Stock Market & Retirement Planning

[Speedliner]

Stock Market & Retirement Planning

In a year HP's stock will split as the company splits into two. With Dell struggling, IBM h/w now mostly Lenovo and 3D printing about to take off, is it a buy? Hoping so. As an employee I'd like to see it take off, but if it just splits and each new entity reaches the same value again it would be a great move. Not crazy about tech sector in general, but wondering if there is a wave to ride for 24-36 months.
http://time.com/3603348/hp-hewlett-packard/

Also watching Ford. The new F-150 comparison tests fall short of my expectations. Basically a tie with the Ram. Not the blow away the innovative design was hoping for. So watching Ford and f-150 sales. A lot songs on that. Get those stop orders in just in case.

 

[ironcondor]

Haha yeah I'm reviewing his report. He's wanting to move a chunk of money. PIMCO Total return fund to a Franklin. Pimco is heavily Government securities which is frightening.

Which Franklin fund? Is it still a core bond fund? One of Franklin's largest bond funds is the Templeton Global Bond A fund (TPINX).

PIMCO total return (PTTRX) is a core intermediate term bond fund and treasury bonds are a key holding in core bond funds. PTTRX currently holds ~33% of the fund in government-related securities, which is pretty normal. If government securities such as treasuries frighten you, what does Franklin hold instead of treasuries that doesn't frighten you? Treasury bonds are considered some of the safest investments out of the entire capital market structure - I'm speaking with respect to only the largest and most developed countries (US, UK, Canada, Germany, Aus, etc) of course. Trust me, if the US government debt actually defaulted, you don't want to own ANYTHING because of the ripple effect and deep foundation treasuries play in the markets. That said, I still only trust the government as far as I can throw it. Checking TPINX, it has over 60% in government-related securities - however, many of which are global and not as high quality (by quality, I mean the assessed risk of default which is a primary concern to bond holders).

So my question would be, if a fund is not holding treasuries, it's holding something else or some other flavor of governments...and that something else is probably "riskier" in the capital market structure. Make sure you're moving apples within apples, and not moving an apple into an orange. That is, unless of course you want to change your investment allocations to do that. There's nothing necessarily wrong with taking on more risk in the hunt for extra yield if you know that's what is going on. Since most funds are bound by their prospectus to a certain "strategy", what may work for your portfolio at one point in time may not necessarily be advisable at a different point in time.

Besides credit rating quality, what you want to pay attention to with bond funds is a risk metric called "duration". Simply stated, duration is expressed in years and reflects sensitivity of the bond/portfolio to a change in interest rates. Without diving in too much, in general a portfolio with a lower (ie. "short") duration stance will outperform higher (ie. "long") duration portfolios in an environment of rising interest rates...vice versa, a higher duration figure will realize higher performance in a falling rate environment. Most core intermediate bond funds have a duration in the 4-7 year range. Given that we are in a low rate environment already (albeit persistently right now), in the long term rates have nowhere to go but up. Therefore, it would be prudent to avoid a long duration type fund if you were concerned with rising rates in the near future (ie. ~10+ years duration). By comparison, a cash/money market fund typically has a duration of 0-3 yrs.

PTTRX has experienced some large outflows since Gross departed in September, but the fund has been well-positioned and large enough to absorb redemptions without it affecting performance. In fact, since the management change, it is beating 99% of peers, despite the media still salivating on all of the drama re: management changes there lately.

 

[Squints]

Besides credit rating quality, what you want to pay attention to with bond funds is a risk metric called "duration". Simply stated, duration is expressed in years and reflects sensitivity of the bond/portfolio to a change in interest rates.

Glad you brought this portion of it up. Important.

 

[ironcondor]

Anyone hop into the Lending Club (LC) IPO?

I like the model, at least from an operational standpoint if not from an investing standpoint. Peer to peer lending is not going to go away anytime soon. I didn't get any, but only because I'm not permitted to.

 

[Speedliner]

Watching InvenSense. It's at a low due to recent write downs, but poised to take off with the release of iWatch around the corner.

Hate that Motley Fool is talking it up though.

 

[Barberakb]

Anyone hop into the Lending Club (LC) IPO?

I like the model, at least from an operational standpoint if not from an investing standpoint. Peer to peer lending is not going to go away anytime soon. I didn't get any, but only because I'm not permitted to.

I didn't but might look into getting some.

Anyone buying oil?

 

[staticline]

I didn't but might look into getting some.

Anyone buying oil?

I thought about it. Or, at least getting into Exxon, Phillips 66 or similar. But, I don't like the games that OPEC is playing right now. So, I'm still on the sidelines. If I got in now, I'd want to only get in partially and then buy more if the drop continues. Or, buy more because an uptick might signify that the bottom has been hit.

I sold HOG this week at 68.8 and bought ANET (Arista Networks).

 

[ironcondor]

I have some oil production exposure but haven't touched it at all as I consider it a core holding and divs are paid.

