[Excalibur]

If I do really well, I can possibly retire in 3 years. I calculated with a 9% return on my net worth for 3 years in a row, I will have the option to retire. I don't plan to, but it would be nice to take time off whenever I want.

Given the market is at an all time high, and almost everyone is predicting a correction, how do I invest in this environment.

5 years ago, this stupid financial advisor my friend recommended to me actually told me to sell my Index Fund and short the market because the market is at an all time high. I lost $10,000 with this clown. Good thing I stuck with my plan and continued to put my IRA money into the S&P500 and was able to more or less ride the bull market wave. Last year I put more after tax money into the S&P500, and so far have made further gains.

So now is the million dollar question? What to invest now?

Yes, I will hold cash. So the money I invest will be a fraction of my current cash reserve and the money I further make from work. I will not be 100% invested when the market take a violent down turn. My cash will be in 1.85% savings account and 2.5% CD. I still want to buy a house so this can be used for down payment also.

I am not gonna talk about rental property here even though its an option. I was gonna buy a multiunit property but backed out.


The problem is no one really know when the market will correct. The bull run might go another 3-5 years.

I am thinking of doing an experiment.

Dollar cost average over the next 3 years into

- QQQ - tech EFT that had far outperform the market
- VYM - high yield dividend ETF. Supposedly high dividend ETF do relatively better in a bear market due to the dividend while everyone's stock value gets crushed.
- S&P 500
- Amazon??? - PE ration of 150:1. Scary. Even though it might still continue to grow more than 10% annually.
- Tax free muni bond? Not that excited about it.
- Realestate crowd funding? Seem kind of risky in this market.

Any other ideas, suggestions?

I may still lose my shirt, but by dollar cost average the risk should not be that high. I'll also drop in a lump sum if the market correct by more than 10%.

If the market continue to rise, I can further benefit from this run, and possibly get close to my goal of 9% annual return.

[Cattle Rustler]

ETH, VenChain, and BAT.

[BigPoppaPump]

Bitcoin or perhaps Gold.

[signoria]

Wait for the big DXY rally which could drag down EURUSD to the levels of 0,98 and when USD gets flat, invest in GOLD.

Most EM FX and stock market prices are pretty undervalued. If you think the EM problem will be solved in a year, you can find Turkish bank stocks trading at less than half book value, with 4-5 years dollar bonds yielding %20 plus.

[Faust]

Gold's been a shitty investment for years. Why will it cease to be shit, and how will it cease to be shit in a way that couldn't be better captured by say, puts on the stock market?

[ChicagoFire]

If you think America is fine for the next couple decades real estate. If you can't afford real estate then there's platforms that allow you to buy shares. Look up FinancialSamurai as you need to do your own research. Obviously crypto and I keep hearing from people that Bitcoin is too expensive and all I can say is it's undervalued. Buy at periodic paces. General rule of thumb spread your resources around so if crypto does go bust you won't suffer massive losses.

When the stock market crashes buy up. President Trump takes way too much credit for the stock market and he's walking into a trap. I can see the headlines, "Trump takes credit for the stock market, drops 1000% Thanks President!" My investing policy is periodically invest, spread, live below my means, and play for the long run. I definitely didn't sell when Bitcoin dropped a couple weeks ago.

Also everybody's risk tolerance will vary. I have some money in peer to peer lending but at about 5% returns that's a waste of money. Once people pay off their debt to me I wouldn't put any more money in that category. I speak for myself when I play for the long run. An underrated topic is fun experiences. When you're an old man on your death bed hopefully you can remember some fun you had. That doesn't mean party everyday but I personally try to do something fun once a month since I work so hard everyday. You're essentially hedging against losing everything in some black swan event.

[MrTickle]

I think the bull run is linked to interest rates. If interest rates get north of 3% and inflation is below 2% then people will start to move some investments into safer cash savings.

Where is your money now?

If it is in passive funds then you shouldn't need to do anything with them. If there is a crash in next few years you just put your plans back by 18 months to 2 years.

The worse case scenario is you "retire" and the market crashes in the first 1 or 2 years of retirement as this could seriously damage your pot long term.

It would be dam tempting to invest in crypo in 2019.

