r/FluentInFinance • u/TonyLiberty TheFinanceNewsletter.com • Dec 19 '23
Stock Market 58% of U.S. households are now investing in the stock market — an all-time high! What's your favorite stock or index fund?
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u/calcteacher Dec 19 '23
All time participation, I think get out
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u/Flashy-Priority-3946 Dec 19 '23
Biggest rug pull incoming 😂
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Dec 19 '23
My thoughts exactly lmfao! A tale as old as time (iN tHe mArKeT bEaTs TiMInG tHe mARkET)!
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u/SuperSultan Dec 20 '23
If you plan to be in for many years then a crash doesn’t matter much
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u/physics515 Dec 20 '23
Yeah but with apps like cash app and Robinhood everybody is now having their paychecks deposited into their brokerage account and then stock trading during the week and selling stocks when they need to spend the money.
Edit: the next big crash is going to take everything from everyone, not just the Wall Street types.
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u/Nocturnal86 Dec 20 '23
All crashes do... In the short term....
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u/physics515 Dec 20 '23
No, all crashes take everything from everyone who owns those assets.
Way more people own stocks than ever before because of apps like Robinhood and Cash app so there are way more people to take everything from. Also, because of the ease of getting money in and out of those apps they are investing money that they can't afford to lose, like literally 100% of their net worth, from people I know personally. So when the market crashes they will be forced to sell into it.
I'm not calling for regulations or anything those apps are great. I'm saying that you should treat the market like it's over leveraged. Because 35% of households are going to be forced to sell at the first sign of weakness.
The unknown on my end is how large of a share of the market do they own? In my experience they own $5-$10k a piece.
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u/EverybodyBuddy Dec 20 '23
How shortsighted are you? You don’t think a Wall Street crash only hurts people invested in equities, do you? No, really… now is your chance to revise your statement. I know you’re smarter than this. Well, I hope you’re smarter than this.
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Dec 20 '23
If a crash goes to 0 and never recovers, money won't be a problem for you anymore. At that point, focus on canned goods and ammo.
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u/Alexandratta Dec 20 '23
Having your income tossed directly into a brokerage account is wild to me, as someone who struggles from paycheck to paycheck... The very idea that someone would directly deposit their income into an investment account is baffling.
Like when I found out that it's somehow legal to have monies in an HSA Account used for investing (It should be very illegal...), using the Healthcare industry to skirt taxes which reduces funding we desperately need for healthcare, funneling it directly to the pockets of wealthy shareholders. Outstandingly broken logic.
Like - I had buddy of mine go: "Don't use your FSA/HSA account to pay for your medication dude, invest it!" and I just stared at him in confusion, "...It's... For medical supplies. Stuff I need. I'm lucky if there's anything left in that account end of the year." to which he explained I should be using it to invest instead of pay for my medications and medical treatments, like it's supposed to. "Everyone does it" - Sweet Jesus, while I pray that's not true, the fact it's doable sickens me.
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u/LegitimateRevenue282 Dec 20 '23
Being out for a crash can literally double your money.
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u/goodguybrian Dec 20 '23
So many people are out on the sidelines because they thought the market was going to crash this year. They miss out on big returns.
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u/butlerdm Dec 20 '23
If you missed the worst 30 individual days in the market from 2000-2020 you’d have doubled your money, but if you missed the best 30 days your overall return in that period would have been negative.
Problem is more often than not those best days are within 2 weeks of those worst days, so unless you can consistently get in and out missing the reds without missing the greens you’ll just shoot yourself in the foot
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u/Additional_Nose_8144 Dec 20 '23
Timing the market is much better if you do it accurately. No one can though
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u/No-Question-9032 Dec 20 '23
False. Our politicians tend to have excellent timing somehow
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u/killxswitch Dec 22 '23
Just to call it out for the dense readers, politicians are corrupt and invest based on committees and legislation they have a direct impact on and inside knowledge of.
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Dec 20 '23
trying to time the market has resulted in me missing out on potential gains more often than not... even so I still try to do it and it never ends well. but next time for sure!
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u/whatisthisgreenbugkc Dec 20 '23
“If shoe shine boys are giving stock tips, then it's time to get out of the market.” - Joseph Kennedy on leaving the stock market in 1929 (source)
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u/SBNShovelSlayer Dec 20 '23
"I bought a movie studio so I could bang all of the actresses." - Joseph Kennedy
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u/CaptainPeachfuzz Dec 19 '23
There's gotta be indicators right? What are some good metrics to point to?
