Stock Market Downturn?

Typically when stocks are down, mutual funds and bonds are up.
If your really interested in stocks, I suggest you SELL options. Never buy options.
Here is how it works: You invest in stocks in bulk of 100 shares. Let pick GM and make a fake price of selling right now for $100 per share. A person will pay a percentage to have you hold that stock for them. You can say I want $110 per share. I haven't done this in a while but IIRC on the 3rd Friday of the month, the person that bought your options have to either pass on it or buy your stock. The person that bought your options believes the stock will go up in that time period so they buy your options and if they don't buy them on the 3rd Friday, they pay the % they put down for the option. Either way you win. If the Stock goes up they buy it and you make $10 per share (not real numbers) and own the stock. If they pass, you still own the stock but get their $10 per share. So even if your stock goes down, you can still make money. My father in law did this for years, still does a little, but as a doctor he can do a lot of these options at once while guys like us do it small time. My wife handled it and we made money, but she got greedy and bought stocks on margins. I wasn't paying attention in detail and though she had outright bought the stocks. If i didn't check the market late one night during the last big collapse of the market and sold everything, the next morning I would have owed $20K. I lost over $90K in real money and was left with under $20K.
I have invested very little in the last 5 years. Gold and silver.

With so many ETF's, double and triple leveraged both positive and contrarian, one can make money up and down the market.  Example FAS and FAZ.  I have a preference to be in the market for the shortest amount of time possible to avoid downside risk.  Every now and then get caught, just stay principled in your stop sell loss percentage.  Mine is round 5% give or take.

If someone is looking to make cash, there are no real other choices than the stock market.

The federal government has been naked shorting paper gold to keep the price of gold in check and the value of the dollar up.  Else gold would be valued at $2k plus easy.  Its easy to spot when the government pulls this trigger.   Only a couple people even write about it.  No one cares I guess, corruption is everywhere. Gold is down $100 oz in the last 6 months and $13 today.

Going from 400 points up earlier in the day, closing over 200 down, a 600 point delta. Congratulations America.

WBAP has been playing at their news breaks some economist telling anyone over 50 to bail now and save what you have left. You don't have enough time to build it back up.

It's been an interesting week so far. Today was a nice head fake. It looks like things will continue to go down.

A slick place to learn options or futures (for free) is Tastytrade.com. They are a financial content company and are suppose to be the fastest growing financial media content company.

Tastytrade tells you exactly want to do and what not to do when things are going well or if a trade is going against you. They have a team of ~7 researchers and they crunch market data and present best practices. Which options work better than others. Which underlying is the best to trade, etc. Everything is archived. It's pretty addictive once you watch a few episodes.

Tom Sosnoff is the options and futures guru and majority owner. He started Thinkorswim and sold it to TD Ameritrade for something like $600M.

Looks like China is dumping US Treasuries in an effort to prop-up their currency relative to the US dollar. And it's not just a little bit of dumping either. In the last 2 weeks they dumped $106 Billion worth and they have enough on tap to do that again for 18 more weeks!

I'd guess US bonds would go in the dumper with yields forced higher to encourage someone to pickup the garbage. Maybe that'll be QE4, aka the US taxpayer's job. The bond market is gonna get crazy.

I get the feeling the US financials are still able to play on China's lack of sophistication but quickly will come up to speed and then play the US like a fiddle.

http://www.zerohedge.com/news/2015-08-25/devaluation-stunner-china-has-dumped-100-billion-treasurys-past-two-weeks

I was surprised when I saw this morning that the DOW started up and kept up when I already knew the Shanghai market took another big dive. But as stated by the end it also took a dive.


Anyone looked into Motifinvesting? Seems very interesting to me. Was wonder what you all thought since many of you seem to have experience in the market.

I'm pessimistic when it comes to MITM (Man in the Middle) investing.  Those people make money, and that money comes off gains that could or would be ours.  Call me greedy, but I don't have millions, and don't have the tax advantages that the big boys do like Mitten's, 13.9% tax rate.  My rate a lot higher with total income that pales.  