[semibaron]

Amazon shares. It will easily double over the next 5 years. Amazon also spends the most on R&D.
https://www.strategyand.pwc.com/innovation1000

[BlastbeatCasanova]

Tattoo removal: a lot of these hoes and dorks who got "sick tats" will probably want to get them removed as they grow older and (as I predict) the pendulum swings back to having ink free skin is the new "trend."

hearing restoration: I think this could be a big thing the future. With smart phones came an unprecedented level of people blasting their ears with small speakers for several hours a day. Also my generation seems to love going to music festivals with insanely loud music. Seems like there could be a big market for procedures, etc. involved eith restoring hearing as the technology gets better.

I'm sure you wanted an answer like gold or real estate but I was trying to think outside of the box for ya

[tonired2]

Lithium / lithium miners
My personal preference and 25% of my portfolio GXY (big exception to me, usually limit myself to 10%), just doubled my position yesterday
I might buy into PLS tonite

Thank my later

Edit :
Today GXY 2.49aud
PLS 0.77aud

It may fluctuate up and down in the short time, but let's come back here in a year or two (hoping 3 to 6 months to be enough)

[Richard]

Thank you very much for the useful information. I will definitely use it

[ksbms]

Nobody nows really and I'd be supercautious against all "experts" of any shade (with the exception of Buffett perhaps but neither he is an omniscient oracle) - if you look around you'll find plenty research showing that a bunch of monkey (yes, REAL monkeys), randomly composing a reasonably diversified portfolio, will outperform the "experts" recommendations.

I plan to put my money into some Nasdaq 100 & Composite ETFs, mixed up with some more conventional shares, I think. Why? We are living in an increasingly more technologically driven world and software and semiconductors of various kind will be in every single device you can imagine (including animals & humans - one day, far away).

I think Amazon is good bet, they still have new markets to expand to and Bezos keeps diversifying operations as the encroachment into food sector showed, and a possibility to enter health sector. Also, it' cloud computing - Amazon Web Services - sector brings sizeable revenue and more and more processing and storing power will be needed and used and AWS is and will provide that in spades. The last one dovetails with Nvidia's GPU technology (CUDA) which is a core element of Amazon's servers for a variety of computation heavy AI and machine learning neural networks.

I'd "top up" buying separately more Apple, Amazon, Nvidia, (possibly Intel) and some hi-tech bio and pharma shares too. The key problem is what percentage should the whole portfolio constitute of tech, though - 25%, 50%, 75% or balls deep?

This is not an advice and you're responsible for your own research, I bear no responsibility for the outcome of your financial choices.

[Irish]

Why would you come to RooshVForum to ask for investment advice?

Do you go to Schroders and ask them where's the best country to go to pickup chicks?

[Excalibur]

Tattoo removal and hearing enhancement are actually not bad advices. I thought about getting into tattoo removal myself couple of years ago. Right now I don't see how to invest in it passively.

Crypto currency is too much of an unknown for me. I think some crypto ETFs are in the works. If there's a crypto ETF I might get a position in it.

I've already invested in Realtyshares, the crowdfunding real estate investment platform. It's OK. It's like peer to peer lending. Seems good in the beginning, but peters out. I might look into hard money loans with a 1st lien on the house. If the economy goes south, the borrower defaults, at least I get the house.

Amazon and tech. It's definitely a gamble. With such high PE ratio, do you guys imagine Jeff Bezo worth 300 billion dollars in 5 years? That is insane. I might just buy another share of Amazon just for the heck of it. I already have a small position. QQQ is a tech heavy ETF. I might just bet on it slowly through dollar cost average.


The question in hand is how to invest in a market that has an imminent possibly of a large correction.

I already have a position in real estate and stocks which I have no plans to sell in the next 5-20 years. My current cash is earning 2% in CD and high yield MM, and of course I'll be making more money in the next 3 years.

I think I'll allocate 50% of my investable cash and dollar cost average into several ETFs and index fund. Of the remaining 50%, half of that will be dumped in in several tranches as the market drop 5%, 10%, 12%, 15%. If the market does not correct in 3 years, I'll have caught some more of the bull run, but still end up rather cash heavy. With that cash in had I'll bite the bullet and buy a house despite it being so expensive.

Just for fun, I'll divide between tech QQQ, high dividend VYM, and tiny bit of Amazon and see which one comes out ahead.

[jbkunt2]

Wealthfront can be set up to auto pilot on dollar cost averaging. It’s pretty damn good and the fees are tiny at 0.35%...

[joost]

Everyone can say "invest in this, invest in that" but you're the one with skin in the game.

First rule is DIVERSIFY. Having cash is good if you can use it at the right time. During long term it'll lose value due to inflation.