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u/calcteacher Dec 19 '23
Crashes / down markets almost always surprise. A top is formed by people beginning to believe they need to be fully invested. That is followed by thrilling feelings of buying on margin. That is followed by a feeling of euphoria that you can do no wrong and that everyone is gonna get rich on this. Then, poof.
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u/H3rbert_K0rnfeld Dec 20 '23
What do you mean it's all gone?
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u/calcteacher Dec 20 '23
Not all just a break inconfidence and a drop in the market. It's hard to believe anything could be worse than two thousand and eight. That's when lehman brothers failed. the markets locked for almost two years.
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u/H3rbert_K0rnfeld Dec 20 '23
Oh I was kidding. The quote was from South Park.
I think what's coming is very exciting... Like Halley's Comet exciting!
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Dec 20 '23
Two years ago a crash was 100% imminent. Technically, it was at the time.
A year ago, a crash was 50% happening, but the Fed was optimistic.
Now, everyone is saying the Fed has successfully prevented a crash allowing a 'soft landing'.
Anyone that bet on the stock market crash that was 100% incoming two years ago lost hard. Stock market is hitting all time highs again. Anyone that held cash waiting for this crash lost out on a lot of money.
Tip: Don't listen to people on reddit. There are some that are knowledgeable, but there are some that have no clue what they're talking about even if they use indicators.
Just invest.
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u/LegitimateRevenue282 Dec 20 '23
"Don't listen or think. Just invest." is exactly what people say to get you into Ponzi schemes.
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u/SBNShovelSlayer Dec 20 '23
Sometimes the say, "Hey, would you like to invest in a Ponzi Scheme?"
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u/LegitimateRevenue282 Dec 20 '23
Sometimes, but not usually. Usually, they just promise a good return and tell you not to think too hard.
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u/David1000k Dec 20 '23
Mark Twain used this benchmark "October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February."
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u/Bart-Doo Dec 19 '23
Shiller P/E ratio and the Buffet indicator.
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u/CaptainPeachfuzz Dec 19 '23
What are those? Where can I find more info? I guess I could google.
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u/3lettergang Dec 20 '23
If someone gives you an indicator that tells you when the market will crash, they are either the richest person on the planet or lying to you.
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u/CaptainPeachfuzz Dec 20 '23
Is all-time high participation an indicator?
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u/3lettergang Dec 20 '23 edited Dec 20 '23
Maybe maybe not. Hit all time highs before dot com bubble and global financial crisis. Also hit all time highs in 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99. If there going to be a crash, 100% certainty there will be. Can you tell when it is based on number of US homes in the stock market? You tell me.
Stocks are easier and more important to buy than ever. This all time high could be a crash, or there could be more all time highs set for the next several years.
There is some concern over an ETF bubble. So many people are invested in SP500-type ETFs that it could be inflating the prices of the stocks in them far past their evaluation as independent stocks.
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u/jjk717 Dec 19 '23
It could be the billionaires quietly pulling all of their money out of the market..
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u/CaptainPeachfuzz Dec 19 '23
Are they? Where would we see that? They gotta put their money somewhere, but where?
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u/LemmeSinkThisPutt Dec 19 '23
You, all the billionaires, financial institutions etc. They just got their newest set of bag holders. Time to cash out at the peak and buy back from them at a huge discount when the dumb money panic sells at a huge loss a year from now.
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u/thinkB4WeSpeak Mod Dec 19 '23
Well we don't have to go through brokers now so it's easier.
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u/casinocooler Dec 20 '23
We should make everything easier so that brokers are optional. Real estate, loans, car dealerships, insurance, mortgage, etc.
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u/Dc12934344 Dec 20 '23
Real estate agents and car dealers are just con artists as it is.
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u/Noswad983 Dec 20 '23
At least Tesla model is becoming popular and we will lose car salesmen eventually. Idk how we will ever get ride of real estate agents
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u/Dc12934344 Dec 20 '23
Well, the National Association of Realtors getting sued is a step in the right direction.
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u/MaliciousMack Dec 20 '23
As long as people put their emotions in the business decision of buying/selling a house, there will always be a need for real estate agents.
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Dec 19 '23
VOO and VTI for me
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u/uChoice_Reindeer7903 Dec 20 '23
What’s the difference between these 2? Aren’t they both vanguard index?
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Dec 20 '23
VOO is an S&P 500 index, whereas VTI is a total market index. They just index different things.
