Oldmanb777
New member
Besides real-estate, what's the current hedge against inflation?
Investment Opportunities
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Humble Leader
Senior Member
in an inflationary environment you want to buy value stocks. stocks that typically generate strong cash flows and pay healthy dividends. true growth stocks are generally not turning meaningful profits and spending cash to grow. high inflation = higher spending = more trouble for growth stocks
consumer staples stocks generally aren't too bad of a buy during inflation as they can increase the prices of their products easier than discretionary sectors. People need to eat, need to buy essentials, etc. they may buy less of whatever the staples are but they will still buy them
outside of equities there's always TIPS which are treasury inflation protected securities, indexed to inflation. gold or commodities also work
Predatorsniper2005
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JL Collins - A Simple Path to Wealth
mrblah
Senior Member
My investment strategy is income driven and heavily hedged as follows:
oil sector -->mREITS sector -->Tech sector (selling covered calls).
I take the dividends from oil (currently around 10 to 15k a month) and I dump it into mREITS sector. I then take the mREIT dividends (currently around 2k to 3k a month) and I dump it into the tech sector, which i then sell covered calls against. Everything has a stop loss in case of another black swan event. I never reinvest my dividends into the same sector (as a hedge), and I always buy at discount.
Alot of people have no idea on how to invest let alone try to get income on it. They focus only on the valuation of the stock (AMZN/GOOGL/TESLA) and forget about dividend stocks, when they should be looking at it first. Worse, people don't know how to reinvest their cash, and buy high and sell low..lol.
I found out that by investing in high yield dividend stocks when they are cheap, you increase your wealth (valuation of stock) and income (dividend/interest) over time (increase share count). I rather make money 3 ways instead of 1 way and during bear markets/recessions, it keeps my losses to a minimum,. I basically copy Warren Buffet's strategies. Collect dividends, reinvest dividends into distressed SECTORS, and then wait for the pop, then go buy something cool for the 4runner.
Investing is a side hobby for me, I do it for fun, and I make a shit ton of money from it. Only thing i can say is find a strategy that works for you, and stick with it. I didnt come up with this strategy or the funds to do this overnight.
Anyone wants to continue talking about money/investing, continue to post here. I LOVE TALKING ABOUT MONEY...lol.
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Oldmanb777
New member
Wow, I had to read that twice. Yes a great strategy. I have done some of that, but no where near as much or in depth. Down market, grab the reliable dividends, and reinvest them. The individual price of the stock, short term is not the goal, its more the number of shares bought with the dividend, at a bargain price and long term share price when it rebounds. I have done that sort of thing for a long time. I'll need to think on it for a bit. I'm slow that way, but great thoughts on it. Thx
mrblah
Senior Member
yup.
its very simple.
I also want to add that i never sell my positions, I let the stop losses do it for me, so it takes emotion out of it, and its a all or nothing event. So over time, my positions become massive..its literally a snowball effect, or exponential growth.
Fck all the guru's out there....the only advice i follow is Warren Buffett and his advice is literally free all over the internet. Read the strategy i outlined in the previous post, and then revisit some of his teachings and his words of wisdom, and it will all make sense.
People think i am insane until they see my money market account and I don't do this for a living...ROFL.
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MikeWilliam
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cryptocurrencies
Carten
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Which stocks with healthy dividends would you recommend to have a closer look at?
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Humble Leader
Senior Member
It depends on your strategy and investment objective. are you trying to maximize dividend yield or get some sort of alpha (excess return over some market benchmark) by picking the high yielding dividend stocks that also have the potential to outperform their peers?