[Laurifer]

Sounds like you're pretty risk adverse but consider a portion towards fledgling American pot companies or established Canadian ones. Federal legalization in the US is going to become a subject for 2020 I believe, and likely to see a weed stock boom like we have going here in Canada.

[rosario]

I would look into the permanent portfolio by Harry Browne. It will give you a solid hassle free base. Then speculate on whatever you wish knowing that you can lose the speculation without major harm.

[Excalibur]

Well 6 month later, there has been a lot of turbulence in the market. Let's see where we are.

My original post was dated 9/10/2018. At that time S&P was at 2877. Yesterday the S&P closed at 2800.

What I did in the last 6 months:

I started buying more S&P500 VFIAX as the market dropped and also dollar cost averaged monthly investment.
It's interesting back than I thought I would jump in and buy it all at the bottom. In reality, when the market dropped really hard I actually didn't buy that much. I thought it would drop even more, but then it took a turn upwards. I actually invest the biggest chunk when the market only dropped like 5-6%. All in all I did OK. This was my biggest investment allocation. Now that the market has recovered somewhat, I made a 6.9% return on the various tranches of money I put in during the last 6 month. This is not including dividend return.

Amazon did not go so well. Psychologically I has FOMO. I thought I might miss the ride so when it dropped to 1900s I bought a bit. Terrible mistake. My cost basis was 1938. Giving me a 10% loss so far. Just to comfort myself. I did have some Amazon at 974 a share so on average I am still up.

I invested some in VYM - vanguard high dividend ETF. Have a 6.3% return not including dividend.

Lessons learned:

I knew I shouldn't invest in individual stocks but I couldn't help it. Even a blue chip like Amazon is still unpredictable. 6 months ago we all thought Amazon was going to grow 20% a year. Well, during that time Jeff Bezo started divorcing his wife, the stock market took a dive, and Amazon backed out of NYC for HQ2. For me it is just not worth the time and energy to invest in individual stocks. It is just too unpredictable.

I still got nervous when the market took a very sharp dive. It's very difficult to have the discipline to invest when you are most afraid. I had a pre-planned investment tranches that forced me to invest as the market dropped without having too much second thoughts. But in the end I still chickened out when the market was at it's lowest. I'll have to dig deep and search for that emotion as the market tanked and remember in the future when I feel that way, that is when I should make the move.

All in all I did ok, but this journey is far from over. Who knows that the market will do in the next 6 months, 3 years etc.

[swoosh]

Invest for the next 3 years? sounds like get rich quick in three years. Very slim shot. Really, the best way to get rich is through years and years of growth through compound interested and smart investing. If you want to do high risk investments in the meantime and go with stock picking, you can always buy proven companies who face hard times. think southwest, volkswagon emissions scandal, Bp during the oil spill ect. With that said Boeing is down 10% right now and it might get worse over the next few weeks as the investigation unfolds. You'll need to risk somewhere between $70-150k on that stock to make any real money within three years however, but if you invest little amounts companies like this during their hard times, over 30 years you'll have a nice chunk of cash waiting for you. Thats just one strategy. Im not just saying this to sound cool. My portfolio is up 45% in the last 3 years.

[qwertyuiop]

9% a year is definitly doable. I read the above posts and don’t think anyone above consistently beats the market.

Right now the play is high growth enterprise software firms. I know this because i work in tech.

They run at a loss to grow 20-60% YoY. Most customers are losses the first years due to high paid sales/marketing/etc but are 80% margins year 2 and beyond with a churn rate under 10%.

$AYX, $ZS, $TEAM, $NOW and companies like them.

[Deepdiver]

Ed Bugos March 2019 Newsletter with Reccs:

This is behind a Paywall and I cut down about 20 pages of detailed background info and only included the salient highlights.

TA / US share markets SPX and NDX

Using the Dow Industrials as a proxy we see that the primary bull market trend (i.e., the post 2016 leg) is in
question now that the late last year smackdown took the average, and all the other major averages, below
their last highest primary lows - the ones made in the first quarter of 2018. In the DJIA that level was 23k.
While the longer term 10-year bull market sequence is still in play above the 15.4k (2015-16 low), the break
below last year’s (February) low ended the post-2016 bull leg, which as I mentioned above, was kickstarted by
a pre-Trump liquidity pump in the last half of 2016. It is notable that the long term trend line on the log graph
above approximates the 200-week moving average (i.e., blue line = red line). That probably increases the
significance of the December low at 21.7k as that low seemed to have found support near this area.