My idea is to be as close to investing as possible, learning as much as possible, and eliminating fees that can be exorbitant by the time their all rolled up.  401k's are like investing in prison.  You get these 20 choices of funds, funds that are ripe with fees.  John Bogle founder of Vanguard has stated that conservatively 40% of 401k gains are consumed in fees.  With trillions tied up into 401k's the firms make billions of years "managing" these funds.  Many 401k's to make an investment change takes days.  In a market that can swing 1500 points in three trading days, this is a serious disadvantage when someone could loose 10% to 20% of their value in just a couple days.  In summary, yes play the 401k game, take the company match and the tax deferred benefit.  The 401k shouldn't be the only tool in the belt.  The remainder of investment dollars into a brokerage and Roth and or traditional IRA.  Everyone in the family gets one of each, wife, kids.  Introduce them to it, learn it.  It might be the only way to earn a dollar in our country in the short term.  

We'll we're going to give the the big boys another shot at it today.  Let's see if they rape it again.  DOW futures up 300+ at the bell. Key factor number 382, it goes down a lot faster than it ever goes up.

I put in the max at my works 401k so I get the max match, I put in 6% and they match 80% of it so 4.8%. Its certainly not going to let me retire early but it should help(unless the country crumbles which looks more and more likely). Like you said, get the company match, even in a flat market the company gets me a 80% return.

My issue with my 401k is also exactly what you stated, the limited options and it can take days or over a week for my money to move where I want it. I have the option of a Fidelity brokerage acct that I can manage myself but the fees are high. Luckily my 401k chosen fund fees are reasonable(.01 or .02%) but you have to look because some of the fees are ridiculous at a high of .43%.

From my memory if you are careful you can make some big money in trading options but its not for the half informed or you will lose your tail. Plus if you get greedy you can either be high on the hog or slaughtered like a pig. I'd like to eventually get into it beyond reading but my knowledge is far too low.

I like Motif because you can create your own mutual funds or ETFs basically with picking up to 30 difference choices and then buying that basket for only $10 a trade or individual stocks for $5 a trade. I haven't opened up an account yet but look too. Just looking for different options and views before I pull the trigger.

That's the cool thing about the market, so many ways to find a nitch, and make some cash if one is "invested" in understanding the risk reward and actively engaged.  No rules. If one wants to make $50 on a trade, do it, sure beats losing $50 which I've done many factors over. More winners than losers, else I wouldn't be playing the game.

I recently moved from Scott Trade to Merrill.  Scott Trade was $7.95 a trade, Merrill $0 up to 30 trades per month, plenty for me.

Market doing down in a death spiral. USA USA USA I guess. Where's GHWB, I need him to tell us how great this global economy is once again. Or where's GWB, he can show me how great these free trade agreements are. Or OB on his TPP and others. Criminals. We didn't get a vote on this crap.

theshyguy wrote:

I put in the max at my works 401k so I get the max match, I put in 6% and they match 80% of it so 4.8%. Its certainly not going to let me retire early but it should help(unless the country crumbles which looks more and more likely). Like you said, get the company match, even in a flat market the company gets me a 80% return.

My issue with my 401k is also exactly what you stated, the limited options and it can take days or over a week for my money to move where I want it. I have the option of a Fidelity brokerage acct that I can manage myself but the fees are high. Luckily my 401k chosen fund fees are reasonable(.01 or .02%) but you have to look because some of the fees are ridiculous at a high of .43%.

From my memory if you are careful you can make some big money in trading options but its not for the half informed or you will lose your tail. Plus if you get greedy you can either be high on the hog or slaughtered like a pig. I'd like to eventually get into it beyond reading but my knowledge is far too low.

I like Motif because you can create your own mutual funds or ETFs basically with picking up to 30 difference choices and then buying that basket for only $10 a trade or individual stocks for $5 a trade. I haven't opened up an account yet but look too. Just looking for different options and views before I pull the trigger.

Robo investment firms have advantage by minimizing those worthless, overpriced investment brokers. There's studies that show just 1 to 2% annual fee seriously robs your retirement. Related to Motif, one thing to watch is how good the bid/ask pricing is. They could be juicing you there.

