Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

I am not able to buy right now or for the next year or so due to some personal expenses (other than reinvesting dividends), and that couldn't have happened at a better time. I am hoping for a huge correction at about this time next year when I am able to start adding money. Everything is pretty expensive right now.

 

FWIW I only made 44% because of UWT (3x leveraged oil) and a lot of averaging down before I capitalized on the iran drone strike issue in Saudi Arabia, but now I'm in Zillow and Redfin with $28 in CHK lol, I'm not sure which way oil or natural gas is going to go so I'm staying out of those right now

 

I'm not, but I'm just gonna keep calm and dollar cost average!

 

That is awesome, almost double the market return! When I look at what is up and down in my portfolio, I have come to the conclusion that it's so random over the short term that I'm not willing to make big bets (in TGT I am up like 78%, in F I am down 15%, could never have seen either of those coming).

 

Yeah, the only reason I jumped into oil is because it has gotten so hammered in late 2018. I bought and pretty much lost 20% right off the bat, so I just kept buying more. Finally I got a decent break and got out just recently. I would love to do the same for natgas, but there is just too much of it right now, and it will take some real shakeups to make it go up.. too risky for me at the moment. For oil it was a no brainer, it always seems really cyclical and I don't have to worry about oil going to $0

 

I would like to add to CVX and XOM right now, but trying very hard not to go against my strategy of an equal weighted portfolio with sector balance. It's tough, I think oil will do well going forward because it's so beat down right now. I'm up on CVX but way down on XOM.

How are you making your oil bets?

 

Generally with oil there's always the potential for geopolitical issues to make it go up in price. Beyond that, it would take a bunch of rig counts going down, a few drilling companies going bankrupt, and the supply to get drawn down, but nothing like that is really going on at the moment, at least not much. We are in a no man's land right now with oil prices and I'm not willing to jump in.

 

How do you invest in it though? Just buy and hold long, or options, etc?

 

I usually just stick with UWT or DWT (which is the inverse of UWT) and go from there, I just try to swing trade whenever there is an oversold or overbought scenario. But that opportunity might not present itself for years. I keep an eye on WTI oil prices which basically never stop trading so I can see what the price is doing late at night lol, kinda like bitcoin I guess.

 

Sounds like a lot of work (and some luck), but a 44% gain can't be wrong.

 

Yeah, it's really a matter of knowing how cyclical the price of oil is, and seeing where the price is at. Generally a good indicator is when gas prices start getting to the very low 2s or even 1s, that's when I start watching oil prices, same with if it ever gets high (which it hasn't really in a while). Right now WTI oil is just sort of bouncing around between $54 and $58 a barrel and has been trending upwards ever so slightly since July (with the exception of the nutty trading that was going on after the Iran drone strike which is where I sold), so lately it's just not the right conditions for me to mark it as an opportunity to jump in.

I like trading oil/natgas because there's always a bunch of data coming out all the time, and geopolitical events can change the price of oil. I get nervous with companies because a stock seemingly goes up or down at random, sometimes by a lot, it's difficult to stomach when you can't really find answers haha

 

If it's in a trading range for a long time (say $54 to $58), and you just kept buying around $54 and selling around $58, do you think your returns would exceed the market returns? Or in other words, would it be worth the time it takes it to do that (especially with free trades now)? I am always looking for something a little more engaging than buying and holding big companies for the rest of my life, especially if it can produce better returns.

 

It's a tough one, I think the swings at such a small level are way more nuanced and it's hard to really "predict" what it'll do as much as when it completely skyrockets or completely gets hammered.



You can see from this daily candle chart that I had to hold for almost a year to lock in any gains (this is just WTI and not the 3x leveraged stock so it only shows 20% gain on this chart), and it was a stomach churning moment when I was down nearly 50% by the end of 2019 lol. I just kept averaging down until it worked out. It was a long ride, but kinda nerve wracking. It looks to me like oil is in a no man's land, so I'm not really sure which way it'll go. Btw I drew that "pitchfork" in september and it's quite odd that the trading activity is actually staying inside of it perfectly haha. I'd be really interested to see what happens if it falls outside of the lower blue region for more than a day.

 

like look how dead on it still is lol. I would buy DWT today and sell tomorrow if I really felt like I wanted to do that, but I'm not a huge fan of super short term plays.

 

Just curious do you have a margin acct or are you able to day trade on your brokerage acct?

 

I don't use margin. Bad road to go down IMO

 

what are everyone's thoughts on the market outlook? think we'll see something similar to last years meltdown around Christmas time? china-us trade news changes daily, market seems to be slowing but still cruising on the bull run. Got a stockpile of cash that I'm hoping to use in the event of a correction but cant tell if that'll happen anytime soon or not. Also trying to avoid the FOMO and just throwing money into the market.

 

You could always average it into the market. Maybe split the total by 12, and put some in each month. I am a firm believer that nobody can time the market, and getting money to work as soon as possible is the best way to go. You might be waiting a decade for a correction. Or a month. But there's just no way to know.

 

yeah, I agree with this. No telling. Also, just look at a few examples of dollar cost averaging during the financial crisis. It barely looks like a speed bump for those that still had a long way to go before retiring. If you are older, then sure, go risk-off, but if not, just dollar cost average.

 

Schwab bought TD Ameritrade @memario1214