Best posts made by David Scubadiver

With the imminent demise of FatWallet.com, and the loss of the investment thread thereat, I thought I’d try restarting the investment thread here.

For those who are just starting out, I cannot recommend the bogleheads.org wiki enough. It provides an excellent education in why a simple three or four fund portfolio is the most efficient way to accumulate wealth. I do not know if I would have done better following such an approach, but I am perfectly comfortable migrating to it as I become older, wiser, and am substantially richer than I was.

Do what you are always reading about in the trashy financial magazines and websites. Max out on those 401(k) contributions if at all possible. Max out on your Roth IRA whether through “back door conversions” or direct contributions. And, if possible, take a portion of your take-home pay and invest it in a broad index such as SCHB or VTI, every paycheck. If you must buy individual stocks, I recommend checking out a good newsletter (I have always liked the Fool Advisor) so you at least have the benefit of someone’s deep thinking. If it meshes with your own, make the investment with a bit more confidence than you might otherwise have done.

My investments as of today total $2.7 million. About half of that is in retirement accounts. About $200,000 is in 529 accounts, and the rest are in non-sheltered accounts. I have sold calls on most of my apple position, so come the end of January I will be a lot lighter on tech, and a lot more diversified. Though, there is a lot of time between then and now, so who knows how I will be positioned.

ETA: (At the request of someone, I am pasting my introductory post from Slickdeals here:
I’ve been a member of the FatWallet community for a long time, and one of the most popular threads, though not necessarily the most useful, was the Individual Stock Discussion thread. I figured, it couldn’t hurt to start one here.

Keep in mind that some people buy and sell a lot of stocks while others invest for the long term.
Some people do no research and others do lots of research.
Some people have good luck, and some people have bad luck.
Some people can afford to take a lot of risk while others cannot.
Some people lie about their investments; some post only their successes.

All of this is a warning to you – nobody cares more about your money than you do (with the possible exception of a financial advisor, who may want to take your money and therefore cares a great deal about it).

The vast majority of my investments are in very low cost ETFs, but I currently have a handful of individual stocks that I am invested in.

Apple 3.3% of my portfolio. (With options to sell most of it come January, at 155)
Googl 1.7%
MA: 0.8%
NYT: 0.3%
ROL: 0.3%
TMUS: 0.3%

I am happy to share my entire portfolio, and occasionally do so. I’ve been investing for a long time and have no idea how I am doing in comparison to how I would have done had I kept it simple and invested in a broad index fund and simply added to it as the years rolled by. What I do know is that for many years the returns in my 401(k) were essentially zero. That had something to do with market crashes. But my individual portfolio did much better. So, I THINK I’ve done better than I would have had I stayed with fund investments, but it is by no means a scientifically arrived at conclusion.

During the financial crisis, I made a lot of money by investing when others were selling. I recall promising myself that I would be more careful with my money once the markets recovered. For the most part, I ignored my promise, or at least delayed its implementation. This year, I changed my asset allocation so that I am investing nearly 20% of my portfolio in fixed income (5.5% of which is earning 7% under NYC teacher’s fixed income fund). Previously, I was essentially 100% invested in equities.

Additional advice to people interested in growing a nest egg is to head on over to bogleheads.org and review their investment wiki. It is very well done and may convince you to forgo individual stock picks altogether. If you need the thrill of stock picking, then I also suggest heading over to Fool.com and trying out their Stock Advisor service. You can try it and cancel for a refund, particularly if your portfolio is under $10,000 (I would not pay a penny in fees with such a small portfolio).)

@uncamikey Yep, same David Scubadiver as at Fool.com! I subscribe, now and again, to their fool advisor newsletter, but less and less.

@mikk1 said in Individual Stocks/Investments:

@David-Scubadiver Please do! I’d definitely be interested in hearing your thoughts/experiences.

I’ve finally funded at Schwab Intelligent Portfolio, Wisebanyan and Wealthfront. Wisebanyan is the least expensive and generates a portfolio that is pretty close to where I’d come out on. My only hesitancy with them is their longevity as well as the fact that they use e-mail to communicate rather than requiring you to log in and view/respond to a “secure message” like very other financial account I’ve had for the past ten years.

