Stock Market

LaRea

What does your crystal ball say about mortgage rates?  Cheap mortgages are driving an absolute market frenzy here.  I know this because I just received my tax assessment.  It went up 15%, which means my tax (which was already ridiculous) is going up 15%.  

Willhound

@LaRea is it that literal? We've had a hot market in our area for years. My value has doubled in 10 years. But the assessed value for taxes is based on a rolling average over several years and also lags a bit. So a 10% increase in value in any given one year period does not affect property tax immediately.  This is necessary so homeowners don't get whacked all at once and so governments can budget without being whacked in the event of a sudden downturn.

Aqua_Aura

I think it depends on the state as to how they handle the assessment and taxes. We have a cap where we are for the annual increase and I think California where prices went thru the roof changed the law as well since some people couldn't even afford to live in their houses anymore even though they were paid off, the tax bill just got too high. 

Virginia is actually lower than Washington and California

LaRea

Yes, it's immediate and not a rolling average.  My home tax this year will go up 15%.  Sure, it's expensive, and I'll pay it because I love living here.  But sooner or later, they'll have to ease off on the low mortgage rates ... right?  

Aqua_Aura

Mortgage rates in my opinion will go up, the Fed Reserve should not continue to leave them at ZERO. Yes if they go up the stock market will go down and housing will go down but they have both been going up too much simply due to the unsustainable low rates. Money is too cheap right now and it is causing bubbles in the markets.

Dream_Inn

Wow, that is crazy that your tax went up 15% immediately.  I've never payed taxes on my full house value.  For the first 3 years, the previous owner had fought the increase and passed on the savings to me.   I've lived in the house since 1997 and the MD homestead tax credit limits the amount it can go up each year.  I'm currently paying under 70% of the taxes because of it.  I think over the years I've probably saved almost 50% of what I paid on my house because of that credit.  It is really ridiculous, but I love it!!  If I moved out of my house and back into it immediately I'd have to pay the full amount.

Aqua, I agree that the rates need to go up.  They have been down entirely too long.

Handymans342

My tax is $1100. Move to Florida

LaRea

My tax will be $1200 a month, and that's just the house.  Eff you and all other Floridians.     I'm just lucky we don't have boat tax here.  

Handymans342

You have Personal Property Tax

randy56

@LaRea Is the assessed value in line ? if not you can protest it. cannot do much about tax rate, That's a strong Moly tax pmt. Mortgage rate's will rise, as gasoline. if you live in a flood area FEMA has there hand out , Huge increase across the country. People will have to sell, because they cannot afford Flood Ins. It will be more that there house pmt.

LaRea

Fairfax County has personal property tax on cars, but not boats.  That's one reason I can stimulate the local economy by owning a 40-foot boat.

@randy56 the assessment is at least $100k below market value.  EDIT:  In this market, the house is a 10.  Meaning, 10 is the number of minutes needed to sell it if I decided to get out of the rat race.  

FEMA:  I live close to the Potomac.  Part of my yard is in the 100-year flood plane, but the dwelling is not.  FEMA flood insurance is available to me so I buy it ($800/year).  It's not mandatory.  

randy56

@LaRea Thanks for stimulating the economy. I have flood ins also. only $426 per year. Looks like I'll be self insured soon.

@Handymans342 I agree with your statement. Pay attention to rising bond prices which is no good for stocks and signals inflation ahead and no wonder with 30 trillion in debt!!!!! I'll add the printing press is getting ready to print more $ 

Handymans342

I see higher rates ahead which is good for savings but bad for debt and we will approach 50 trillion in debt 

Aqua_Aura

RKT just announced a special dividend of $1.11 per share. That was a nice surprise considering they just went public in August 2020. 

J3ff

Sold a bit of GME today, up in the 100's so far. Waiting for it to drop back down to double down!! Still have 4 shares at 40 each...hoping to make it 8 on Monday morning.  cmon GME need a new boat!!