generally I don't advise individual stock selection unless you have lots of excess cash to spend (aka lose), have experience with investing and aren't troubled by brokerage fees. I would look at ETFs if youre looking to buy and hold for a while. Vanguard, ishares for example. I am holding two vanguard dividend ETFs, a canadian dividend fund as well as a US dividend fund. The best dividend stocks will be ones that pay a high yield that have also increased their dividend annually. there are indices like the 'dividend aristocrat index' which tracks these exact companies. that's a good starting point. consumer staples and banks are generally good dividend payers S&P 500 Dividend Aristocrats | S&P Dow Jones Indices
I'm generally a growth equity investor, so higher risk. I rotated to about 20% into these two dividend funds which are both diversified to give me some protection in this uncertain market
Humble Leader
Senior Member
Have you ever considered investing in Bitcoin or any other coins? Or are they all scams in your opinion? I am thinking about investing in the stock market myself but it all seems much too complicated for me
I have considered bitcoin. I am not an expert in bitcoin but I know enough to know that it is not going to have a place (at least a large place) in my portfolio anytime soon. bitcoin, unlike stocks or commodities, has no underlying asset. it's value is largely driven by speculation. if I own a stock of a company and that company performs very well, the stock will likely rise, if it doesn't and strays far from peer comparables or its own fundamentals well there's arbitrage to bring the price back up to somewhat of a fair value. in short, bitcoin is a speculative investment. if you think it will be in demand in the future then buy it now. Ukraine, inflation, instability in bitcoin markets are not good for bitcoin right now. no more than 2% to 5% of a growth/value portfolio if you're feeling speculative is my hot take lol. I personally do not own any bitcoin directly nor do I have any holdings that invest in bitcoin. that might change, but a savvy investor never writes off an investment opportunity permanently, it's no for now, not no forever
the hardest part is starting. open a trading account with whoever is your main bank. buy some exchange traded funds to get a feel for a how transactions work. many banks offer very good access to research and technicals that you can use. yes you will pay probably $10 a transaction and yes there are platforms that are free, but starting out with your bank is a nice first step. if you have a self managed retirement account it's very similar
compound interest is the 8th wonder of the world. depending on your age and investment goals a few growth and value exchange traded funds can take you a long way. anything specific about starting out that is giving you angst. I've been active in all sorts of markets both professionally and personally from money markets, bonds to equities and alternative investments...
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Blackwatch
New member
I have been buying more bank of nova scotia. It has been paying around a 6.5% dividend and has never reduced it's dividend in 125 years. I hve it set on a div reinvestment plan (DRIP), no fees as it buys more bns stock every 3 months.
CougarHound
New member
I'm all in on vitacoco stocks.....Timing the market sucks. Remember all of the COVID predictions coming true??
Adesanja
Banned
I don't really have any angst about starting out, I'm just curious about the best way to get started. I know that I need to open a trading account, but I'm not really sure what the best way to do that is. I'm also curious about what kind of fees I would be charged for transactions.
I also don't really know much about compound interest, so I'm not sure how that would work in terms of my investment goals.
Thanks for your advice!
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Humble Leader
Senior Member
my suggestion would be to open a Roth IRA with whoever your main bank is, whoever you do most of your banking with. In Canada we have something called a tax free savings account. everything you put in there is not subject to taxes, unlike most regular brokerage accounts. the Roth IRA should be similar, it will have limits on how much you can put in there or withdraw but everything should grow tax free in that account. open a roth IRA, put a few hundred $ in a month and invest in index funds to start. you will likely pay a small monthly fee on your account but enough trades and that fee is waived (in Canada it's 3 per quarter, so not much). transaction fees will probably be around $10 per trade, which isn't so bad, all that will be laid out for you
if your goal is to save for retirement and invest funds you don't plan on withdrawing or don't plan on withdrawing very often, then a tax free structure is best. without a lot of buying and selling you won't incur a lot of fees either. careful though, if that tax man sees you using a tax free structure as a high frequency trading account (lots of short term holding periods) they will come after you
compound interest is a term that means you're earning interest on interest, basically reinvestment of any income which will then earn more interest and the cycle continues. easiest example is if you have a 10 year bond paying 5%, each year you reinvest that 5% interest into more bonds and do that every year for 10 years. it's a similar concept with stocks and reinvestment of dividends
TLDR:
- open a roth IRA
- put a few hundred in every month, whatever you can manage
- after you've got a few hundred in there, buy some value ETFs (blackrock, ishares, something simple to start). then buy some growth ETFs as well. it's better to do one trade of $500 than 50 trades of $10 (less transaction fees most likely - I pay a flat fee per transaction, regardless of value traded, I would assume Roth is similar and you can find that out easily)
- if you're nervous about losing $ or have a shorter horizon, high dividend ETFs will be a good play
- identify your ability to take risks (financially, mathematically what can you handle - ie do you need to buy a house next year and can't afford to lose any $ at all in the short term) vs. willingness to take risk (do stocks keep you up at night even though you've got a lot of savings and can tolerate market swings). this is important to help you shape your portfolio.
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mrblah
Senior Member
Update to my insane investment strategy.
I started looking into leveraged funds that mirrored the main indexes.
I'm buying into:
1. TQQQ, which mirrors Nasdaq x3
2. UPRO, which mirrors sp500 x3
3. SOXL, which is a semiconductor index x3
The goal is to mirror the entire market but have it leveraged 3x. I'm betting on a market recovery. If the doesn't happen, no big deal to me, it will allow me to accumulate more at cheap prices.
