OT - Money / Investing Thread (aka financial no stupid questions)

[Cincydawg]

My retirement was nearly all in an employee stock plan.  The good news is the company put the money into it for us, and over the years that share went from 5% to 25% of our salary (not a deduction).  The bad news is initially it was all in their stock, they allowed some diversification later but the options were not good.  When I retired, I got it all out (from JP Morgan) into my IRA where I could self manage, but as I've said, I had pros do it for three years until I felt I could handle it.  I got pretty lucky with 4-5 picks over the years, one was Costco which the pros said was too expensive, ha.  Another was Apple.  

I had THOUGHT a retiree should invest only in "safe" dividend paying securities and bonds, but I learned differently from the pros.  That opened my eyes.  Of course I still have ten years in "safer" investments, but the monies I might need further out are in some riskier investments, nothing crazy.

The other key is when a stock goes way up, you can find suddenly you have 25% or more of your portfolio in one stock, which isn't desirable, so rebalancing is key also.

I look at the basket almost daily and trade a few times a week, often selling something over the past couple of years, and buying bonds or less risky stocks.

[utee94]

I kind of forgot about my IRA from the first company I worked for post-undergrad. When I was laid off from that company back in 1998, I rolled it out of the company's 401K and into an IRA.  I'd only been there for 4 years, salaries were pretty depressed at the time, and there really wasn't that much money.  

So fast forward to this year when I'm doing my taxes, and I finally decide to take a look at that fund.  Last time I looked closely, it was maybe around $70K or $80K.  It had been appreciating ok over the decades but like I said, the initial investments were pretty low.  I obviously hadn't been managing it closely at all, I had originally put the money into some moderately aggressive funds plus I left some of it in the company stock and none of those returns were all that great, but since the investment was low, I'd never bothered to rebalance or diversify.  Basically I thought of it as "just not that much money" and not worth my time.

So imagine my surprise when I finally looked closely at it a few weeks back, and saw that it was now up to about $250K.  Apparently my aggressive funds had done pretty well sinve COVID, and also my old company had spun off my old division, given me shares of that stock when it split off, and that particular new stock had done pretty well over that span.

So, yeah.  What I'd considered to be an insignificant part of my retirement portfolio has become something more important, and now that I'm finally paying attention, I'm in the process of rebalancing and diversifying it a bit.

This could probably go in the Happy thread although it didn't happen today....

[bayareabadger]

Immediate 15% return beats the S&P 500 annual return on average. And if you're buying based on a lower lookback price, it's even higher.

So selling it ASAP and then turning around and throwing that in an index fund is still worth maxing out your ESPP contributions. Only problem is that you pay STCG on that 15%, but it's still more than if you were just throwing it in the index from your paycheck.

It also hits twice a year, so it’s 15% on income between 6 and 0 months old. We’re a fan of that. 

It’s been maxed. There’s a slight gap where we either get growth or a few losses to harvest, so that’s nice too. 

[Honestbuckeye]

I kind of forgot about my IRA from the first company I worked for post-undergrad. When I was laid off from that company back in 1998, I rolled it out of the company's 401K and into an IRA.  I'd only been there for 4 years, salaries were pretty depressed at the time, and there really wasn't that much money. 

So fast forward to this year when I'm doing my taxes, and I finally decide to take a look at that fund.  Last time I looked closely, it was maybe around $70K or $80K.  It had been appreciating ok over the decades but like I said, the initial investments were pretty low.  I obviously hadn't been managing it closely at all, I had originally put the money into some moderately aggressive funds plus I left some of it in the company stock and none of those returns were all that great, but since the investment was low, I'd never bothered to rebalance or diversify.  Basically I thought of it as "just not that much money" and not worth my time.

So imagine my surprise when I finally looked closely at it a few weeks back, and saw that it was now up to about $250K.  Apparently my aggressive funds had done pretty well sinve COVID, and also my old company had spun off my old division, given me shares of that stock when it split off, and that particular new stock had done pretty well over that span.

So, yeah.  What I'd considered to be an insignificant part of my retirement portfolio has become something more important, and now that I'm finally paying attention, I'm in the process of rebalancing and diversifying it a bit.

This could probably go in the Happy thread although it didn't happen today....

The long game!👍

[betarhoalphadelta]

one was Costco which the pros said was too expensive, ha.

I find COST fairly intriguing. I don't understand how a boring stock like that, with no explosive growth opportunities on the horizon, can trade at 40-50 forward PE.  

I feel it's a VERY solid company, well managed, beloved by its members--myself included. 

The stock just seems really expensive. It's not a meme stock like TSLA, so it's not like the fundamentals are completely divorced from performance. But it's not a growth stock, so trading at that high of a multiple is weird. It's trading at about 2x the forward PE multiple of NVDA, a company projected for 35% earnings and 30% revenue growth from FY27 to FY28. 

How does COST stay so high?