Stock Investing

[LETSGOBROWNIES]

2 hours ago, MWil23 said:

Amazon is going to be offering a 20-1 split here soon, and I know that some are down on them “post pandemic”, but I personally think they’re here to stay in most capacities.

I’m assuming we’re going to see more stocks start splitting to try to increase interest.  
 

A lot of stocks have gotten to the point where the average person can’t just go buy 10-20 shares every few months or even once or twice a year.

[MWil23]

6 minutes ago, LETSGOBROWNIES said:

I’m assuming we’re going to see more stocks start splitting to try to increase interest.  
 

A lot of stocks have gotten to the point where the average person can’t just go buy 10-20 shares every few months or even once or twice a year.

Last I saw, a share was like $3K. What "normal" person can afford that? Now, 20 shares you could potentially make work and diversify/save up for. Single stocks aren't my thing, but for those that have this diversified approach, it definitely has appeal and makes sense.

[LETSGOBROWNIES]

3 minutes ago, MWil23 said:

Last I saw, a share was like $3K. What "normal" person can afford that? Now, 20 shares you could potentially make work and diversify/save up for. Single stocks aren't my thing, but for those that have this diversified approach, it definitely has appeal and makes sense.

Yeah the idea that every 6 months or year you buy a single share kind of crazy.  At prices like that they don’t really appeal to most retail investors.

 

[MWil23]

Just now, LETSGOBROWNIES said:

Yeah the idea that every 6 months or year you buy a single share kind of crazy.  At prices like that they don’t really appeal to most retail investors.

 

Since the appeal as most of us fall within that 88% Middle Class threshold (to varying degrees), why would I buy 2 shares a year?

I literally invest $6,000 a year at $500 a month aside from my normal retirement pretax investments, so fiscally it makes infinitely more sense for me to do a diversified and moderate to aggressive indexed mutual fund portfolio than it would to go that route.

And to be honest, even with this ABSURD market, it would make more sense and be more advantageous from a taxation and long term investment standpoint (or even immediate return) to buy up a rental property or vacation home that I want to AirBNB or VRBO, flip, or hire a property manager to handle during "peak seasons" that I can use myself for me and my family, and then retire to in 20-30 years if I wanted.

[LETSGOBROWNIES]

22 minutes ago, MWil23 said:

Since the appeal as most of us fall within that 88% Middle Class threshold (to varying degrees), why would I buy 2 shares a year?

I mean, even if they’re expensive if the stock performs well, it performs well.  A good ROI is a good ROI regardless of how many shares you own.

I just think it’s a mental thing that people are less likely to want to choose it.

22 minutes ago, MWil23 said:

I literally invest $6,000 a year at $500 a month aside from my normal retirement pretax investments, so fiscally it makes infinitely more sense for me to do a diversified and moderate to aggressive indexed mutual fund portfolio than it would to go that route.

yep.  And many index funds are much more inexpensive per share.  Even if they aren’t, it’s easier to wrap your head around one share of a fun that encompasses the market vs one share of one company I’d imagine.

22 minutes ago, MWil23 said:

And to be honest, even with this ABSURD market, it would make more sense and be more advantageous from a taxation and long term investment standpoint (or even immediate return) to buy up a rental property or vacation home that I want to AirBNB or VRBO, flip, or hire a property manager to handle during "peak seasons" that I can use myself for me and my family, and then retire to in 20-30 years if I wanted.

I’m too lazy for this lol 

[MWil23]

1 hour ago, LETSGOBROWNIES said:

I mean, even if they’re expensive if the stock performs well, it performs well.  A good ROI is a good ROI regardless of how many shares you own.

I just think it’s a mental thing that people are less likely to want to choose it.

I guess what I'm saying/the point that I'm making is that it makes it almost IMPOSSIBLE for the average middle class American to "diversify" using this approach. If I can take a more conservative and diversified approach with a greater likelihood of sustained success over time with 40+ years of evidence, while I may not "get wealthy" like I would by buying individual stocks, I also have substantially less risk.

1 hour ago, LETSGOBROWNIES said:

yep.  And many index funds are much more inexpensive per share.  Even if they aren’t, it’s easier to wrap your head around one share of a fun that encompasses the market vs one share of one company I’d imagine.

My mind understands compound interest with ups and downs and market bull/bear concepts that may factor in. I don't need to worry about a single stock/single stocks and worry about SELL SELL SELL 24 hours a day. I'd rather lazily let my money work for me to obtain growth over a 25+ year period of time.

1 hour ago, LETSGOBROWNIES said:

I’m too lazy for this lol 

I totally get that. I'm looking to break into the rental market where I live because there's such a need for it with local university students. I've got some fail safes in place to prevent "trashing" my place(s), but breaking in is the hardest part, especially in this market.

