My longterm portfolio is down 36.36%

Discussion in 'Trading' started by noob_trad3r, Dec 30, 2008.

  1. Is that bad? how does that compare to mutual funds or hedge funds etc. I mainly have stocks I just buy and hold.

    I mainly just buy stocks that pay the dividends and then reinvest the dividends automatically via Etrades DRIP option.

    I just started my portfolio about 12 months ago. Talk about bad timing. down 36.36% in 1 year (12 months)

    My window is 30 years.
     
  2. If it's an all-stock portfolio, then that's not too bad - no worse than the market.

    If your time horizon is 30 years then your timing is superb. People with 30 more years of income to invest should be praying for the stock market to fall 90% over the next 12 months.
     
  3. Its only stocks I have no bonds because I do not understand bonds or how you price them, coupons etc.. and the Etrade bonddesk is confusing.
     
  4. kxvid

    kxvid

    You did a little better than the average etrade customer who is down 42%.
    As far as your 30 year time horizon: Don't believe the garbage about how the stock market is the best place to put your money if you have a long time horizon. There is still huge money to be made, but the average person's portfolio won't benefit.
    Stacking your portfolio with blue chips and holding long term like the average person is a bad idea. You need to buy stocks of excellent undervalued companies. For example AKS would be an excellent long term buy at $5.
    edit: also dump etrade
     
  5. If you are passively investing then the best you can do is to benchmark against the relative performance of the S&P500 or whatever you are investing in. So if you are investing in tech stocks then benchmark against that sector so you can measure apples vs apples.

    However if you are actively managing your own portfolio then you need positive return on investment every year. If you are a fund manager that gambles other people's money then all you need is bigger assets under management to collect the fees.
     
  6. Well, it's a shame you didn't start now, but what are you gonna do?

    Buy hey, some stocks do go to zero, do you keep a watch on the fundamentals? It's times like these when the weak ones do die, and the strong companies become good buys.

    I talk like a seasoned pro but really I'm just a newbie trader as well.

    I know of a few investor web sites: zacks.com, morningstar.com, but I don't really visit them much as I'm a short term trader. I personally think the down days are over, and now is the time for a longer term investor to start adding to their positions.

    Hey, what companies are you in, if you don't mind me asking?

    Next time we experience a bear market, you might want to look at some hedging oppurtunities, save your self some pain.

    You can check out proshares.com, for ETFs that increase when the market goes down.

    You can also purchase options to protect your downside, but these take a bigger commitment to time spend learning about them than you may want to spend, but if you do: 888options.com is the options clearing council website.

    You know a few ETF, and some options and you could still hold your positions but be at 0 right now or even some profit.

    Just something to look into. I know even Buffett is using options now.
     
  7. Imba

    Imba



    If yout time window is 30 years....

    i think the only one thing which can clear your whole portfolio to ashes is a World War III.

    Otherwise, all i can reccoment is to re-invest a little more money in stock in the end of 2009.

    And enjoy life.


    20 years after today..... some indexes and stocks may be +100000 %% (-USD inflation).


    So, i guess there is not much you have to worry about.... since it only 1/30 time pasts...
     
  8. You did a good thing 12 months ago but now you ask the wrong question. You shouldn't compare your portfolio return with the average investor return every year because your horizon is 30 years, not one year. You should look at your portfolio return vs the average return people made on their savings only after 30 years. That's the whole point. During that time people will jump in and out of the market AT EXACTLY THE WRONG TIME, and incur a lot of commission, trading or management costs, and you are virtually guaranteed to beat the "average". Meanwhile you should periodically, when you have money available, buy more stocks (or better yet, an ETF). And here is the catch - you should do this regularly and very disciplined - this will help you buy during moments of crisis (like now) where people get scared of stocks and sell them at bargain prices. But if you miss those wonderful and rare moments of extreme pessimism, and only buy when the sky is clear and everyone is positive, you will most likely underperform and you strategy will not work. And finally, and even most importantly, YOU SHOULD NEVER SELL until that 30 year period is over. The stock is a share of a company that makes money - if you sell it, you are no longer an owner of a business that makes you money, you only have cash that loses purchasing power over time.

    Also, I think it might be a good idea to read some books about passive investing, so that you understand the difficulties of the process. There are only a couple of good books out there that will tell you everything you need to know.
     
  9. Thanks for the feedback, I am passivly investing not churning etc.. Well I am down 34.29% for 2008 so lets see what 2009 brings.

    My goal is to retire and just live off the dividends without having to sell stocks. Is this a possibility? My portfolio is all dividend stocks.
     
  10. sumosam

    sumosam

    NOOB,

    You are dreaming...the bear market is not over. Study market history. Learn technical analysis.

    Many stocks have stopped paying dividends. Interest rates are at an all time long...there is a 27 year cycle in interest rates....I was planning on waiting til prefereds where low, then buylng them and living off dividends....not now.

    Get some education. You will pay either way...and don't feel bad about the money. At least you are asking questions, which is the beginning of knowledge.

    The stock market dropped 89% in the great depression...it took stocks decades to recover. Learn about inverse funds.
     
    #10     Dec 31, 2008