Stock Market what do you think
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesI'm still relatively new at RE...so can't give advice there... but I spend a lot of time in the stock market (many hours per day writing about stocks/options/gold etc.)
Right now is NOT a good buying time for stocks for small-time investors. This is a good trading environment because of the high volatility. (options especially)
Currently, we just hit the highest volatility EVER RECORDED...even higher than in 2008. Volatility records the expected movement of stocks. The higher it is, the wider the range. Right now, we're still above 60 on the volatility meter. And today, we saw something major...
Volatility went down...and stocks ended 3% down. That hasn't happened in over 10 years. Usually, volatility has gone down when stocks went up (because we were in a bullish market).
Right now, you're "catching a falling knife" as they say.
Everyone right now says "oh, stocks are cheap, buy now." And some are cheap.
Here's the issue...take Delta Airlines. They're in the hole...down over 70% in over a month. Sounds like a good buy? Well, airlines are highly leveraged industries...even if they do get bailed out...they could still go through bankruptcy (again). If you look at the last time they went bankrupt...their stock went from $20 down to $5 (a 75% drop).
Well...they recovered...but they never hit that $20 price point again until 2013. (4 years later from the drop)
And that came with some heavy stock buybacks which propped their stock price up. (Congress won't let that happen again).
As RE investors, we want a return on our money every year. Well, if history happens again...with some of these industries that need recovery...you could be sitting on dead money for a few years waiting for a return.
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During a bear market, there's an initial 'shock' drop. Then a rapid advancement back.
Then...there's another drop that goes even deeper. It happened in 2018 (a correction), 2008, 2000...
We are still in the shock drop. We'll see a 10%+ rebound soon. Another drop will follow that's deeper. It's at that last drop you want to buy the companies that will bounce back fast.
Yes, buy the companies in travel and entertainment (like Las Vegas), of course bank stocks, at that time too...invest in the ones that have the solid foundation to continue again. Last time airlines crashed, there was a lot of consolidation. Same with banks.
Watch and wait for that to play out.
We all want to 'get in at the bottom'...the stock market isn't going to pop 100% in a day.
You'll get a sense when the bottom is in once the shock is gone...and you start seeing positive economic signs. You'd rather be 3 months late from the bottom than 12 months early.
Also, you'll want to wait until the VIX is below 35 because then you know the markets have calmed. (You can go to CNBC.com and it's on the very top to see it)
@Jay Hinrichs. Experts say 100 minus your age is the amount your should have in Stocks and the rest in bonds. Having a good real estate portfolio gives us more protection. I’m too invested only in stocks in my 401 and quite frankly have been a bit frozen by l this mess. I do need to liquidate some to cash soon as the market has gone up a bit.
Motley Fool is a good publication and has made me a lot of gains , particularly with FAANG. Facebook , apple , Amazon , Netflix and Google. Costco is a good stock also , Disney.
@Jay Hinrichs
@Jay Hinrichs
I have some cash in bank i have been saving for a deal. Maybe not enough but have been looking.
Last Monday I put 8,300$ in the market and it is currently valued at 12,000$. 31% ROI...... that's a deal.
That’s a great return and more then the 1.5% my money was making in a savings account.
Goal is to double money then take out for my next deal.
You have to take opportunities that’s come in life even if you have to jump in unfamiliar areas.
Had I not read Rich, Dad, Poor, Dad.... listened to BP, bought my first house Hack last September I would not have had the confidence to jump in last Monday.
Bottom line: I am an entrepreneur and when an opportunities comes and it’s a deal I am going to jump on it.
The market will dip again in the next couple weeks , don’t miss out!
@Jay Hinrichs
@Jay Hinrichs
I have some cash in bank i have been saving for a deal. Maybe not enough but have been looking.
Last Monday I put 8,300$ in the market and it is currently valued at 12,000$. 31% ROI...... that's a deal.
That’s a great return and more then the 1.5% my money was making in a savings account.