With a 68/32 split of stocks/fixed income, Wisebanyan invested me as follows, at an expense ratio of .09%

VTI 40.5%
VEA 21.9%
VWO 5.1%

LQD 8.5%
VCSH 3.2%
SJNK 3.1%
VGIT 7.6%
TIP 6.1%
VNQ 3%

Wealthfront invested me in the following at an expense ratio of 0.08%
VTI 35% (US Stocks)
VEA 26% (Foreign Stocks)
VWO 22% (Emerging Markets)
VIG 7% (Dividend Growth)
VTEB 5% (Municipal Bonds)
XLE 5% (Natural Resources)
But you have to tag on their .25% management fee, bringing it up to 0.33%

Schwab invested me in a plethora of funds at an expense ratio of 0.21%

Stocks (77.42%)
FNDX : SCHWAB FUNDAMENTAL US LARGE CO ETF 15.02%
SCHX : SCHWAB US LARGE CAP ETF 11.33%
FNDF : SCHWAB FUNDAMENTAL INL LARGE COM ETF 10.05%
FNDA : SCHWAB FUNDAMENTAL US SMALL COM ETF 7.76%
SCHF : SCHWAB INTERNATIONAL EQUITY ETF 7.11%
SCHA : SCHWAB US SMALL CAP ETF 5.10%
FNDE : SCHWAB FUNDA EMG MKTS LARGE COM ETF 5.07%
FNDC : SCHWAB FUNDAMENTAL INTL SMAL COM ETF 4.78%
SCHC : SCHWAB INTERNATNAL SMALLCAP EQY ETF 3.14%
SCHH : CHARLES SCHWAB US REIT ETF 3.09%
SCHE : SCHWAB EMERGING MARKETS EQUITY ETF 2.73%
VNQI : VANGUARD GLBAL EX US REAL ESTATE ETF 2.24%
Fixed Income (10.7%)
EMLC : VANECK VECTORS J P MORGAN EMERGING MKTS LOCCURRENCY BD ETF 5.95%
SHYG : ISHARES HIGH YIELD CORPORAT BOND ETF 4.75%
Commodities (4.74%)
IAU : ISHARES GOLD ETF 4.74%
Cash (7.14%)

By the way, they don’t charge over at fool.com to join their discussion boards. http://boards.fool.com/

I took the plunge, regrettably and bought some Bitcoin, Ethereum, Litecoin and Ripple. I regret it only because it is a pain in the ass to deal with. It is somewhat difficult to hold long term because it cannot be easily transferred upon death. Or, should I say, it is too easily transferred in some instances (to unintended people) and too easily lost in others.

My opinion is that one should have no more than 5% of their net worth invested in any security. Bitcoin is far less secure than a security and I would say that one should have no more than 1% of their net worth in crypto.

@dangeruss said in Welcome FatWallet Refugees:

@orthros said in Welcome FatWallet Refugees:

Awesome.

Just be aware that because of the similarity in the name you may eventually get a C&D letter. IANAL but it does seem like the stupid sort of thing that eBates would do.

I am a little worried about that too. If they do, we should come up with a backup name. I will start a thread.

The names are not at all similar. Don’t y’all pronounce it Pee Hat?

Moderator Note: Added a new line to not make the reply appear to be part of the quote.

Tell me a little about what you have (i.e., how large a portfolio you are looking to invest, and how much is in an IRA vs. taxable account), either here or in a private message, and I will give you some input based on what I know. The other big player in the space is Betterment, and while I did not open an account with them, I could see using them over wealthfront if only because they were first to the market and haven’t gone through so many changes as Wealthfront. [I didn’t know that when I was picking one to try, but learned about it since].

@ritholtz said in Individual Stocks/Investments:

@david-scubadiver
We have invested in fixed assets in another place which are very difficult to liquidate. No stock investments. We have little bit in 401k, bank accounts and in Home equity. Is it too late to start investing in stock market in terms of age (40’s). We were too cautions. Though With good income and savings we could not make much out of our savings by being over cautions. That is kinda very disappointing when I look back.

