Rental Property Investor · Souderton, PA · Member since 2020 · 124 posts · 106 votes
For us real estate investors this is a good time to have rental properties while we watch others portfolios crash with the stock market.
Other than a moderately safe mutual fund I contribute to monthly and my 401k, I am not involved in trading stocks.
Do you guys think this is a good time to buy stocks while they are so low?
I made an account on Robinhood and found some stocks that seemed like good investments. BAC, V, FB, MPC and ET. If I invest 1k and they return to where they were before the virus, in a year it will give me a whopping $500 return. :/
I don't have the knowledge of the market to be comfortable investing 20k (hoping to make 10k in a year).
Are there any stock pros here that have any tips for someone trying to capitalize on the low stock prices?
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
6y
You start out by mentioning the reasons why you don't like the stock market...and end up asking if this is a good time to invest in it. Just because it's way down, doesn't make it a better investment to you than if it was up.
If someone had a property that you described as "a giant turd, with tenants" and "I wouldn't buy that property if it was $????? (fill in any number here)". Then, the price dropped to half of what it was when you said you would never buy it. Would you then be interested in the "turd at half price"?
I'm not saying the SM is a bad investment. I'm just questioning if it is for you since all the reasons you stated for not investing in it...haven't changed.
Los Angeles, CA · Member since 2019 · 512 posts · 301 votes
6y
@Jacob Lapp ideally you put your money in a stock, don’t look back until 2-10 years later where it’s multiplied many times over.
In truth
Most people throw their money in an industry because the price seems low and then when bad news continues or reappears or the industry gets shaken or uncertain(which it often is) you will more likely be selling during panicked times because you will only understand half the industry and you won’t have the confidence to see what know one else sees. So go ahead and buy all you want, but you also gotta know when to sell or not sell, those are tough
Rental Property Investor · Souderton, PA · Member since 2020 · 124 posts · 106 votes
6y
@Jonathan Watt Thats why I only wanted to put in 1k and not look at for a while (check in once a year or so). My livelihood/retirement doesn't depend on that money. I did the same with crypto when that first started and did pretty well.
I'm more so asking if the stocks I mentioned seem good to use that type of strategy on, or if theres better ones that seem more profitable long term.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
6y
You start out by mentioning the reasons why you don't like the stock market...and end up asking if this is a good time to invest in it. Just because it's way down, doesn't make it a better investment to you than if it was up.
If someone had a property that you described as "a giant turd, with tenants" and "I wouldn't buy that property if it was $????? (fill in any number here)". Then, the price dropped to half of what it was when you said you would never buy it. Would you then be interested in the "turd at half price"?
I'm not saying the SM is a bad investment. I'm just questioning if it is for you since all the reasons you stated for not investing in it...haven't changed.
Rental Property Investor · Souderton, PA · Member since 2020 · 124 posts · 106 votes
6y
@Michael P. @Joe Villeneuve All I stated was that if you have a bunch of money tied in the SM now you are looking at your account bummed. And if you're smart and know that it will go back this is the time to buy.
I'm not ******** on the stock market. I stated I don't have enough confidence and knowledge in it to make an educated decision on what to do at some record low points.
If your answer as an experienced stock trader is don't buy, thats fine. If your answer is buy, I'm asking what. If it's neither and you want to **** on me for asking what I should do, then you shouldn't respond to a forum post where someone is asking for help.
Rental Property Investor · Souderton, PA · Member since 2020 · 124 posts · 106 votes
6y
@Joe Villeneuve No I appreciate your input. But I think my original post was misinterpreted. I don't know much about the stock market, therefore don't have an opinion either for or against it.
I just stated this being a real estate forum. We are in a better position at the moment compared to people who have a lot tied up in the stock market crash.
I'm interested in capitalizing on the market being low right now. I'm asking how to do so.
My frustration came out at the last guy and I'm sorry for lumping you into it.
Los Angeles, CA · Member since 2019 · 512 posts · 301 votes
6y
@Jacob Lapp I love the stock market. This is not an ideal website for finding stocks, trust me.
Having trouble? Read One Up on Wall Street by Peter Lynch. The most practical advice to give you a rational perspective of how all the chaos truly does work or get perceived.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
6y
According to Mr. Wonderful (from Shark Tank) 70% of the money made from stocks comes from dividends.
I range between dividend stocks and sectors I think will do well. Though the amount I have in the stock market is minimal (I tend to throw most of my money into my wholesaling business as well as real estate).
@Joe Villeneuve No I appreciate your input. But I think my original post was misinterpreted. I don't know much about the stock market, therefore don't have an opinion either for or against it.
I just stated this being a real estate forum. We are in a better position at the moment compared to people who have a lot tied up in the stock market crash.
I'm interested in capitalizing on the market being low right now. I'm asking how to do so.
My frustration came out at the last guy and I'm sorry for lumping you into it.
No problem.