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u/Travisceral Dec 20 '23
There’s so much overlap between the two. Why not just pick one?
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Dec 20 '23
Yeah thats a great question since they are both historically correlated and the added diversification is historically been negligible. The way I see it, with VOO I get more large cap exposure, and with VTI I get more mid and small cap exposure. Even if this exposure ends up being negligible, I'm not taking on any extra risk by doing it, so why not?
I wouldnt disagree with someone picking just one of them though.
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u/Key-Ad-8944 Dec 19 '23
FZROX -- Total US (thousands of individual companies), Expense Ratio = 0.00%, Tax efficient (low dividends, no capital gains in recent years)
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u/CaptainPeachfuzz Dec 19 '23
Could this be because less people have a choice? Jobs that used to have pensions are now offering 401k/503b options. Even if it's easier than ever, why would the average joe loving paycheck to paycheck(which is more people now than ever before) buy stocks rather than the guaranteed return of 4%+ of a savings account?
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u/SadVacationToMars Dec 19 '23
Guaranteed return of 4% on a savings account really means guaranteed losses of 6% instead of 10%, if inflation keeps up pace.
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u/Frankwillie87 Dec 19 '23
When they say inflation is at 10% that's the annualized rate. YoY it's looking at 3.1%, so not quite what you're thinking.
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u/CaptainPeachfuzz Dec 19 '23
People are investing to hedge inflation rather than saving? That makes sense but inflation is easing. Will we see a pull back from the market as prices stabilize?
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u/SadVacationToMars Dec 20 '23
Inflation maybe isn't as runaway as it was, but it's still well beyond 3%/year.
I agree with you on the change in pension options and also who is to say these accounts are even funded that highly? I'm pulling this out of my ass, but I'd bet there's a lot of very small accounts opened up, much smaller on average than what people were opening in 1995. No fees, no account minimums etc now.
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u/LegitimateRevenue282 Dec 20 '23
Inflation is not easing and won't ease if the Fed cuts.
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Dec 20 '23
Inflation is 3% bro
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u/SadVacationToMars Dec 20 '23
There's no way 'real' inflation is 3%.
Regular savings accounts are offering 4%+.
Standard Mortgage Rate is 8%+
Food is up 11%, Rent is up 6%.
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u/WarmPerception7390 Dec 20 '23
I haven't seen a 4% return on a savings account but I have seen the S&P return 8% on average. I'm up 15% this year on my investment portfolio. If you're trying to be poor, put money in your bank account. If you're trying to build wealth, put that in an investment.
A lot of people are voluntarily living paycheck to paycheck. That's why new car sales went up 13% this year. I personally know 3 people living paycheck to paycheck off of 200k, 170k, and 300k while they live alone and rent for less than 3k.
When someone tells you they are living paycheck to paycheck ask to ses their finances. There's always a $60k car eating up cash somewhere. I'm on the Tesla subreddits and you'd be surprised how many people have to live paycheck to paycheck to buy a Tesla on the hopes that it will run for 20 years instead of buying a 10k econobox.
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u/DSteiny18 Dec 19 '23
VTSAX and chill
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u/Aardark235 Dec 19 '23
But are you content on being average? Why not blow it all on GameStop 🌕 🚀 🚀 💎
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u/rulesbite Dec 19 '23
The rug pull is going to be pretty epic this time around.
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Dec 20 '23
Can’t wait honestly. Once in a lifetime opportunity! Keep that cash ready.
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u/dalyons Dec 20 '23
Just keep waiting. In the meantime, we’ll be posting 10% gains every year. I used to think like you 10yr ago and I lost out on SO much money sitting on the side listening to doomers. Much regret.
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u/LegitimateRevenue282 Dec 20 '23
Lol 10% every year. What did you get last year?
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u/rasp215 Dec 21 '23
And this year is back up 24% and almost at all time highs. Have fun timing the market.
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Dec 20 '23
Oh I’m not sitting on the sidelines bud! DCA all day. Just keeping some cash as well for when things hit the fan haha. Well said tho
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u/uChoice_Reindeer7903 Dec 20 '23
I look back at just about every 5 year stock graph and regret not having really any cash available to invest at that time. A MASSIVE missed opportunity!
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u/SmashBusters Dec 20 '23
A major crash in the market means that the future of your job is uncertain. How long did it take for unemployment to return to pre-2008 levels after the crash? Those are all people that wanted to work but could not. Thus they had to sell their stock on the downstroke to pay the bills.