As a result, I would suggest that overall bull market support lies between there and the 2015 low, i.e., between
15.3k and 21.7k. At the moment the only thing I can say with confidence, chart wise, is that the three-year
primary leg has ended, and the primary trend is now neutral. Confirmation that we have had a bonafide trend
reversal would at a minimum require a lower low below 21.7k, taking us below the blue line to potentially
confirm a new bearish trend (unlike the situation in 2016 where lower lows never followed).

I’m not sure if we’ll fall all the way to 15k. My bear market outlook is for a 2-3 year downturn that maxes out
at that level, maybe down to 12k at most. I can’t be much more bearish than that because I am looking for a
hyperinflationary response from the Fed on the way down. It could be noted that in the case of the S&P 500
we have touched the 200-week moving average the same as in 2011 and 2016, and that strictly looking at TA,
there’s no reason why the correction couldn’t be over now. However, in our confirmation above, a lower low
in the S&P 500 index (below) would end up piercing the 200-week moving average.

Recommendations:

Ed's March 2019 New Option Strategies
>> Buy to open June 21 (2019) SPY 120 Put at 1-2 cents
>> Buy to open June 21 (2019) QQQ 160 Put at $1.10 or better
>> Buy to open June 21 (2019) FXY 90 Call at $0.25 or better
>> Buy to open June 21 (2019) JNJ 120 Put at $1.00 or better
>> Buy to open June 21 (2019) NKE 65 Put at $0.20 or better
>> Buy to open June 21 (2019) WMT 80 Put at $0.25 or better

Ed tried to time these strategies for as close as possible to when I think the next downturn will begin for US
share markets AND for the US dollar.

In December when we covered most of our last shorts I predicted the stock market would bounce on the collapse in oil prices and sentiment shifts. I was waiting for mid-March as that was the time around which we’d expect the blackout period for share buybacks to start in the tech and
banking sectors where they have been most dominant. I would like to wait out the trade deal and Brexit but
the Fed gave us a good pop in the market, and this is a rally I’m all too happy to sell into.

Our short portfolio still holds swing trading short positions in the shares of the Proshares Ultrashort
QQQ ETF (QID), Microsoft (MSFT), Tesla (TSLA), and GOOG - the latter three were entered in
September - but the options strategies have all been liquidated, mostly at a profit, except for Microsoft puts.

The SPY put is a hail mary far out of the money option strategy that has huge potential upside if there is a
crash or spike in downside volatility all of a sudden, like a black swan type event. I haven’t put out one of
these for a long time but someone reminded me of it, and it seems like a good time for a bet like that.

But keep in mind it is a very high-risk long shot bet, chances are you will lose 100% of that capital.

The $160 puts on the QQQ are more reasonable as they only require a 10-15% decline in the NASDAQ 100 by
June 21st in order to make money for us. We might only make 10 times our money instead of 100, but the
chances are better as there are more possible scenarios that can produce a positive return.

I like shorting JNJ, NKE, and WMT here for a myriad of reasons, but essentially they have had terrible
records of earnings growth over recent years, especially relative to their share multiples, they are very
expensive Dow components, and their charts look weak. In Johnson & Johnson’s (JNJ) case there are issues
related to asbestos in some of their products that aren’t going away. We are adding Walmart as a short
against the US consumer. And Nike seems like it is way overpriced and the market has priced in a trade deal
with China. But I picked these from the Dow Industrials’ ecosphere as part of our macro bet.

[Australia Sucks]

Deepdiver it seems to be a strange choice to short industrial companies that at least have earnings when there are so many loss making tech companies selling at crazy revenue multiples.

[True Balla]

If you're considering your real estate options like the real estate crowdfunding, etc. feel free to PM me. I'm in private equity and we're one of the sponsors that typically list with those platforms - so if you want direct access feel free to hit me up. However, this is for 6 figure investments. If it's anything less than 100k it's prob better to stick with one of those platforms.

[Deepdiver]

(03-25-2019 05:39 PM)Australia Sucks Wrote:  

Deepdiver it seems to be a strange choice to short industrial companies that at least have earnings when there are so many loss making tech companies selling at crazy revenue multiples.

Ed Bugos has a huge newsletter following and key point is this is basically crash insurance as a large 08/09 correction but larger due to pending currency crisis with most highly indebted governments USA included is a serious risk. This focus on PUTs or inverse ETFs even surprised me a bit. So a good strategy is to stay in at least 50% cash and have plenty on hand when the Markets do go on sale.

The institutional guys will be shorting heavily when the markets retest their ATHs.