I prefer FOREX. I think because it's short term, and there are controls in place that are similar to those in REI...and it's fun.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
6y
@Jacob Lapp Is it a good time to get into the stock market? Maybe, maybe not. It’s been a wild roller coaster lately and likely will remain so in the near future. If you admittedly don’t know much about the market, it will be a stressful time to start playing around. There are some good buying opportunities right now, but other companies may go to zero (meaning complete loss of capital for investors) and it’s anybody’s guess which ones those are (some are obvious but others will probably surprise a lot of investors). I would not recommend trying to pick individual stocks right now, or to invest any money that you may need access to in the near future. If you’ve been looking to get in for some time, and are sitting on cash, and don’t mind having it tied up for an unknown amount of time, you’re in a good position as everyone is trying to get cash out right now in order to reinvest into what they think is a good value, when they think we’ve hit the bottom. The trick is guessing correctly on what is a good value and when we’ve hit the bottom. As always, I’d recommend investing in an ETF consisting of mostly aristocrat dividend stocks and holding them forever but I expect market volatility for the foreseeable future so it will be a stressful time for someone with limited experience in the market for sure. I’m both selling and buying but I’ve been trading since 2007. Some experienced swing traders are making fortunes right now as we’re seeing the biggest swings in stock market history (Thursday had a 1900 point swing, the largest ever). Others are losing their shirts. It’s not a time to experiment with strategies like short selling or puts and calls if you’re inexperienced, but it may be a good time to buy something to set and forget like an ETF or a blue chip mutual fund at a discount. Or what you buy may go to zero. Good luck!
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
6y
@Jacob Lapp buying broad index funds and Europe related funds is a good idea right now. Dollar cost average it in though as the bottom may not be for a while.
I was wondering the same thing and did some google research(I’m famous for that,lol), and realized analysis paralysis was setting in so I just through $2500 in the ring on Royal Caribbean (RCL) yesterday. Like someone else said, I’m thinking long term, years maybe. But in answer to your question, yes, now is a very good time to enter the market. Like everything else, the market is cyclical. It will return.
Winners don't give out their secrets on public forums that would be dumb. For you i'd advise penny stocks. Can you imagine, buying at 2c and selling for 5c? OMG!!
Rental Property Investor · Souderton, PA · Member since 2020 · 124 posts · 106 votes
6y
@Michael P. Thanks! My advice to you would be stay off the forum if you don't want others to win! But hey if you like just tearing people who want to also learn you can definitely still do that here!👍🏼
Developer · Atlanta Ga · Member since 2011 · 47 posts · 37 votes
6y
I've personally been through two stock market crashes and it wasn't fun. A couple of things I've learned...don't chase stocks because they are "low" and know when to cut your losses. I started playing in the stock market in 1995. Did well on a few stocks and thought I was a pro and went all in around 1997 and 1998. Big mistake. During the dot.com crash I chased yahoo, juniper networks and a host of others into the abyss, trying to dollar cost average down...bad decision. At the real estate crash and recession implosion, I chased REIT's and MLP type stocks into the ground.
During the recession I started dabbling in trading options. If you learn how to effectively trade options, you can protect your stock purchases tremendously. A book I recommend is “The Bible of Option Strategies” by Guy Cohen. It really taught me how to hedge against my stock purchases in the event the underlying stock tanked (ie- you can buy a put on an option you own, if the price of the stock falls, your “put” increases in value. It’s a way to hedge.
If I see a stock I want to enter, I never outright buy the stock, I sell a put on the stock. That way I get in cheaper than what the actual stock is at the current time I want to enter it. You can google “selling puts” for some basic info on it. It’s a very basic stock strategy.
I try to follow what the big boys do. They can be wrong, but many times they have more info than someone like me has on various companies. I'm just a vulture circling for some crumbs. Mark Cuban was talking about purchasing more twitter and live nation this week. Carl Icahn said his biggest position is shorting CMBS (Commercial mortgage backed securities) this week, which is scary for the commercial real estate market ,but if he is right and I dabble in shorting some of those, a good win. My point is, watch the guys who are billionaires, research some of what they do, and then make your own decision whether you can live with the risk.
I’m personally selling Puts on Caterpillar and Live Nation next week if the market drops after this spike on Friday. Again, that’s not advice for you to go do...I could be very wrong on those trades...that’s just what I am doing next week for myself..grab some good investing books, research some good ETF’s (QQQ is something I love) and put in what won’t make you have panic attacks if you lose 1/2 of it in a week. ie - start small and hedge with options.
Hey Matthew, are you selling naked puts or cash secured? Just asking as a novice person reading this trading naked would be a risky bet.
Since the volatility is so high, spreads are pretty fat right now,but don't know when it will drop to grab the premium ;)
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For the other answers, we are in an unchartered market. Yes, the market will recover at some point, bit this steep drop in a matter of weeks is unprecedented since 1929.
The market could very well keep diving to DOW 15000.
I'd wait until the market hits a floor resistance and starts going up then getting in rather than trying to time it.
Else, you could be sitting frustrated with losses for 12 months and tempted to sell
Developer · Atlanta Ga · Member since 2011 · 47 posts · 37 votes
6y
@Joe Cassandra I’m selling cash secured since I do want to own the stock, regardless of whether it gets “put” to me or not. It’s just a way I gain entry into a stock I want to own, a little cheaper. If it never gets “put” to me, it’s a way to collect the premiums week after week...which is fine by me too.