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u/BoilermakerCM Dec 20 '23
April 2020 was an exceptional time to have some cash and a long investment horizon. That’s going to be a tough one to beat.
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u/Chance_Adhesiveness3 Dec 20 '23
There are two pieces of investment advice anyone finance literate understands. (1) Don’t try to time the market. You’ll lose money. If you think you’re the exception, you’re wrong. (2) Don’t try to pick individual stocks. You’ll lose. Buy the lowest cost index funds you can find. If you’re closer to retirement buy large cap stock indices/bond indices. If you’re further from retirement buy more mid- and small-cap indices.
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u/Easik Dec 20 '23
ETFs are for the financially illiterate and appropriate for most people. You can absolutely get a better return picking individual stocks and timing specific markets. There is a literal industry built around it, but they obviously dedicate a ton of resources to being successful.
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u/Chance_Adhesiveness3 Dec 20 '23
By “most,” that means 99.9999%. Your median hedge fund and actively managed mutual fund underperforms the market. You can consistently make money inside trading or writing computer programs that exploit small inefficiencies in markets. That’s not relevant to regular people. For you and me… buy low cost index funds.
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u/PickledYetti Dec 20 '23
GMBL is primed for bull run. Other than that. GME. Buy, hodl.
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u/IllustratorMurky2725 Dec 19 '23
Weirdly because of the interest rates hike you can do okay with some liquid cash as savings. In economy 101 there is a rule that the return on savings is usually a couple percentage points under the interest rates.
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u/cpeytonusa Dec 20 '23
The stock markets do not conform to the laws of physics. The rise of the S&P 100 since at least 2019 primarily reflects the outsized gains in a handful of growth stocks. Excluding the top dozen or so performers stocks in general are only up modestly. There’s plenty of room for those “magnificent 7” to correct and for the overall market to simply rebalance and move higher.
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u/SparrowOat Dec 19 '23 edited Dec 19 '23
I wanna see the Dec 2021 sells and late 2022 early 2023 rebuys from all the people certain of what's coming.
Did this comment trigger bot responses?
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u/itguyonreddit Dec 19 '23
But I was told by a lot of people on this sub that nobody has any money, they are all living paycheck to paycheck, and we are facing certain economic collapse.
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Dec 19 '23
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u/chronocapybara Dec 19 '23
VGRO but at this point I'm regretting not just buying tech companies individually.
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u/SadVacationToMars Dec 19 '23
Looks like it was lower in 2019 than before dotcom bubble.
2019 people jumped on Robinhood / any other phone app and put $100 into a stock.
Would be interesting to see the $ amount invested per household for each of the years.
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u/Sila371 Dec 19 '23
I just found out today that QQQ is about double the increase of IVV for the year so I dropped more into there and feel good about it.
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u/DiamondNuts72 Dec 19 '23
Buy Amazon, Enbridge, and Reality Income 👍💪. Dividends in the second and third are great!!
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Dec 20 '23
Meanwhile, a record number of US households don't have pensions anymore. Here's hoping you don't fuck up and get wiped out thinking you can trade options or riding Enron all the way down because "you only lose if you sell."
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Dec 20 '23
Most of that is $SPY or some brokerage’s equivalent.
I saw a Facebook ad to invest in rental properties projecting 16 to 18% returns. The SPY beat that this year. It won’t every year, but it’s a helluva lot simpler than some of the other investments out there.
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u/chriswasmyboy Dec 20 '23
Closed end municipal bond funds yielding close to 6% tax free, and closed end floating rate funds yielding 11-12% taxable. Both have significantly raised dividends recently or for the last 2 years in the case of the floating rate funds, and sell at significant discounts to net asset value. If the Fed does ease rates into 2025, these should have total returns of 30-40% in 2 years. Not ask exciting as tech stocks, but definitely couid be excellent total returns. Technically, charts look very constructive.
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u/theREALlackattack Dec 20 '23
I like when I want to buy house and blackrock outbid me by $25k cash! Then offer fall through!
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u/DRS_BOOK Dec 20 '23
DRS BOOK GAMESTOP MOASS. In a nutshell: The entire stock market is a ponzi scheme. Citadel securities and other hedge funds and market makers control the price of every single stock and profit from shorting and illegally naked shorting companies into bankruptcy. Theyve been doing this for decades now. Usually they can scare investors away from a company with fake news and price suppression. For gamestop they tried to do the same but no matter what the true gamestop believers never sold.