Another advantage of robo investing is they may allow you to enter your age and risk tolerance and it generates a balanced and age-weighted ETF portfolio. Once you have that you can invest it where ever you want. Of course they'd prefer you to trade with them for a relatively low annual fee.

I've found out some of the worst investment plans at work were those offered by insurance companies. We had one with Principal Financial and the fees were ridiculous, the choices sparse, and the performance sad. I had to wonder if my employer was on the take. I checked out my employer's plan at Brightscope and it showed how bad it was in relation to comparably sized companies. I presented senior staff with the info. Of course they had to get consultants to first defend it but within a year they changed the plan to another provider. But the change was still less than optimal. Brightscope.com is a slick tool to evaluate your employer's plan or compare another employer's plan.

The saga and volatility continues. DOW in early trading as up 150, closing down 250. 401k's ripe for the the pickens by the institutional big boys.

Shanghai and DJIA are jumping around still. Oil cant decide if its up or down. Winter coming so less demand, Iran allowed back into the world oil market, US production decline, China slowing, a lot of variables at play.

Caterpillar on a unprecedented 33 month sales decline.
Looking at its first 4 year decline in 90 years.

I read that yesterday too. I also read that they are letting 3rd party build and use their name. Seems quality may be slipping.

Quality or there's not enough economic demand to drive purchases. I'm hedging the latter. There's a reason the Fed won't raise rates, though they can only tell the lie for so long, after a while it becomes unbelievable. Thus they've back themselves into a corner. In the end there hasn't been a recovery. Major retail continues to shutter stores, Target, Best Buy, fast food. McDonald's now won't disclose the public it's store closures. The continual prop up only makes the inevitable reset that much worse when it occurs.

Yellen's speech was odd the other day. She appeared to be in a stupor. Maybe her meds were wearing off or she was having a medical condition.

Cat and other global industrial companies are in deep doo-doo. China transitioned away from an industrial economy where they built worthless cities and needless freeways. Of course global mining slows when China's demand for materials slows. Now they hope the consumer sector will take off but that will take many years.

I fear we're heading for a global recession. Germany was doing okay but now the VW/Audi scandal is shut them down. They say 1 in 7 German jobs are in the auto industry. I'm keeping my powder dry and selling calls during the downturn.

Anyone got any hot tips? With China continuing to slow down and oil sliding more every day it looks like oil stocks will stay low and go lower. A friend of mine that works for an oil company thinks oil will go down to the teens. Now he isn't high up so don't take that as gospel or anything but I bet it will go to the high 20's. China just put a $40 floor to their domestically produced oil. With oil so low I wonder if any of the major oil companies will have to finally cut their dividends, some for the first time in most of our lifetimes. Crazy days ahead.

Crazy day when political showdown in Venezuela, a major oil producer with the largest oil reverses in the world and Iran taking 10 US sailors prisoner doesn't do a thing in to oil price.

http://www.bloomberg.com/news/articles/2016-01-13/china-won-t-cut-fuel-prices-when-crude-trades-below-40-a-barrel

I meant mid 20's. $23 maybe?

It's a shame but looks like oil will only bounce after US oil exploration companies start declaring bankruptcy. US banks are going easy on the oil explorers so who knows how long the wait will be. The markets seem to know the worst is coming. The market volatility index (VIX) has been stubbornly high and is taking it's time to go back to normal levels.

As good as low gas prices are, it is what is helping the economy slide back into recession.

Yes, crazy as it is. That and the Fed pulling away the punch bowl.

Tanking today!

The Obama press and propaganda department is ignoring it completely.

pup wrote:

The Obama press and propaganda department is ignoring it completely.

Along with the rest of reality.

There's been a rash of company down-sizing in the news lately. It might be another musical chairs moment where we want to make sure employment positions are stable.

My lack of confidence in the economy is one reason I haven't been more active in the job hunt. But I have still been applying and will take another job if offered. But if not, I know I have good job security short of me doing something horribly wrong. If I was in the oil and gas industry or any other job related to that area I'd be living meek and saving as much as possible right now.