RiverRat232

LaRea said:

Fairfax County has personal property tax on cars, but not boats.  That's one reason I can stimulate the local economy by owning a 40-foot boat.

@randy56 the assessment is at least $100k below market value.  EDIT:  In this market, the house is a 10.  Meaning, 10 is the number of minutes needed to sell it if I decided to get out of the rat race.  

FEMA:  I live close to the Potomac.  Part of my yard is in the 100-year flood plane, but the dwelling is not.  FEMA flood insurance is available to me so I buy it ($800/year).  It's not mandatory.  

Living in the DC area is about as close to recession proof as you can get. My new neighbors work for a defense contractor and were transferred from the DC area to Wright Patterson AFB which is 25 minutes from my area. They made enough on the sale of their old home to pay cash for the new house.

Willhound

I've been staying low profile on this topic even though it interests me immensely. Mostly for entertainment value. I don't bring it up a lot but I was a fully licensed Investment Broker with Edward Jones for several years. Stocks, Bonds, Mutual's and even insurance. The company is just about the largest privately held investment firm in North America, owned entirely by the employees. Maybe one of the largest in the world, and consistently ends up at the top of the rankings for investor satisfaction. Although successful and making a very respectable living (even throughout the market downturn of the late 2000's) I decided to make a lifestyle change in 2014 and left the firm for family and health reasons. The long hours and constant stress were killing me. If you think day trading is stressful, imagine worrying about a $60 Million dollar plus portfolio with almost 1600 clients.
One of the main reasons I don't bring it up is that the very first words out of everyone's mouth is "What should I buy? What will make me the most money? How can I double my money fast?, What investment is guaranteed?"
The truth is, there is no answer for any of those questions and if any broker says they can give you an answer, RUN. 
But here's my contribution to the thread.
The majority of the stocks you guys are throwing around are highly speculative and in fact as a broker we would not have even been allowed to handle a transaction for. We had (still have) a fairly extensive list of approved investments that an entire army of people much smarter than me constantly evaluate and watch. If a company or fund gets shaky, other than an expected bump, it is dropped. It takes a lot of good solid history to make the list. This is why they consistently rank at the top of the heap. It's a boring, methodical approach that lets everyone sleep at night but also ensures excellent long term growth. If you think this post is long and boring, stay to the end and it might surprise you. Dream Inn said it best when he stated " It did hurt a little seeing some of what I have in stocks go down, but the ones that have great dividends all seemed to be immune to the correction, not sure why."
It's because strong companies with long term track records of paying consistent dividends do not lose. And those dividends allow what we called "DRIPS" or dividend re-investment programs where those constant dividends fill up the investment "bucket". With these programs it is possible for your broker to purchase fractions of a stock rather than having to lay out a chunk of cash every time you want to buy something. Most firms do not have this program because the brokers are not paid any commission on the DRIP.
As an investor they are golden. No cheque to write, no worries, just watch the growth. 
My entire portfolio consists of blue chip consumer disposables like Johnson and Johnson, Proctor and Gamble, some pharmacies, grocery chains and utilities. It has almost tripled over a 15 year time frame. Boring? Yes. There is an investment strategy called the "Rule of 72" that is simply taking the number 72 and dividing by a rate of return. The result is the number of years to double an investment. My moderate growth, but boring portfolio has averaged almost 12% so doubles every 6 years. My modest $180,000 invested about 15 years ago from cashing out a company pension is on track to hit $1.7 Mill when I plan on retiring in a few more years. I have not contributed another penny out of my pocket. If I wait another 5 years it almost doubles again to just over $3 Million. Magic. That's the end of my investment advice.
If you have the time, money and can handle the stress and potential loss, then by all means go ahead and day trade. But remember that for everyone that is successful at it, there are hundreds that are not.

Aqua_Aura

@Willhound I could not agree with your statement more. I like the get rich slowly, DRIP, and in it for the long term. 

