@rouge I am saying to avoid high transaction costs. Let's say for simplicity you have $500 a month to invest each month into the stock market.

I would tell you to buy every three months in lots of $1500. That means you buy 1495 worth of spy every 3 months ($5 fee) instead of paying $495 every month and spending $60 a year on transaction fees.

It adds up. If you buy in $500 lots... You're paying 1% to transaction costs per month! If you buy in lots of $1,500 or more you are paying only $5 on 1,500 or around 0.33%.

Make sense?

---

@wwt I agree entirely. Just gotta develop the BS detector and you can fish out the real from the fake.

Quote: (01-27-2014 02:56 PM)worldwidetraveler Wrote:  

Quote: (01-27-2014 02:37 PM)SpecialEd Wrote:  

The stock market is intricately tied to inflation...people wouldn't invest in it if their cash held it's value.

Imagine all of those companies not having access to cash in order to expand their business. Many would have died along with the jobs they supplied.

You do know about the bond market, right? You know...the capital raising market that is many times bigger than the stock market. In a low-inflation or particularly a deflationary environment, bonds are more appealing to investors hence companies can raise more cash.

Quote: (01-27-2014 03:19 PM)SpecialEd Wrote:  

Quote: (01-27-2014 02:56 PM)worldwidetraveler Wrote:  

Quote: (01-27-2014 02:37 PM)SpecialEd Wrote:  

The stock market is intricately tied to inflation...people wouldn't invest in it if their cash held it's value.

Imagine all of those companies not having access to cash in order to expand their business. Many would have died along with the jobs they supplied.

You do know about the bond market, right? You know...the capital raising market that is many times bigger than the stock market. In a low-inflation or particularly a deflationary environment, bonds are more appealing to investors hence companies can raise more cash.

Who is acting childish?

^By not responding to my post..you are by my reckoning. You made an absurd and inaccurate remark. I trampled over it with fact. And that is childish..how?

Again, I will extend to you the same courtesy as WC. Have the last word...

Quote: (01-27-2014 03:29 PM)SpecialEd Wrote:  

^By not responding to my post..you are by my reckoning. You made an absurd and inaccurate remark. I trampled over it with fact. And that is childish..how?

Again, I will extend to you the same courtesy as WC. Have the last word...

Why respond? You made a statement that companies can use bonds to bring in cash. Sure, duh!

Now, can you tell me there will be the same amount of cash available to businesses if they strictly relied on bonds and there was no incentives for people to invest in stocks?

I mean, you said it yourself, people have to invest into something otherwise their cash erodes in value. If there was no erosion, there would be no need to invest.

Now you're trying to tell me they would all invest in bonds and the same amount of cash available to businesses wouldn't change. Got a link to that fact? Besides the fact that the company owes that money back since it is debt.

^ you are worse than me! Smile and nod, smile and nod.

I am not sure if this thread has run its course. But - in case it hasn't - I have started a spearate thread, so that some of the side issues raised here don't derial this thread anymore.

I think WestCoast has put alot of effort into this thread trying to share his wisdom on investing. And it would be a shame for that to get buried by political bickering.

Let the bickering commence in this thread:

http://www.rooshvforum.network/thread-32507.html

Quote: (01-27-2014 01:55 PM)WestCoast Wrote:  

http://www.bls.gov/cpi/

Do the work yourself.

Anyone who references the government's CPI knows absolutely nothing about by state of the economy. The real inflation rates is three or four times higher than the official rate that the government feeds to the ignorant masses. An economist posts the real inflation rate at shadowstats.com, using the official formula used by the U.S. government before 1980 (before the government began lying to the people about even things as basic as inflation).

http://www.shadowstats.com/alternate_dat...ion-charts

The inflation figures here in the UK are fucked up. Just read a book which had a good chapter explaining all the problems with how they measure it.

http://www.amazon.co.uk/Inflation-Tax-Pl...B00DOHZ1IM

RPI is far from being a perfect measure. But it is better than CPI (which leaves out the costs of rents, mortgage repayments and council tax). But the government uses CPI now since the EU wants all of Europe to use the same inflation measurement. Indeed CPI was only intorduced in the first place as a way of comparing countries to see if they were eligible to join The Euro.