My overall strategy hasn't really changed:
1. Majority of my money is in oil, and i get a massive return via dividends that i reinvested into MREITS and REITS (although i have stopped) and now im looking into leveraged indexes.
2. My investments in MREITS and REITS are done. i have the dividends set on re-invest and i don't pay attention to them. I usually set accumulation goals and once i hit it, i leave it alone, and move on to the next thing to accumulate. Waiting on the feds and the housing market to stabilize. Hope for the best but expect the worse.
3. In 2023, my goal is to grow my positions in TQQQ, UPRO, SOXL, and distressed companies such as CS, and accumulate enough now when its cheap and falling.
4. i still play options from time to time, but i rarely do anymore.
In 2022, like others, my wealth / investment portfolio value declined but I still generated massive amounts of income (dividends) with my dividend strategy, and reinvested that income, so my losses in wealth were less than the overall market.
Point is: stick to a strategy and don't deviate from it. Keep a eye out for new opportunities. Also, dont be afraid to test your strategies to see what works and what doesn't.
cheers...
I started looking into leveraged funds that mirrored the main indexes.
I'm buying into:
1. TQQQ, which mirrors Nasdaq x3
2. UPRO, which mirrors sp500 x3
3. SOXL, which is a semiconductor index x3
The goal is to mirror the entire market but have it leveraged 3x. I'm betting on a market recovery. If the doesn't happen, no big deal to me, it will allow me to accumulate more at cheap prices.
My overall strategy hasn't really changed:
1. Majority of my money is in oil, and i get a massive return via dividends that i reinvested into MREITS and REITS (although i have stopped) and now im looking into leveraged indexes.
2. My investments in MREITS and REITS are done. i have the dividends set on re-invest and i don't pay attention to them. I usually set accumulation goals and once i hit it, i leave it alone, and move on to the next thing to accumulate. Waiting on the feds and the housing market to stabilize. Hope for the best but expect the worse.
3. In 2023, my goal is to grow my positions in TQQQ, UPRO, SOXL, and distressed companies such as CS, and accumulate enough now when its cheap and falling.
4. i still play options from time to time, but i rarely do anymore.
In 2022, like others, my wealth / investment portfolio value declined but I still generated massive amounts of income (dividends) with my dividend strategy, and reinvested that income, so my losses in wealth were less than the overall market.
Point is: stick to a strategy and don't deviate from it. Keep a eye out for new opportunities. Also, dont be afraid to test your strategies to see what works and what doesn't.
cheers...
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Mike Honcho
New member
Good ideas here. I’m very early 50s and have a lot sitting in bank accounts waiting for real estate to drop. And waiting and waiting. I feel like I should be doing something else to make my money work for me. Do these ETFs pay well? How much would I need to invest to get a certain % back and are you taxed just like income?
Humble Leader
Senior Member
let me try and break the questions out one at a time
do these ETFs pay well: Pay as in dividends? or pay as in generate returns (aka value of your share goes up)? paying well is also a relative term. if you are looking to make a real estate play in the near future I would try to park the funds somewhere safe. when the real estate market drops you want those funds to be ready and there I'd go something like 60% - 80% fixed income/safe and maybe 20% to 40% in a large cap or market index like SP500. the safest is generally a US treasury fund or high interest savings accounts. If you want a little bit more risk/upside potential or your horizon is maybe a few years out park anywhere from 10% to 30% into a large corporate equity fund index, the rest in low risk fixed income
how much for a certain % return: depends on your return target. if you want a 10% return per year well then you're likely going to need equities. it sounds like you have the $ and just waiting for the market to drop. in that case, juicy returns are secondary to preserving that capital. the old saying, 'don't gamble with what you can't afford to lose' applies here. vanguard has short term government credit funds that have low expense ratios (like 0.1%). I like vanguard - I have no affiliation with them and am not invested in any of their ETFs that are traded on US exchanges. I just think they have good products and very good detailed info about each fund freely available. ishares I like too
taxes: depends where your money is. I believe USA have Roth IRA which are investment accounts that are not subject to tax. Canada has something called a TFSA. post tax money goes in and can grow tax free. if you have access to these types of accounts use them but be sure to understand withdrawal limitations. it varies by country and as a Canadian I do not have any of those accounts. GENERALLY, in non tax exempt accounts, dividends are taxed as regular income (like a paycheck). I believe in USA capital gains are taxed at a fixed % based on how much income you have for the year. As a Canadian I'm not as familiar with personal US tax law
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