These "small" percentages people may look down upon add up very quickly given enough time. I think it's ok to play around with some stocks to see what happens however that better not be more than 5-10 percent of your portfolio. I always use the example of The Oracle of Omaha and the big dividend payout they get from KO. Those small percentages are not so small when they have been in DRIP and the dividends are consistently rising. 

Dream_Inn

Willhound, thanks so much for you insight in the finance world.  I do agree with you about the long term investing in the "boring" DRIP companies with higher dividends.  It is why I am invested in them.  I'm actually glad you took my comment and went into it more.  It shows the big boring dividend companies are more tolerate.  I also have all of my 401k and my wife's 403a/b and all of our Roth IRAs & 529s in mutual funds (low expense ones) and boring stuff.  But, it has done extremely well over the long duration.  I've got that base covered with 27+ years of maxing out retirement plans.  I'm also glad I've been able to have both our plans in ROTH 401/403 for quite a while now.  Heck, mine even just opened up being able to do in plan conversion to ROTH.  (so I can max out after tax and automatically convert immediately into 401k ROTH).

But, I'm finally at the point where financially, I have some money I can actually play a little in the stock market.  I've been dabbing here and there and it's been fun.  Trying to learn as much as I can while doing it.  I can see where it can take much of your time and you may not be any further ahead than just investing in those long term dividend stocks.  I'm not looking to be that day trader, not even close.  I really want to learn more about looking at companies and learn how to know if they are a good investment, long term, short term, and why.  Also why they'd be a bad investment.  I learned a bit more about SPAC and what can happen, especially with CCIV.  But, I'm in that long term and knew that if it ended up as part of Lucid, I'd stay for long term.  

@Willhound If you are ever in the MD area, please stop in for a nice boat ride, drinks, and would definitely love to chat finance stuff!  Rule of 72 is one that I like to preach to my kids.  The whole compound interest is something that I figure if my kids can learn, they too can retire early and be ok financially thru life.  At age 20, my daughter has 3 years of ROTH IRAs already, not too shabby.

Willhound

Certainly will take you up on that @Dream_Inn if I'm ever able. Your comment jumped out at me as a good starting point for my post as a practical example. Also happy for your daughter. I wish I had someone that lead me that way in my younger years. I'd be comfortably retired now. Most of my spare cash up until my 40's was invested in Molson's Brewery, and not in the stock.  . Although I once had a high yield bond from Molson Coors that did me well before it hit maturity date, and then that money added to my JNJ.
In Canada we have similar investment tax shelters as a ROTH and a 401K.
Our ROTH is a TFSA (Tax Free Savings Account) with investing after tax dollars but no tax on returns or withdrawal. Our 401K is an RRSP (Registered Retirement Savings Plan) with the investment coming off the top of your taxable income but taxed on withdrawal. So many people think it's a "rip off by the government" but what they don't realize is that having the tax advantage in your high earnings years easily offsets the tax paid in retirement when your income is supposedly less. And if it isn't, then good for you, pay the tax! (I'd describe myself as a bit of a "free market small S socialist") Where people get whacked on an RRSP is when they get silly and withdraw for things like boats and other toys and get taxed at max.
When you hit age 71 your RRSP must be converted to a RRIF (Registered Retirement Income Fund) that has a prescribed schedule of increasing withdrawals designed so that all of your funds are withdrawn by around age 95, and of course the government gets their tax dollars. Or it can be converted to an Annuity. Any extra cash can then be invested into the TFSA so can continue to grow. Can also be transferred "in-kind" if yo have a good investment you want to keep. Tax is paid at the applicable rate depending on if Capital Gains, Dividends or Interest. This is where a good tax accountant can be worth the $$$.
OK, I gotta stop now, starting to slide back into my old career.....