That is one of the main problems - but there are other big problems associated with the measurement of inflation as well.

Quote: (01-27-2014 02:52 PM)RougeNoir Wrote:  

what is an ETF that behaves like the S&P500 other than SPY?

I would look at the Rydex S&P Equal Weight ETF (ticker RSP). It has outperformed SPY since it started in 2003.

RSP contains the same 500 stocks as the S&P 500 index, but instead of weighting the holdings by their market capitalization, it weights each holding equally.

Quote: (01-27-2014 08:27 AM)WestCoast Wrote:  

Look up the CPI in the usa in the 80s in the USA what happened? Rampant Growth

Inflation means money is flowing into the economy, deflation means people are no longer investing in the economy.

Look over the last 100 years in major economies, look at the inflation rate, tell me if you don't see a trend.

Yes, the trend is very clear -- and quite contrary to your assertion that inflation is good.

From 1973 until 1983, a ten-year period of stagflation (high unemployment and high inflation) and awful stock market growth, the average inflation rate was 8.75%.

From 1983 until 1999, an unprecedented era of growth, the average inflation rate was 3.3%. (Bear in mind that the methodology for calculating inflation changed in 1980 and again in 1990, so the figure is somewhat higher than 3.3% but still well below 8.75%).

So, your own hypothesis blows up, if you bother to review history and the actual hard numbers.

http://www.usinflationcalculator.com/inf...ion-rates/


The bigger picture: the U.S. is presently suffering from stagflation (high inflation of nearly 10% and high unemployment) worse than the 1980's.

1. Why does no one know that the U.S. is presently suffering from stagflation? Because of false data supplied by the USG (see shadowstats.com) and the media's overriding goal to protect "The Holy One."

2. Why are the equity markets thriving despite what happened in the 1980's? The artificially low interest rates created by the Fed.

No. You just plugged into a nonsense calculator instead of looking up every single month. The late 30's were negative. I have even went through your same links lol!

http://www.usinflationcalculator.com/inf...ion-rates/

But anyway you can rebuttal on the other thread but you're citing bad data. I don't really care tho.

You are helping my points. You know inflation is being caused by the low rates and yet why is your money not in equities then? Lol it makes no sense. If you know it is low then why are you risk off?

The problem is you're just complaining and have no solution to combat the issue. I am offering a solution. Dollar cost into assets.

TL;DR lets say you're right what am I gonna do about it to make money? You've offered nothing but arm chair theory with no action. Even if there is stagflation don't you at least own assets to avoid getting inflation raped.
---
Again if you're reading this thread please for the love of god look up dollar cost averaging.

Quote: (01-27-2014 06:13 PM)Tail Gunner Wrote:  

Yes, the trend is very clear -- and quite contrary to your assertion that inflation is good.

From 1973 until 1983, a ten-year period of stagflation (high unemployment and high inflation) and awful stock market growth, the average inflation rate was 8.75%.

From 1983 until 1999, an unprecedented era of growth, the average inflation rate was 3.3%. (Bear in mind that the methodology for calculating inflation changed in 1980 and again in 1990, so the figure is somewhat higher than 3.3% but still well below 8.75%).

So, your own hypothesis blows up, if you bother to review history and the actual hard numbers.

http://www.usinflationcalculator.com/inf...ion-rates/


The bigger picture: the U.S. is presently suffering from stagflation (high inflation of nearly 10% and high unemployment) worse than the 1980's.

1. Why does no one know that the U.S. is presently suffering from stagflation? Because of false data supplied by the USG (see shadowstats.com) and the media's overriding goal to protect "The Holy One."

2. Why are the equity markets thriving despite what happened in the 1980's? The artificially low interest rates created by the Fed.

^This. Inflating the money supply to force economic growth has been in the central banker's playbook since the Roman Republic. It doesn't work. Short term, it will lead to GDP growth but in real terms the economy is just treading water. The long term effects though are devastating. The fact that we are still having this debate in the 21st century amazes me...

Quote: (01-27-2014 06:58 PM)WestCoast Wrote:  

No. You just plugged into a nonsense calculator instead of looking up every single month. The late 30's were negative. I have even went through your same links lol!

http://www.usinflationcalculator.com/inf...ion-rates/

But anyway you can rebuttal on the other thread but you're citing bad data. I don't really care tho.

