Stocks - The Best Buys 2

[Table 5]

Perhaps they were talking about Inverse ETFs?

[bizaro86]

Originally Posted by bluejays

Wow. Huge and well appreciated explanation! Explains it perfectly. Some of which I should know but got muddled somewhere over time. I vaguely remember someone on here saying ETFs diminish over time so it’s of lesser benefit to hold them over the long term? Any recollection of what that may mean?

There are leveraged ETFs that use derivatives to magnify the daily return on an index (often marketed as 3x bull or 3x bear sort of thing). However, because of path dependence and the fact that they rebalance daily, they have a natural decay over time.

These products are not investments in any traditional sense, they are designed for magnification of very short term moves. If you had a strong sense of what the Fed was going to say and wanted to invest gamble on a short term move they are fine, but they are absolutely inappropriate for a holding period longer than a couple of days.

That is a small subset of ETFs though. Your normal index ETFs are great, have very low fees, and don't have any path dependence because they don't rebalance with any meaningful frequency.

[V]

There is slippage in leveraged ETFs. Those are meant for short term trading, and not necessarily buy and hold.

[Table 5]

Originally Posted by bizaro86

These products are not investments in any traditional sense, they are designed for magnification of very short term moves. If you had a strong sense of what the Fed was going to say and wanted to invest gamble on a short term move they are fine, but they are absolutely inappropriate for a holding period longer than a couple of days.

I always hear this, and yet in practice, my biggest personal gains have been from holding leveraged ETFs (FAS, TQQQ, ERX, etc.) for months at a time. Obviously there is a higher risk (because when these fall, they fall hard) but if I am confident in the big-picture trend (ie. a recovery from the Covid crash, or Oil prices going below zero) I have no problem buying these for longer periods. I've never done this for inverse ETFs though, as those never seem to work as well.

[V]

Inverse ETF's just don't have the math behind them, and when you combine the slippage, they aren't effective for longer than a trend. But yeah, when the market crashes hard, a long term hold of a leveraged long ETF is a no-brainer.

[zamler]

Apple is the best performing big tech stock of the year.

[Sidney Crosby's Hat]

Originally Posted by zamler

Apple is the best performing big tech stock of the year.

Wow, really? So all other big tech stocks were worse than a 25% loss?

[Samonadreau]

Originally Posted by Sidney Crosby's Hat

Wow, really? So all other big tech stocks were worse than a 25% loss?

YTD so far

Apple -25.5%
Microsoft -23.5%

If you include dividends (current)

Apple 0.7%
Microsft 1.12%

Haven't check any others but with a week left in 2022 Microsoft better (less bad) than Apple.

[Slava]

Originally Posted by Samonadreau

YTD so far

Apple -25.5%
Microsoft -23.5%

If you include dividends (current)

Apple 0.7%
Microsft 1.12%

Haven't check any others but with a week left in 2022 Microsoft better (less bad) than Apple.

Does that checkout? Like the dividend on Apple or Amazon isn’t anywhere near 20%, so I’m not sure I see how including the dividend is bridging that gap? What am I missing?

Like the annual dividend for Microsoft is $2.48 and today they were down by over $6. Curious to know how you got there.

[opendoor]

Those are just the current dividend yields for each stock, so you'd add them to the capital return to get the total return.

[Slava]

Originally Posted by opendoor

Those are just the current dividend yields for each stock, so you'd add them to the capital return to get the total return.

Oh man, long day. I thought he was saying with the dividends the return was positive!

[Samonadreau]

Originally Posted by Slava

Oh man, long day. I thought he was saying with the dividends the return was positive!

Must have been a really long day.

[bizaro86]

Originally Posted by Table 5

I always hear this, and yet in practice, my biggest personal gains have been from holding leveraged ETFs (FAS, TQQQ, ERX, etc.) for months at a time. Obviously there is a higher risk (because when these fall, they fall hard) but if I am confident in the big-picture trend (ie. a recovery from the Covid crash, or Oil prices going below zero) I have no problem buying these for longer periods. I've never done this for inverse ETFs though, as those never seem to work as well.

I mean, if you catch a one-way every day type move, they'll work out. If that's what you think is going to happen though I'd put in less money and buy out of the money options on a regular ETF. Much greater upside per dollar invested, and if you invest a smaller amount the downside in dollars is likely less for similar or greater total upside potential.

[shermanator]

Pretty happy with my decision to sell TSLA and put it into TOU back in February.

[Johnny199r]

Reminder: Additional $6,500 contribution room in your TFSA as of midnight tonight.

[Strange Brew]

Quite a good day today.

[Table 5]

So what's everyone's strategy going into 2023?

Personally, Oil/Coal more than saved my butt in 2022, and I'm still fairly heavily weighted going into 2023 (mostly offshore/services these days). Global recession will continue to be a headwind for sure, but the China reopening should help counteract that somewhat. Bigger picture though, the long-term supply/exploration issues haven't been addressed, so I'll be in it till they are. If we get an end to the Ukraine war, I imagine that will pose a good buy opportunity.

I'm also dipping my toe into Bonds (TLT/TMF) and Biotech (XBI/LABU). Gold/Silver seems to be making a surge lately, but I've been faked out before so not getting too excited. Otherwise playing it pretty conservative and trying to find some steady-eddie dividend plays in non-energy sectors (since I have so much invested there already). I'm also continuing to increase exposure in South America and Turkey.

Still mostly staying away from Tech, and I think will be a while yet till that sector bottoms. Fed pivot will probably give it a short-term boost, but then I think it'll keep sliding back.

[Johnny199r]

Index ETFS. XIU, VFV etc

Track the indexes, be boring, make money.

[GGG]

Originally Posted by Johnny199r

Index ETFS. XIU, VFV etc

Track the indexes, be boring, make money.

Me too, I’m not smarter then the market.

[Izzle]

For my risk profile... Veqt all the way.

Till I'm closer to retirement, then will pivot to vgro or vbal.