant amount of cash in Australian dollars. This is from income I earned working and the sale of a home there. The problem is I am now in the US and prefer this was USD. The AUD is much weaker compared to the USD than it was when I earned it. But, there is no tax loss in the exchange as there was no round trip.
My original plan was to invest in Australia in indexes until such time that the AUD has improved vs the USD then exchange to USD.
Turns out that while it isn't a tax loss while sitting in my bank account, at the point that I invest it, even in Australia, the IRS then considers that a currency investment and I would be taxed on any currency gain that occurs during the time of the investment.
So, now, with the market low, I plan on (soonish) biting the bullet and exchanging for USD (even at the horrible forex rates) so I can get it in the market as it is getting pathetic interest sitting in an account.

Any other ideas?
Well heck. That is a dilemma. Years ago when stocks were not impressing me I invested a sizable position (for me) in oil. I think it was around '99-'2000. The reason I did that was I was reasonably certain the oil stock wouldn't rise greatly but would be there for years to come paying a reasonable dividend. Ergo, I became a dividend whore. With that market now tumbling to roughly the same point it was then I'm comfortable with my choice. I have deposited dividend checks for 20yrs at an average of roughly 5% annually without any loss and an occasional bump. It's been the only "safe" stock investment I've ever made as luck would have it.
 

CPTNQUIRK

I'm Your Captain!
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#20
Ha, we think alike! That is exactly where the money is, Interactive Brokers. And, I started buying Vanguard ETFs (exchange traded funds) on the ASX (Australian stock exchange). Then my accountant told me that the exchange rate the day I bought those funds is the basis and when I sell if the exchange rate is higher, the IRS considers that a currency capital gain even though it all happened in Australian dollars.
Even if you exchange AUD to USD then invest, any gain when the market recovers would s be capital gain, wouldn’t it? I don’t see any advantage in waiting. Convert it and invest wherever you prefer.