I am not citing bad data. I simply added the years that I cited and then divided by the number of years. The data clearly shows that inflation was high during the poor economic bust of the 1970s and inflation was low during the boom times of 1983 through 1999.

The 1930's? Thanks for pointing that out. I had forgotten that after the market crash, the equity markets exploded throughout the deflationary period of the 1930s, when the inflation rates for some years were negative. The Dow Jones Industrial Average more than quadrupled from 1932 to 1938.

BTW: Please point to any post where I advised people not to buy equities (although I would wait until the next long-overdue correction occurs). I am simply trying to explain fundamental economics. Equities will eventually explode higher for the same reason that they did in the 1930s. When the European economy implodes during the next financial crisis, European capital will flock to the USD, U.S. equities, and commodities.

That's fine man I still disagree but for fun I will say that you are 100% right then all inflation is bad in that case to make my point again...

What do I do with my money? You said equities are over valued... You said we are in stagflation sooooo... Clearly you've given me no investment options. You can't escape stagflation in a checking account my man. You have say 5-20 thousand dollars hitting your account each month are you going to put that in a checking account? No.

This is the problem. If you actually are making a lot of money constantly you're not sticking it into a CD. You have to fight off stagflation or whatever you feel like calling our current environment. You're suggesting to time the market, if so god speed with that one.

Where is the tangible advice? For someone clearing over $10K a month to invest? Bonds with shitty yields? Converts? Preferreds?

Close your eyes and do what I suggest and you'll likely be rich in 30 years. Classic theory with no action is not useful to anyone.

Quote: (01-27-2014 07:35 PM)WestCoast Wrote:  

That's fine man I still disagree but for fun I will say that you are 100% right then all inflation is bad in that case to make my point again...

What do I do with my money? You said equities are over valued... You said we are in stagflation sooooo... Clearly you've given me no investment options. You can't escape stagflation in a checking account my man. You have say 5-20 thousand dollars hitting your account each month are you going to put that in a checking account? No.

This is the problem. If you actually are making a lot of money constantly you're not sticking it into a CD. You have to fight off stagflation or whatever you feel like calling our current environment. You're suggesting to time the market, if so god speed with that one.

Please point me to any post where I said that equities are over valued. The most that I said was that will be a serious short-term correction this year (likely in the next few months). Anyone who watches the historical charts knows that we are well overdue.

Any prudent portfolio will be diversified amongst equities, cash, commodities (including precious metals), and productive agricultural land (if you have enough capital).

Any prudent portfolio will be diversified not only in the U.S., but also in other nations without heavy government intervention in the markets. IMO, anyone who leaves all their assets in the crony-capitalist U.S. and Western European markets is a sucker.

If anyone is expecting a serious financial crisis, I have written about that in the thread "Investing in an Anti-Fragile Way" based on the recent book by Nassim Taleb.

http://www.rooshvforum.network/thread-30375-...#pid587295

I have no problem with DCA for novice investors. On the other hand, the best traders actually trade very little, because they make large gains on the few low-risk high-gain trades that they learn to identify through experience. Of course, you will actually need to learn real economics to succeed.

Thank you for not answering my question.

If you are making 5-20 thousand dollars a month net that you can invest what are you buying that is better than DCA for your average investor.

You're just trolling me.

Also you stated 2 posts above "you're waiting for a correction" which implies you would not be buying equities... So what would you be buying, get it?

Quote:Quote:

(although I would wait until the next long-overdue correction occurs).

Quote: (01-27-2014 08:07 PM)WestCoast Wrote:  

Thank you for not answering my question.

If you are making 5-20 thousand dollars a month net what are you buying that is better than DCA for your average investor.

You're just trolling me.

Also you stated 2 posts above "you're waiting for a correction" whic implies you would not be buying equities... So what would you be buying, get it?

If anyone is trolling anyone, it is you. I supply web links to back up my assertions.

In my last post, I stated that I have no issue with DCA for novice investors. There are many forum members reading this thread who are new to investing, so I do not want to lead them astray. So, I noted that we are overdo for a significant correction in the equity markets. So, the rather obvious answer is to wait until after the correction occurs before investing in equities. Do I really need to spell that out?

