Too Hot Investment Thread

When it's time to buy, you won't want to.

 

I have a dividends question & I'm sure the answer is in front of me but.... ok so I have pending dividends already. Not huge but using all this to learn concepts. If I let them sit in my Robinhood as cash, that's profit, which is taxable, correct? But if I do a DRIP do I still owe taxes on the dividends or does it only come due when I actually have the cash?

Thanks folks!

 

Side note - I thought I'd gone overboard by grabbing such a wide variety of stocks & ETFs but I guess that worked because one half of my stuff feels like it's free falling today & the other part is steady or climbing.

How long do you guys hold on to stuff before selling? Have already had the "I sold & now it went up" situation. Read something by Buffett who said if you don't see yourself holding a stock for 10 years or more then don't hold it for 10 minutes. Is that good advice?

 

I would advise to never buy anything that you aren't willing to hold for at least 10 years. And I'd also advise sticking to broad exposure, passively managed index funds or ETFs (things like S&P 500 or even Total US Stocks).

The tough fact to wrap your head around is that individual stocks and companies might fail, but the U.S. stock market always goes up; it's just a very bumpy ride. The only way you lose money in the stock market on a long horizon (15 years or more) is by dancing in and out of it.

 

Dividends are taxable whether or not you reinvest through a DRIP.

Robinhood will give you a 1099-DIV every tax season that shows your dividend income.

 

it’s a bad/good year for those too. I had one small cap value fund, which shouldn’t even have that much for dividends, and the divs were $1100 against a fund value of only $5500 or so. So 20 percent, and that one small fund means $300 or so in taxes. Within about five minutes of reading that I sold it, upped my small cap in one of my retirement accounts, and bought a target date fund with the money.

 

This is a fair point. In an IRA account, I'm sitting on a cash balance a little over $100k from a stock sales about a year ago. It's a modest amount of my overall portfolio, but by any reasonable measure still a ton of cash. So why did I leave it sitting? Well, the S&P seemed a little expensive for buying a big chunk at once, so I figured I'd wait and see. So today, after a bad week, do I want to put it back in the market? I'm actually considering it. But here's the funny thing. Even after the recent decline, the S&P is still higher than it was a year ago. As the saying goes, time in the market beats timing the market.

 

Thank you. Again I'm completely small potatoes since I'm just using this to learn but I'll keep an eye on that. Though it's not paying til THIS year so guessing it would be for next year's taxes.

 

Think I have heard the phrase 'bear market' more often today on tv than I did during the entire 2008 collapse.

That is the most positive thing I've heard recently.

 

I think I crossed the 6 figure loss threshold in this downturn today.

Woohoo!

 

Wait til tomorrow!

 

Means lots of stuff on sale

 

Be greedy when others are fearful

 

Woohoo I'm getting my first dividends, totalling...12 cents yay me!!

Bright side I followed advice & didn't panic sell & most of my stocks that went belly up are nearly back to normal. I did follow that Buffett advice & trimmed out stocks that I wasn't interested in or didn't know enough about the company/didn't see myself holding long term.

Some of your dollar amounts...holy smokes I'd be puking in a bucket with those amounts but again I'm small potatoes LOL

 

One rule I had to learn as well, don't obsess over the daily fluctuations. I look at my account maybe 1 time a week. Used to be hourly when I started and would freak out when the price would go down. If your in it for the long term just let it be and don't obsess

 

I only look at my work 401k quarterly. Since I'm using this for learning I look at it way more often so I can read articles, learn the terminology, see the graphs & learn what they mean, etc. I will say I've looked at it less & less, though. Eventually I'll get there I started from zero knowledge so it may take a while LOL

 

I still look most days, and even when I don’t I know more or else how I did based on the overall market (which I always end up seeing some way). But I don’t move anything around other than for long term ratio adjustments. And generally those are in one direction over the last few years, away from growth towards value, and away from stocks towards bonds as part of the move towards a retirement looking portfolio. I had been 90/10 until about 3 years ago, and now I’m closer to 75/25. That’s also a form of wealth preservation since I am doing ok against my goals.
I did move about 1 percent of my money into real estate this year, just as a small hedge against inflation and because bonds aren’t going to make much. But that’s a small change.

 

the losses are all relative. I mean for an extreme example, if you have 10 million and lose 10 percent you still have 9 million, even after losing a million right? And especially when you consider the remarkable run up of the last few years. Just giving back some of the gains.
I had a small sale of stock I had to account for in this year’s taxes, I sold it for $2750, and the cost basis was $607 I think. Against gains like that, a small downturn doesn’t mean much. Could still get worse though.

 

Hope you don’t get mashed

I hit the three week 6-figure loss too. On the bright side I had enough to be able to lose that. Not real sure that’s a bright side but I’m choosing to think so.

 

Fed meeting in a few minutes.

My guess is a 25 basis point rate increase - like Canada Just did. Any more and markets tumble.

I'm usually completely off on this stuff.