Investment in stock market

Amazon
viros

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Mar 25, 2020 6 Comments

New to Fidelity. Can someone be rich by buying collapsed stocks that give dividends now?

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TOP 6 Comments
  • Best is to buy ETFs. We’ve regressed 3-6 years of market growth (depending on the perspective) since February. This is a massive discount. That being said, we might be in a dead cat bounce and we haven’t yet reached the trough. In 2001 and 2008, we bottomed out at 50%. This means we might head down another 20-30%. Timing the market is impossible. Stocks are cheaper but also less valuable as the economy slows down and the risk is higher.

    If your time horizon is long, short term gains don’t matter. So entering the market piece meal, means you are reducing entry point level risk. Risk averse people might invest in gold or keep cash. One approach is 50-50 between stock and stable assets.

    You might buy some put options as protection of your ETF investments for extreme bear scenarios.
    Mar 25, 2020 3
    • Put options are really expensive now
      Mar 25, 2020
    • I currently don’t have any puts. I’m investing for a long time horizon (I’m still relatively young). However, someone just getting into investing in equities might want to go with something safer especially in tumultuous times like these. The puts I would recommend getting are not the same as the ones that investors are currently trading back and forth to make money. I was thinking puts with longer expiration dates and protective strike prices. Like 240p 9/18. One contract per 100 shares. So about 8% of your portfolio is invested in protective puts. Protects against losses in a dead cat bounce cliff.

      Whenever markets are frothy is a good time for protective puts. Like this winter before the crash. Things were high even taking covid aside. But this protection costs as well, about 8% in the example above. I pulled out half my portfolio into cash in late fall and put cash in 2% high yield savings accounts. The remaining half is down about 30%. I didn’t buy any protective puts — covid news had broken and markets hadn’t reacted much. So I mistakenly thought we were fine and didn’t pull fully out. Hindsight is 20/20.

      I’ve started buying back in. Slowly. 12.5% is back in SPY. I’ll consider putting another 12.5% into the market in 2-3 months.
      Mar 25, 2020
  • Intel
    TowelRowel

    Go to company page Intel

    TowelRowel
    You need an investment advisor or need to learn a lot ..
    Mar 25, 2020 0
  • Amazon
    chinese

    Go to company page Amazon

    PRE
    Google, Microsoft, Amazon
    chinese
    How much advisors take? Where can I get one?
    Mar 25, 2020 0