Goal is to double money then take out for my next deal.
You have to take opportunities that’s come in life even if you have to jump in unfamiliar areas.
Had I not read Rich, Dad, Poor, Dad.... listened to BP, bought my first house Hack last September I would not have had the confidence to jump in last Monday.
Bottom line: I am an entrepreneur and when an opportunities comes and it’s a deal I am going to jump on it.
The market will dip again in the next couple weeks , don’t miss out!
@Jay Hinrichs
@Jay Hinrichs
I have some cash in bank i have been saving for a deal. Maybe not enough but have been looking.
Last Monday I put 8,300$ in the market and it is currently valued at 12,000$. 31% ROI...... that's a deal.
That’s a great return and more then the 1.5% my money was making in a savings account.
Goal is to double money then take out for my next deal.
You have to take opportunities that’s come in life even if you have to jump in unfamiliar areas.
Had I not read Rich, Dad, Poor, Dad.... listened to BP, bought my first house Hack last September I would not have had the confidence to jump in last Monday.
Bottom line: I am an entrepreneur and when an opportunities comes and it’s a deal I am going to jump on it.
The market will dip again in the next couple weeks , don’t miss out!
Good luck to you. Sounds like gambling. Don’t forget about income taxes. Also no roi until you sell. Means nothing on paper.
I'm popping back in here on March 27, after three straight days of gains in the DOW, to once again state; I don't have a damn clue what is going to happen. Record unemployment numbers? Dow shoots up 1k points. Stimulus package announced but not approved yet? Up again. And then down today.
Here's my take.....I'm leaving everything as is, and riding this either into the ground or into the future several years ahead. I read an article about 3-4 months back that said the two groups of people that have done the best in the stock market over the last 20 years were; Dead People, and those that forgot they had an account. Yep. Those that did nothing but let it ride. I'm happy I have my real estate holdings as diversification.
I'm popping back in here on March 27, after three straight days of gains in the DOW, to once again state; I don't have a damn clue what is going to happen. Record unemployment numbers? Dow shoots up 1k points. Stimulus package announced but not approved yet? Up again. And then down today.
Here's my take.....I'm leaving everything as is, and riding this either into the ground or into the future several years ahead. I read an article about 3-4 months back that said the two groups of people that have done the best in the stock market over the last 20 years were; Dead People, and those that forgot they had an account. Yep. Those that did nothing but let it ride. I'm happy I have my real estate holdings as diversification.
Agreed with basically all above. I took a nice chunk out of the market on about March 10th or so, whenever NY state started having major issues and the National Guard was mentioned in some news articles.
NOBODY knows where the bottom of this is, and you know there's lots of behind the scenes games being played.
But I'm willing to bet that the Stock market in Mid-april will look uglier than it is now. So I'm ready on the sidelines.
Amazon is still cruising along at $1,900 a share, wild.
Facebook and Google are way down from their Highs, I have them on my Xmas wish list
@Frank Wong BA is not going to Zero,, BA is one if the primary’s govt defense contrcator . It is not just another company like GM , ford or sears , its critical to self defense and source for many global defenses.
It will find a bottom and financing and head back up as it keeps ranking in profits as it has down for the last 50 years
I would state this differently.... BA is definitely not going out of business, the US government will not allow that, but that doesn't mean that equity shareholders could not be mostly wiped out or diluted. They could easily get into crash crunch and have to restructure under bankruptcy laws....or issue warrant to the US government that would dilute the current shareholders. They already drew a ridiculous amount from a line of credit....Need to remember that shareholder will get paid last....the gov, banks and bondholder will all be in front of them in line.
@Bjorik Mutize
That was Preston. I’m a big listener too. If someone as smart as him pulls out it’s a good indication to wait lol
This stock market is a total enigma. It's UP after this weekend... The powers that be must really know things that we don't know.
Or is this all just smoke and mirrors?
Very strange times, I thing sitting on the sidelines a little longer will be beneficial.