You must be familiar with the rule that a 50% loss requires a subsequent 100% gain to break even.

^^ then you don't understand what DCA means. It means I continue buying though the dips, throughs the ups as well. This is also highlighted by your embarrassing post above where you state that people should wait until "after the correction" which assumes that you personally can time the market. Do not make me laugh. You are essentially saying there is no chance that there won't be a correction, see implied omnipotence regarding market timing and misunderstanding of DCA.

I can also tell based on your posts you are definitely not a serious investor. I would also wager that you own zero international land and yet are advising people to buy gold and foreign farm land on your anti fragile post.

Maybe I am wrong but I severely doubt it based on your negative tone and constant complaints about the economy. You can fool average people but you're not going to fool me.

The fact that you don't see that DCA moves through up turns as well is pretty comical to me.

@TG

The info you supplied might be useful for someone who has traded for a while and are making good gains. Understand that a lot of newbie investors here will simply take ZERO action even after reading this whole thread. Such is human nature when it comes to loss aversion.

Not DCA-ing on the way up is poor practice of discipline, but starting at where we are right now will be painful for newbies eventually when the market does a correction no doubt. But when it does they will still dilly dally and say the market is not at the bottom yet / the market has picked up, so I have to wait for another correction.

In essence I think WestCoast is trying to simplify that information and make it actionable for the newbies to learn and start at the same time. I know it sucks to lose believe me. It hurts more when youre losing and see your mates WINNING few times over on their investments.

Perhaps those who haven't start on DCA can try initiating 50% of their initial intended position rather than 100%. Say if you intended to DCA $5000 into SPY every 3 months, do $2500 every 3 months instead and leave the rest of the $2500 in a lower interest, cash yielding account. Then Learn more about investing so you feel comfortable timing the markets, and when you do feel the market has bottomed out on your analysis, you still have the spare cash on hand to add into your position or other positions. In the long run, you will become a more savvy investor and have the portfolio to show for it.

In terms of inflation, WC I feel you're a little harsh in explaining. I think the finance industry is pretty well insulated from it because of the earnings. But for consumers, inflation really sucks especially when they do not have assets in their portfolio. We are all consumers in the economy whether we like it or not, and using the same peanut analogy, the manufacturer might not enjoy the benefits of inflation if the inflation was in the price of energy (increased transport costs for him), so even by increasing his price, he might still be making the same as before.

TL,DR: Learn to DCA on index, cultivate discipline, own ASSETs. That's what the middle class don't do. They get emotional.

Quote: (01-27-2014 08:20 PM)Tail Gunner Wrote:  

Quote: (01-27-2014 08:07 PM)WestCoast Wrote:  

Thank you for not answering my question.

If you are making 5-20 thousand dollars a month net what are you buying that is better than DCA for your average investor.

You're just trolling me.

Also you stated 2 posts above "you're waiting for a correction" whic implies you would not be buying equities... So what would you be buying, get it?

If anyone is trolling anyone, it is you. I supply web links to back up my assertions.

In my last post, I stated that I have no issue with DCA for novice investors. There are many forum members reading this thread who are new to investing, so I do not want to lead them astray. So, I noted that we are overdo for a significant correction in the equity markets. So, the rather obvious answer is to wait until after the correction occurs before investing in equities. Do I really need to spell that out?

You must be familiar with the rule that a 50% loss requires a subsequent 100% gain to break even.

^ the whole point of DCA is to AVOID market timing. That's a more important piece of DCA to me than the average cost of the security. "Belief" in where the market will go is simply another emotion which DCA gets rid of.

I already stated there is no value in discussing inflation. I am going to get 1/3 of people thinking I am a retard (special Ed and tail gunner) 1/3 confused/interested (Cardguy) and 1/3 who see my point (likely people like WWT). So I am not going to bother with that one it's a zero sum game. I try to stick to shit people can read and simply do and get results, me e-chit chatting about inflation doesn't help anyone.

I have spent far too much time trying to explain the basics at this point and this thread is going down the shitter. Oh well.