I am watching to jump into oil, but right now its a falling knife...so I am not buying yet.


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[Speedliner]

Broker thinks oil still too volatile but is watching. Thinks with mid-east politics, Russo-Chinese politics and U.S. Production increases, it's just too unpredictable. He still love Oppenheimer Steelpath. Says the infrastructure to support increase domestic production is a big growth area and safer play than commodities now. Steelpath should takeoff again soon.

There is opportunity in volatility so I'm in Steelpath and will hedge with oil stocks eventually. Not just yet though.

 

[Wake]

Anybody recommend a great book for someone trying to jump into investing. I know the basic ideas, but am wanting to get a much deeper understanding before jumping in.

 

[JB]

If you are past the basics and want to go deeper, I enjoyed Get Rich Carefully. Its Jim Cramer from CNBC (and other things), and while he appears to be very polarizing (I get it I guess), the book was well done.

 

[Wake]

If you are past the basics and want to go deeper, I enjoyed Get Rich Carefully. Its Jim Cramer from CNBC (and other things), and while he appears to be very polarizing (I get it I guess), the book was well done.

Definitely not past the basics. But I will check it out for sure.

 

[pattyboy21]

I have not seen a thread like this in a while so figured it was time for one. I like the finance world and I like preparing for our future. I also like watching shares go from under $6 to closing yesterday at $10.22 (thanks ELY).

Do you invest? Are you planning for your retirement?

100% tech in '99, margined myself to the hilt and bought after the first correction - finally got out with 10% of my cash. Was back to original basis in 2008 when the crash came; I lost 50% and had the rest on the sidelines while the market roared back. Got whipsawed in the AZ house and pissed away my last $100K traveling and drinking for a year. Now at 50, I'm starting from < zero.

As long as I can golf once per week, life is grand

 

[T0AD]

So, anyone that knows anything about all this stuff believe the hype of a crash this year?

 

[JB]

So, anyone that knows anything about all this stuff believe the hype of a crash this year?

I am scared of it.
I think that we will pull some out very soon because of it.

 

[T0AD]

Which brings me to question #2

I'm in a 401k. It's pretty modest but I'd hate to lose a dime.
Wondering where to sock it away to let it ride the storm in safety.
For having a business degree, I really don't get the damn markets that much. But, I guess that's why we have Finance majors.

 

[JB]

Which brings me to question #2

I'm in a 401k. It's pretty modest but I'd hate to lose a dime of it.
Wondering where to sock it away to let it ride the storm in safety.
For having a business degree, I really don't get the damn markets that much. But, I guess that's what Finance folks are for.

Yeah, you are going to want to do something safe if you want to not lose anything. Find something as secure as possible and run with it.

 

[Wilson Staffer]

Haven't lost money on my 401k options since 03'. Might even be able to retire at 70. Lol

 

[Wilson Staffer]

bout 30% of our company is out of a union shop and they're getting screwed a little lately from what I hear.

 

[mpeterson]

Which brings me to question #2

I'm in a 401k. It's pretty modest but I'd hate to lose a dime.
Wondering where to sock it away to let it ride the storm in safety.
For having a business degree, I really don't get the damn markets that much. But, I guess that's why we have Finance majors.

I know we have the option to put our retirement into non-stock funds (defaults to a money market if you sign up without choosing allocations). I would imagine you have similar options - after all, people will move to those shortly before retirement so that they are protected from huge losses. Who is your account with? We have Fidelity and TIAA-CREF who have always been good answering any questions I have had on the phone.

 

[golfinFF]

So, anyone that knows anything about all this stuff believe the hype of a crash this year?

I am scared of it.
I think that we will pull some out very soon because of it.

If this is the case then I need to move some funds into our safe fund option in order to be able to buy a bunch of what ever fund(s) drop.

 

[Speedliner]

So, anyone that knows anything about all this stuff believe the hype of a crash this year?

Seems more likely to be a concern for 2017. Energy is too cheap, rates still low.

Having said that, have your STOP orders in and maintained. Then you can't get hurt too much in a crash. Pick the number your happy retaining and set the STOP at that value. If stock goes up, adjust your STOP up.

 

[T0AD]

I know we have the option to put our retirement into non-stock funds (defaults to a money market if you sign up without choosing allocations). I would imagine you have similar options - after all, people will move to those shortly before retirement so that they are protected from huge losses. Who is your account with? We have Fidelity and TIAA-CREF who have always been good answering any questions I have had on the phone.

John Hancock

 

[mpeterson]

John Hancock

I'd give them a call and see f they have any planning services. You could ask what they suggest if you wanted to go more conservative.

 

[TheHeez]

John Hancock

Likely your plan offers a money market option as well as a few different short-intermediate term bond options. Hedging your bets is a good idea, but be careful putting too much in cash and be prepared to pull the trigger to get back in the equity markets. If we have a correction make sure you don't wait too long to get back in, participating in a recovery can be very profitable.