Thanks

If you consider that even those who are retired need to be invested in the market, and that people saving for retirement are in the market at age 30, 40 and 50, it is certainly not too late to be invested. A conservative approach is to own your age in bonds meanings at 40 you should own 40% bonds and 60% stocks. You can do that simply with two ETFs: BND and VTI. U

I’d make sure to contribute to Roth IRA every year if you don’t already have a traditional IRA, and add to the 401(k), especially if your employer matches.

@meed18 said in Common sense rules of banking - tips & tricks !:

@david-scubadiver said in Common sense rules of banking - tips & tricks !:

If you use an ATM card, make sure your bank reimburses you for ATM fees.
If you use a checkbook, make sure your bank provides free checks and does not require a minimum balance.

Those recommendations are too specific.

My main bank doesn’t reimburse ATM fees, but it’s the closest ATM to my house and they have ATMs almost everywhere. I also have two secondary accounts that do reimburse fees that I keeps some money in, so in a pinch, I can use any ATM for free. I would recommend that people try and pay as little in ATM fees as possible, not that they need to limit themselves to a bank that reimburses ATM fees, though it is a good thing to have in a pinch.

As for free checks, this is such an uncommon thing banks offer today, you would be severely limited if you only banked at places that offer free checks. A $10 order of checks has lasted me over 3 years and I write a check almost every other week. That’s such a small amount of money that getting free checks is a negligible benefit. A better recommendation would be to buy your checks from a discount company instead of directly from the bank. They’re often 50% cheaper.

@meed18 said in Common sense rules of banking - tips & tricks !:

@david-scubadiver said in Common sense rules of banking - tips & tricks !:

If you use an ATM card, make sure your bank reimburses you for ATM fees.
If you use a checkbook, make sure your bank provides free checks and does not require a minimum balance.

Those recommendations are too specific.

My main bank doesn’t reimburse ATM fees, but it’s the closest ATM to my house and they have ATMs almost everywhere. I also have two secondary accounts that do reimburse fees that I keeps some money in, so in a pinch, I can use any ATM for free. I would recommend that people try and pay as little in ATM fees as possible, not that they need to limit themselves to a bank that reimburses ATM fees, though it is a good thing to have in a pinch.

As for free checks, this is such an uncommon thing banks offer today, you would be severely limited if you only banked at places that offer free checks. A $10 order of checks has lasted me over 3 years and I write a check almost every other week. That’s such a small amount of money that getting free checks is a negligible benefit. A better recommendation would be to buy your checks from a discount company instead of directly from the bank. They’re often 50% cheaper.

You are of course correct. It is better to pay for your checks rather than get them for free. And it is better to use a local bank even if they don’t reimburse your for your fees charged by other banks that will reimburse you for the charges of our local bank.

So, I am taking a stab at using a roboadvisor. Actually, trying out several. The two that seem most promising to me are Schwab Intelligent Porfolio and Wisebanyan. The main drivers for my potential move are that I want an inexpensive way for my spouse to manage the money (allocate investments) should I decide to die before I kill her and also to take advantage of automatic tax loss harvesting.

If I like the service it might just encourage me to sell my individual stocks. I’ll likely start a new thread on this if I have anything useful to say after my experiment.

@fivetalents said in Best Nationally Available High APY Liquid Accounts:

Scuba

No pride of ownership here. I don’t care if someone copies a thread I started and hosts it over here as their own. The only thread I remained active in was the Individual Stocks thread, and someone already started that here.

The important thing is that the rich will continue to get richer, so that means it is as important as ever to either be rich or get rich. If you can’t afford to make non-deductible contributions that means you aren’t rich and you need to change that. Preferably sooner, rather than later, so you can continue to benefit from non-deductible contributions should they limit the deductible portions.

Believe me when I tell you that you will be better off financially, if you can be rich and do this.