Quote: (01-27-2014 08:44 PM)WestCoast Wrote:  

You are essentially saying there is no chance that there won't be a correction, see implied omnipotence regarding market timing and misunderstanding of DCA.

Uh . . . yes. It has nothing to do with omnipotence, although it may seem that way to someone who thinks like you. How do I know? I can read.
I can absorb knowledge. I can think. I can reason.

There is zero chance that there will be no correction -- and sometime rather soon. And the more overdue the correction, the more savage the resulting decline in the market.

From an article from two months ago: "Investors brace for big dip in stocks." So, now almost 28 months and counting. This is not rocket science.

Quote:Quote:

It's been 26 months since the S&P 500 slipped into a "correction," defined as a decline of 10% or more from a recent high, according to Sam Stovall, chief equity strategist at S&P Capital IQ.

On average, the index has gone through a correction every 18 months since 1945, Stovall wrote in a report this week.

http://money.cnn.com/2013/12/05/investin...orrection/

Quote: (01-27-2014 11:34 PM)Tail Gunner Wrote:  

Quote: (01-27-2014 08:44 PM)WestCoast Wrote:  

You are essentially saying there is no chance that there won't be a correction, see implied omnipotence regarding market timing and misunderstanding of DCA.

Uh . . . yes. It has nothing to do with omnipotence, although it may seem that way to someone who thinks like you. How do I know? I can read.
I can absorb knowledge. I can think. I can reason.

There is zero chance that there will be no correction -- and sometime rather soon. And the more overdue the correction, the more savage the decline.

From an article from two months ago. So now almost 28 months and counting.

Quote:Quote:

It's been 26 months since the S&P 500 slipped into a "correction," defined as a decline of 10% or more from a recent high, according to Sam Stovall, chief equity strategist at S&P Capital IQ.

On average, the index has gone through a correction every 18 months since 1945, Stovall wrote in a report this week.

http://money.cnn.com/2013/12/05/investin...orrection/

This says all I need to know about you. In bold and underlined there is zero chance there won't be a correction in the near term. Dear oracle how short is the near term so I can have this in writing?

Now all the intelligent people reading this thread will see what my point is even if there is a correction you believe in market timing and you personally are not a multi billionaire soooooo yeah not gonna trust anything you have to say about investing. Lets get that prediction up in here doom and gloom

I wish everyone had to paste their net worth on every single post regarding investing that way we could watch it fluctuate over time as well, what a fun game that would be for this place wouldn't it.

In bold and underline you are literally playing god saying you can predict the market. Now we can get the exact correction date... LOL

Quote: (01-27-2014 11:36 PM)WestCoast Wrote:  

Quote: (01-27-2014 11:34 PM)Tail Gunner Wrote:  

Quote: (01-27-2014 08:44 PM)WestCoast Wrote:  

You are essentially saying there is no chance that there won't be a correction, see implied omnipotence regarding market timing and misunderstanding of DCA.

Uh . . . yes. It has nothing to do with omnipotence, although it may seem that way to someone who thinks like you. How do I know? I can read.
I can absorb knowledge. I can think. I can reason.

There is zero chance that there will be no correction -- and sometime rather soon. And the more overdue the correction, the more savage the decline.

From an article from two months ago. So now almost 28 months and counting.

Quote:Quote:

It's been 26 months since the S&P 500 slipped into a "correction," defined as a decline of 10% or more from a recent high, according to Sam Stovall, chief equity strategist at S&P Capital IQ.

On average, the index has gone through a correction every 18 months since 1945, Stovall wrote in a report this week.

http://money.cnn.com/2013/12/05/investin...orrection/

Now all the intelligent people reading this thread will see what my point is even if there is a correction you believe in market timing

It is almost as if you cannot comprehend the English language. Say that a correction is inevitable has nothing to do with timing the market.

I think that "all the intelligent people reading this thread" will understand that point, even if you do not.

You said "sometime rather soon" you are either fear mongering like most of your posts or saying you expect a near term correction.

There is ALWAYS market corrections. And you specifically stated in your posts above to "wait" to buy. So tell me oracle when do I buy?

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Also enjoy that I am dead right that you own zero international farm land and yet give that advice out on the anti fragile thread. You're as keyboard jockey as they come. No money, no experience, no respect from me.