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

[Riffraft]

WTF happened to the market? I checked my stuff before a meeting and was up a fair bit, and then checked again and everything cratered by market close...

Seems like maybe things jumped right after the Fed said they were holding rather than raising rates... But what caused it to then reverse?

all the talking heads being negative about what the fed did and said (or didn't say)

[betarhoalphadelta]

all the talking heads being negative about what the fed did and said (or didn't say)

I'm much happier now that I wake up and see my company stock is up 15% today 

[847badgerfan]

Everything is up today, until someone on Wall Street farts.

[Cincydawg]

Not everything, my stock option gambit was on ABBV, a drug outfit, I sold August calls, and the stock shortly went well past $260.  Today, the price has dropped to $257.  So, my calls are now out of the money, again.  It's good I think not to let daily gyrations impact your decisions.

I took a small position in SKHY, this Korean chip maker that just IPOd.  It has swung from pillar to post.

[utee94]

I've recovered pretty much everything I "lost" yesterday.  Take a look at the 1-year return trendline on the market and you can't really even see yesterday.  Noise.

But folks gotta freak out about something.

[847badgerfan]

I've recovered pretty much everything I "lost" yesterday.  Take a look at the 1-year return trendline on the market and you can't really even see yesterday.  Noise.

But folks gotta freak out about something.

Exactly.

Panic investors are the worst kind.

[Cincydawg]

Some, maybe a lot, of the volaility is due to algorithms.  

[utee94]

Some, maybe a lot, of the volaility is due to algorithms. 

Animal spirits made flesh by encoding them into the globally interlinked financial systems.  What could possibly go wrong???

[MikeDeTiger]

Exactly.

Panic investors are the worst kind.

I'm more like a panic buyer, if/when I have the ability to be, which isn't often.  

Every time I see a tanking market, everything in me wants to liquidate everything I own and buy, buy, buy.  

[FearlessF]

I've recovered pretty much everything I "lost" yesterday.  Take a look at the 1-year return trendline on the market and you can't really even see yesterday.  Noise.

But folks gotta freak out about something.

I just sit back, don't think about it much, let a bunch of smart dudes with decades of experience handle it

if they do freak out about something, they don't let me know about it.  (I doubt they freak out often)

[MikeDeTiger]

I'm much happier now that I wake up and see my company stock is up 15% today

I've recovered pretty much everything I "lost" yesterday.  Take a look at the 1-year return trendline on the market and you can't really even see yesterday.  Noise.

Well, crap.  Here at the end of the month is usually when I make my retirement "contributions" in the market.  Looks like I missed my window to buy low.  

[betarhoalphadelta]

I took a small position in SKHY, this Korean chip maker that just IPOd.  It has swung from pillar to post.

They didn't just IPO. They just for the first time got listed on US exchanges. They've been on the Kospi index in South Korea for a while and I believe have been listed on European exchanges as well. 

Samsung and SK Hynix, just two companies, combined to be 60% of market cap of the Kospi index as this chip shortage and the ensuing market run pushed valuations up. 

As I read about South Korean investors, it sounds like they're a bit insane. Love to invest with leverage. And there were recently-introduced 2x levered ETFs of Samsung and SK Hynix that they bought into in droves. 

Well, things got crazy...

The damage has already reached extraordinary proportions.

According to Ioannis Blekos on Goldman Sachs’ trading desk, more than 1.2 million leveraged retail accounts across the Korean market had triggered margin calls by July 13. Approximately 320,000 to 360,000 accounts were fully liquidated by brokers.

South Korea has an adult population aged between 15 and 64 of approximately 35.7 million. On those estimates, roughly one in every 30 working-age adults has been hit by a margin call.

That is no longer merely an equity correction. It is a household balance-sheet event.

[betarhoalphadelta]

So... Financial advice question.

I currently contribute 10% of my income to the company ESPP. There are a lot of benefits to it, such as a 5% discount with an [up to] 2 year lookback price. So if the stock appreciates relative to my lookback price, I can make a significant instant profit on a buy. I've traditionally used it as forced savings to have a SHTF fund. By keeping the money out of my hands it ends up only being used when needed, while if I'd just tried to put it in savings (or leave it in my checking) I know I would've spent it. 

Well, going forward I have enough to cover a SHTF situation, so I don't really *need* to keep contributing. After my next purchase late 2026 which will be the last on the current lookback period, I don't expect another 10x+ movement in the stock from here (although I'd love it lol). So some of the upside might not be there for the instant profit on the stock going forward. 

Next summer I want to buy a house. That'll coincide with another kid leaving the nest (and a commensurate reduction in child support). But houses here are expensive... No matter what, I can't afford a mortgage w/o including that 10%. 

I'm planning to at least ride the 10% into the next purchase period that ends late spring 2027. But from there I'm considering dropping it to 1% so that I can actually contribute that 9% to mortgage payments. With that, I'm still in the program so if the stock price becomes advantageous vs lookback I can always ramp it back to 10%, but the 9% ends up in my bank account every month instead of only having it lump sum into ETrade every 6 months when we have a stock buy. 

The alternative is to keep contributing 10%, live cash flow negative on a monthly basis, and sell stock as needed to make up the difference. That way I continue to have all potential upside of the ESPP program and just might accumulate more $$ over time. And if there's an unexpected stock price move I'm already at 10%, since I can only ramp up percentage every 6 months for the next offering period, not within a specific offering period. 

Thoughts? What would you do? 

[Cincydawg]

I have been leary about buying real estate for some years now, even though we did 8 years back.  If you can manage putting 10% of your AT income into that plan, I'd probably continue, maybe I'd drop to 5% if needed.

Your picture is a bit complicated for me to add much advice though.