@deplorable-1 said in Individual Stocks/Investments:

My best investment currently is MORL at a $15 cost basis I’m earning 20% plus monthly dividend yield. The dividends are paid out monthly but vary from month. Some months are very high and some months are low but over the year average out to 20% or so plus stock appreciation. My overall return is like 40% for the year. I only invest in stocks that pay dividends anything else is just gambling IMO.

2x leveraged funds aren’t a “stock” in the traditional sense. And they can’t be held long term safely. So be car full with that one. It can mov, and fast, in the other direction. If it is a major part of your portfolio consider selling it and counting your blessings.

@padma said in Individual Stocks/Investments:

Any thoughts on AT&T;s big drop. I added some more to my existing position at 34.5 and it dropped further. Just wonder when the free fall will stop. The dividend certainly looks attractive.

A couple of months ago, someone suggested that investing in AT&T because of the dividend was a safe bet. I said that I saw plenty of room for the stock to drop more than 5%. I have not been following the stock and have no idea if it has dropped more than 5%, but the fact of the matter is that any stock you own can drop 50% easily and that should be a barometer for how much you can invest. No stock should represent more than 5% of your holdings, but regardless, if you can’t comfortably lose 50% of your investment in an individual stock you should cut the amount invested down to an amount where 50% won’t make your uncomfortable.

If you believe the stock is beaten down unfairly, then buy more. But don’t believe for a second that it “has to move” in any particular direction. It doesn’t. You can’t even say “probably.” That is why the smart money owns the market through low cost ETFs and why you should only have 5-20% of your assets invested elsewhere.

The easiest way to own individual stocks is to own a lot of them to diversify risk, and the easiest way to do that is where you can buy fractional shares and take your 5-20% money and pour it into 15-20 stocks of your choosing and see how it all goes. I am currently doing that with M1 Finance, and find it very helpful.

If you use an ATM card, make sure your bank reimburses you for ATM fees.
If you use a checkbook, make sure your bank provides free checks and does not require a minimum balance.

@skh12 To me, rich is being able take care of one’s own family, and someone else’s family, without the need to take on any debt, and without having financial constraints.

I picked up some GE yesterday morning figuring it might bounce back. I was right. It dropped another 2.75% after I acquired it.

The benefit to the token system seems to be that your password only needs to be given to Chase. Presumably, the folks with the Token cant use it to make transactions on your behalf so, in theory, it is a little more secure (assuming that you change your password that was previously given to Mint).

[link text]https://www.m1finance.com(link url)

If you are looking for a way to regularly invest in portfolio of individual stocks and/or ETFs selected by you, with no management fees or commissions, check out M1 Finance. It makes it really simple to invest regularly into a diversified portfolio, and it allocates your new purchase (and dividends) to those investments that are underweighted (as compared to the weights you assign to them).

By way of example, if I create a portfolio of 10 stocks equally weighted 10% each, and automatically invest $100 a week, it will spread that investment out (buying fractional shares) among the 10 stocks by purchasing $100 worth of each company. The following week it will divide the $100 in such a way as to bring the account into balance so that each investment is brought closer to the 10% original allocation.

This is a great way to dollar cost average into a three fund portfolio as well. You can rebalance as often as you like, should you wish to do so, simply by touch in the “scales” icon and it will sell what needs to be sold and repurchase what needs to be repurchased to bring the portfolio into balance all in one shot.

This is not a regular brokerage account – all trades are done once a day; no limit orders, etc.

@ma-barker said in Manufactured spending:

I now have a huge credit balance on my account. I don’t know if CFP will be able to reconcile this on their records and I tried to contact them but can’t get hold of a live person so all I can do it wait for them to make the necessary corrections. If someone experienced the same thing, did the “gift” stick?

I once received a $7,500 gift. Because I could be disbarred for doing so, I managed to make contact to let them know that I suspected the credit was erroneously posted.

M1 Finance - allows one to own a portfolio of individual stocks or ETFs, based on my defined allocations. Now, if I want to add to my position in 15 stocks, I make a deposit and the computer divides it up to the penny so as to bring my holdings closer into balance. They charge .15% of assets under management for accounts >$100,000. It is very nifty.