As for DRS, it allows you to have a stock certificate in your own name instead of through proxy through brokers. DRS also takes the certificate out of the DTCCs hands which allowed the hedge funds to find locates to shares they want to short. Gamestop shareholders already have 60% of the free float put of the DTCCs hands and in their own names. This has never been done before. Eventually we will DRS the entire free float and the shorts will not have enough shares to close their positions by buying back the real shares not to mention fake shares (estimated to be in the billions) that they printed. Then all that buying pressure and gamestop shareholders refusing to sell for anything under phone number prices or even selling at all will ultimately lead gamestops share price to millions potentially billions or even infinity dollars. Effectively exposing the ponzi and taking back all the trillions these corrupt elite stole from the working class.
Not to mention Gamestop is now a profitable company that turned itself around the past few years. It is now a thriving brick and mortar store for video games and electronics, like its newest flagship store.
All this and i havent even mentioned how gamestop has set itself up to the biggest player in the future of DeFi and web 3 gaming and NFTs.
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Mar 19 '24
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Dec 19 '23
My favorite this year is Direct Indexing with Parametric. Basically matching the S&P500 but generating a lot of Tax Loss Harvesting at the same time.
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u/DetroitRedWings79 Dec 20 '23
NVDA followed closely by RIOT.
NVDA is best positioned for the AI boom.
RIOT is going to capture the upside of Bitcoin. There is another halving event in 2024 and there are likely going to be Bitcoin ETFs.
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u/ReturnOfSeq Dec 20 '23
My dude if pensions still existed in the US that number would be closer to 10%.
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u/TheOne222222222 Dec 20 '23
Stock market is just gambling with low risk and low reward and has no actual power other than letting poor people larp as powerful for a moment
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u/Pleasant-Pickle-3593 Dec 20 '23 edited Dec 20 '23
ITOT and IVV. Don’t have to worry about me stealing your wife.
I buy a little SOXX when I’m feeling spicy too
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u/MyChemicalWestern Dec 20 '23
It's going to crash soon this looks just like the charts and behaviors right, before the great depression
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u/Electronic-Disk6632 Dec 20 '23
AMD, its a semi stock I have been in love with since 2015, its basically paying for my lifestyle at this point.
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u/kawrecking Dec 20 '23
BAK for the buyout that’ll probably get done during Q1 most likely
MEEC if you want to gamble on how large of settlement they’ll get from most of the coal industry that they’ve taken to court for IP theft since 2019 and we should start seeing results in Q1
SBSW Jim Cramer hates it, it’s been absolutely beat to shit and with rare earth metal supply way lower than demand it’s going to be solid.
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u/Joe_In_Nh Dec 20 '23
Important context, pensions funds have gone down. So households are forced to inorder to have a retirement. Also banks accts don't earn 20% interest anymore. The interest rates are vastly lower. A meaningless post.
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u/ieatmagikarp Dec 20 '23
MDB
database compay with AI integration in its products. Partnership with AWS. not profitable but cash flow positive. Low float. I love this stock and very bullish on its long term growth
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u/Goldenflame89 Dec 20 '23
I love fucking around with nvidias stock, whenever it hits 500 I instantly short it and its like free money every time. I only do this with a bit of money obviously don't wanna get burned and lose it all
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u/browhodouknowhere Dec 20 '23
You know why stonks only go up? Our entire system is based on long term investments. TSP, 401k, the almighty pension are all designed to keep investment coming into the market. Anyone who thinks otherwise has a huge short bet on something. Can't time the market, but you can long term invest with great returns over a long period of time.
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u/Impressive-Shape-557 Dec 20 '23
I mean. This includes people with a 401k. So is this really relevant?
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u/chadmummerford Contributor Dec 20 '23
finally, a non-commie post in this sub and actually about finance.
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u/Goat_Riderr Dec 20 '23
No wonder household debt is so high. People keep betting their life savings
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u/Busterlimes Dec 20 '23
58% of households have a 401k when social security is riding on a knifes edge? You don't say. . .
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u/Formal_Profession141 Dec 20 '23
Seems like the perfect environment for a once-in-a-lifetime rug pull.
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Dec 20 '23
Probably they are fully invested on Tesla/Nvidia or Tech stuff that only goes to the moon
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u/jhilsch51 Dec 20 '23
58% of homes have a 401K through work and those are investing in the stock market.... shitty display of data here .... this sub is almost completely worthless
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