I'm willing to wait it out until the market recorrects a bit, but as I said, still a fiscally more reasonable thing for me to do, especially coupled with tax benefits for forming an LLC that stock options don't offer.

[ramssuperbowl99]

4 hours ago, MWil23 said:

I guess what I'm saying/the point that I'm making is that it makes it almost IMPOSSIBLE for the average middle class American to "diversify" using this approach

Psychologically, I get where you're coming from, but Amazon's market cap is about a $1 trillion, so whether they have 1 billion shares and each one costs $1000, or if they have 20 billion shares and each one costs $50, you're owning the same fraction of the company if you spend $1000 on Amazon stock.

Don't get me wrong, I get it, having a stock that literally never splits like Berkshire Hathaway get up to a half million per share is intimidating, but your money goes the same distance either way.

[MWil23]

5 hours ago, ramssuperbowl99 said:

Psychologically, I get where you're coming from, but Amazon's market cap is about a $1 trillion, so whether they have 1 billion shares and each one costs $1000, or if they have 20 billion shares and each one costs $50, you're owning the same fraction of the company if you spend $1000 on Amazon stock.

Don't get me wrong, I get it, having a stock that literally never splits like Berkshire Hathaway get up to a half million per share is intimidating, but your money goes the same distance either way.

I should clarify what I meant earlier:

The issue is that most of us can’t afford a lump sum of $3,000 that’s not giving us the ability to spread it out over a bunch of various risk/conservative portfolio options. You nailed it on the capacity for profit and BH is a great example of the ability that a company like Amazon has to potentially reach that mark, but I also am just old enough to remember Enron as well.

One of the reasons I specified earlier that stocks “aren’t my thing” boils down to diversification and spreading my assets in a lot of other options (pun not exactly intended). Don’t get me wrong, 2010 me is buying up about 5,000 Bitcoins, but still.

[ramssuperbowl99]

13 hours ago, MWil23 said:

I should clarify what I meant earlier:

The issue is that most of us can’t afford a lump sum of $3,000 that’s not giving us the ability to spread it out over a bunch of various risk/conservative portfolio options. You nailed it on the capacity for profit and BH is a great example of the ability that a company like Amazon has to potentially reach that mark, but I also am just old enough to remember Enron as well.

One of the reasons I specified earlier that stocks “aren’t my thing” boils down to diversification and spreading my assets in a lot of other options (pun not exactly intended). Don’t get me wrong, 2010 me is buying up about 5,000 Bitcoins, but still.

But the core point is that a company divides it's total value (market cap) into shares, and however those shares are divided doesn't matter, if you buy $1000 of Amazon stock at current prices, you own 1/1 billionth of Amazon. There's nothing magic about 1 share beyond our dumb monkey brains liking to count stuff. (Which is a very real thing and I don't mean to discount it.)

Edited May 13, 2022 by ramssuperbowl99

[incognito_man]

On 5/11/2022 at 12:18 PM, incognito_man said:

Usually I scoff at market timing, but am loving my decision to reallocate from 100/0 to 65/35 over the last 6 months or so right now. Going to work my way back toward 100/0 at 3.5% for every 50pt drop back down to 3500 on S&P.

Also as of today I'm sticking my entertainment money into Coinbase stock. Their fundamentals are way too good for current pricing.

I wish I would have had more than a couple thousand of entertainment money. Went up 50% from where I got it lol.

 

[Shockwave]

On 5/13/2022 at 8:28 AM, ramssuperbowl99 said:

But the core point is that a company divides it's total value (market cap) into shares, and however those shares are divided doesn't matter, if you buy $1000 of Amazon stock at current prices, you own 1/1 billionth of Amazon. There's nothing magic about 1 share beyond our dumb monkey brains liking to count stuff. (Which is a very real thing and I don't mean to discount it.)

Contingent on if your broker allows fractional shares. Which I believe most do at this point which makes the split seem pointless. Prior to fractional shares a stock splitting was a means to allow all retail investors to participate.

[ramssuperbowl99]

19 minutes ago, Shockwave said:

Contingent on if your broker allows fractional shares. Which I believe most do at this point which makes the split seem pointless. Prior to fractional shares a stock splitting was a means to allow all retail investors to participate.

I did not know that was a thing. Lets you know how spoiled I am growing up doing it online.

[LETSGOBROWNIES]

21 hours ago, Shockwave said:

Contingent on if your broker allows fractional shares. Which I believe most do at this point which makes the split seem pointless. Prior to fractional shares a stock splitting was a means to allow all retail investors to participate.

I think there’s a psychological part of it too. Owning 1 share at $100 would likely be more appealing to many than 0.2 shares at $500 a share.

Maybe not…

[candyman93]

What a nightmarish week.

[biggie.]

My brother lost $7k in his Roth. Oof.