Discussion in 'Business, Careers & Education' started by mikeman, Feb 2, 2011.
How is everyone's 401k performance YTD?
I'm 100% in an s&p index and am up 9.63% YTD.
Nice! You're almost double my returns (5.78% YTD). I'm 100% in STOCKS - large, medium, small, international, emerging markets, you name it.
I just can't bet behind this. This sounds like the marketing message a fund manager wants you to parrot. In your worldview any form of investing is gambling, you're just paying the fund manager to gamble on your behalf, and then have the double whammy of trusting not only the market, but also the manager.
In my life experience, nobody is ever going to provide more attention to your money than yourself.
UF can speak for himself, but I don't think that's an accurate characterization of what UF is saying.
But paying a lot of attention to our money because it's our money isn't necessarily a good thing. Because it's our money, we're also emotional about it and have pretty skewed perspectives. Plus there's the ego thing. I mean, most of us here -- including you -- are pretty smart guys. And we have emotional investments in thinking we're smart guys. But outsmarting yourself is a big danger in this context.
And bro, you apparently believe there is something to "technical analysis", which is the intellectual equivalent of snake oil. The very natural temptation to want to believe there's a magic elixir out there is reason enough to be wary of managing our own investments.
I figure that since managing the money is the fund manager's full-time job, he or she can do a better job than I can as an individual who just doesn't have an extra 40-60 hours per week to commit to it like the investment professional does.
Whoa. I've been trading KITE for the last 3 days... what a fucking roller coaster!!!!!
My entire portfolio, taxable and tax deferred, is up 8.27% YTD, according to Morningstar.
You've got it right. I don't disagree with IDFNL that people should be paying attention to their money and I am not advocating someone throw all their money into an actively managed fund by any means. My core message is that the vast majority of individuals would do better to follow the Jack Bogle philosophy and put their money to work in passively managed low expense funds. I'm not even sure there's a debate here. If you don't trust a fund manager (who generally get their jobs based on performance) to pick stocks, how could you think that you would consistently do better in your spare time? If professional fund managers can't beat the market on a risk-adjusted basis, why would any individual investor think they can regularly do so?
Like I said above, I don't have any issue with people picking stocks if there are positive externalities associated with actively managing your own investments. But if someone is just looking to put their money to work, the worst thing they can do is randomly listen to the "analysis" in this thread and throw their money into speculative investments. Very little of the discussion here is about fundamental analysis of the value of the asset underlying the stock. Individuals generally trade on symptoms, not on causes. The discussion of twtr over the last 6 months is a great demonstration.
None of this is personal. I enjoy reading this thread for entertainment value. IDFNL, you may be regularly beating the market due to your skill, I have no idea. I've beaten the market for years at a time (and overall based on my investment mix have done better than the overall market over my investing lifetime) but I attribute my success more to the fact that I've been willing to take on more risk and it's paid off. I don't think I have a special sauce other than the fortitude to ride out the storm. It could easily have gone the other way and at times certainly has. And of course, with all that said, I don't think I've done better than the market on a risk adjusted basis.
No idea what my YTD return is because Vanguard does not give me the gain information from my 401(k) rollover and my old account is defunct. Somewhere in the single digits is probably a good guess.
That's the fallacy of looking at a money manager as a professional who's better than you at managing money. We tend to see that a licensed professional is better than a lay person, such as a physician, dentist, plumber, or car mechanic, it's a heuristics that works most of the time; not so in finance and stock market.
90% of stocks are own by institutions nowadays, and there are tonnes of smart and driven people working on Wall St, looking for that edge. In order to outperform other money managers consistently, one has to maintain an advantage/edge over the other 99.9%. When information is transmitted at lightning speed, and everyone receives the same information within seconds of each other, you can see it's not possible to maintain an outperformance over long periods of time, even for a so-called "professional." (Except in the case of insider trading, then yes, you have better information than the other guys, but you're also likely to be prosecuted by the SEC.) Therefore, in aggregate, the money managers make up the market, and their returns in aggregate will be what the market gives, minus their fees.
As you can see, for us lay people, the smartest thing for us to do is to buy the whole market, ie index investing. I don't see it as a lazy way to invest, more like a smart way, because every Wall St typed money managers are working 24/7 to discover the price/value of every single stocks, without their hefty fees. In my portfolio, I have managers from Goldman, JPM, Citi, and other big name firms, working for me.
Mine was 4.8% or so. Seemed low but I can't find any way to get YTD breakdowns on the individual components...and the math is a bit of a pain to do since you have to account for biweekly inflows of new money.
Everything was up except an international fund. Largest single holding was in S&P500 index funds (and I have similar funds held in other accounts too). The bond funds in there are probably dragging it down a bit (I believe I am at 5% total bond market index and 5% in a junk bond fund).
this thread is the lolz. unless your pile of day trading finds is very sizeable, your theoretical "edge," if it even exists, is not worth the time you are spending to manage it. if you aren't spending enough time to figure out, define, and explain your edge, then you don't have one.
Unrelated, but here is a piece of advice from someone who works as a pm for a successful hedge fund and one of the best traders I know of. If you are going to reverse course on a position, be it a short or long, you should seriously consider, and probably implement at least 50%+ of the time the opposite position. So say you are long $TSLA but if you seriously believe that it is no longer a long, you should sack up and short it, or else how confident are you really?
me: i work in leveraged finance, own a few individual names, blue chips, nothing exciting and the rest is 80% stock funds, 20% bonds, 8.34% ROI ytd
I don't use it in some exclusive way in a vacuum. I've used varying types of technical analysis as a confirmation tool. The most common piece of technical information I use are support levels. I can't count the times I've moved out of a trade when the chart turned and saved myself the drop. And there have been times that I didn't gauge the sentiment well and the trade turned positive and I lost the gain. But there is snake oil to be had, for example the discussion of the S & P being above 2000, that's bullshit. The fact that just a minute ago the index hit a new all time high has efficacy.
The last thing I believe in is some form of magic to investing.
Yeah, I know. I was obviously pimping you a bit. But I do think that one of the insidious things about technical analysis and the like is they use fancy names like "technical analysis" and use lots of numbers and charts so people feel like they're being analytic, when if facts it's all (in my opinion) goofy-assed magical thinking BS.
But maybe that's because I could never tell a candle chart from a stalagmite chart from a rocket ship chart.
The vast majority of funds underperform the major indexes. I'm sure they're all talented, but they don't seem to perform.
I think it's because funds collect fees regardless of how the fund performs. No incentive to perform.
Lastly, fund fees are a pretty big drain on your gains. Index funds are an exception, but in general, it's a significant headwind.
No idea why you're characterizing people as having an "edge". Nobody has an edge, just beliefs, trading ideas and life experience.
Day trading is fun. That's the main reason I do it, and I don't do it every day, just thru opportunism. I also disagree with sizable sums. I enjoy the $1/share gain on a 100 share trade. I'll take every singe one I can get. I've done plenty of 5 minute trades that yield me $20. I had a discussion with a family member the other day about selling covered calls, he laughed out loud when I told him I was getting $20 for each BAC contract I had, I'm glad he laughed, because I guess that's my "edge"... I am willing to go after that easy .5% because I know the cumulative power of doing it.
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