Dream_Inn

I guess I'm more about the phrase "pay me now or pay me later".  I'd rather pay the taxes now and not have to worry about it later.  Some of it may be at a higher rate now, or even all of it.  Then yes, I can pull out as much as I want for that boat or vacation when I'm retired and not think about the taxes.  It also allows me to receive my pension (yep, my company is still putting $ in for me) and also social security, keeping my taxes low enough that I can get them both close to tax free or at least really low bracket.  All that, but being able to pull more $ out when I want it. 

We also have the RMD (required minimum distribution) starting at age 70 or 72.  It sounds similar to your RRSP, but there is no RMD for ROTH IRAs.  We even have HSAs (Health Savings Accounts) which are even better because you can put the money in before tax (not after like the ROTH), have it grow tax free, and then pull it out tax free.  The catch is it is only for healthcare and you are limited to how much you can put in yearly.  Still a great thing to max out.

My parents certainly did not make a lot, but knew how to save and somewhat how to invest (in there time interest was higher, so CDs and EE savings bonds were great).  They taught me that very well and it is the least I can do for both my kids. 

Sorry to pull you into your old working world on the boating forum!   

Willhound

All good. Have to stretch the brain a bit from time to time. Now I sell building materials. The way that market is acting lately it's almost like being back in the stock market!

Handymans342

Willhound said:

All good. Have to stretch the brain a bit from time to time. Now I sell building materials. The way that market is acting lately it's almost like being back in the stock market!

Like pressure Treated wood??

Willhound

Hang on to your hat. A 2x4x8 is now around $7.50 (About $6 USD) here now. You will see those price increases in the US shortly.
Our lumber market analysts expect it continue to increase as the spring market takes off. And it won't even be how much it costs, it'll be can you find one? Our local Home Depot has zero in stock. Our business got some in from an alternate supplier, but selling at $7.89...which is our cost. Hoping to make it up on the hardware and accessories. 
A sheet of 1/2" plywood that was $20 last summer is $50 today. $40 USD.
People ask us what the he!! is going on, but what they're not thinking about is that for a year now as people are spending time at home and can't eat out in restaurants etc. they have been doing nothing but renovating. Our business grew 30% by volume over last year. But all the mills were closed for about 3 months when Covid first hit, and now even though back in production they can't have 50 guys in a lunch room all at once or working elbow to elbow so production is down to about 20%. High demand, low supply.
And don't think the lumber retailer's are getting rich. We're moving 30% more product but margins are so thin we're not making much more money.

Willhound

Handymans342 said:

Willhound said:

All good. Have to stretch the brain a bit from time to time. Now I sell building materials. The way that market is acting lately it's almost like being back in the stock market!

Like pressure Treated wood??

That's a whole other ball game. We just ordered in almost $300,000 in inventory to get a jump on the summer as all the suppliers are predicting shortages. As a result all the retailer's are being placed on buying caps. Once the initial inventory is gone replacement will be difficult. Expect to pay around $20 US for a 16 foot deck board this summer.

Handymans342

6x6x20. $174. I am planning on a 66 foot long deck. I dont know about lumber suppliers in Canada but the US says its getting better. I am waiting till next year. Lumber futures anyone????

randy56

Thanks for the word's of wisdom, And you are a wise man.  cannot imagine the stress of managing other people's money. Looking to you to make them rich. Read a book called The Riches Man in Babylon. about 40 years ago. Putting those principle's to work, which are. A part of all you make is yours to keep.  Put back 10% of your income and invest it wisely. Then your money will have children, then grandchildren and so on.  Also read a few of Dave Ramsey's books. So I had money's for collage educations, for my sons long before they got of  age, It's so simple, cannot understand why people do not have money.  I've long term investments as well. Roths and all that stuff. Been debt free for longer than a decade. The gambling stock market is a side line game for me. and do have some long's that pay dividends in there. Having fun with it. 

All that said picked up some high risk one's today. Will they succeed or fail. That is the chance I'll take, working on the houses money now. Not pumping money in there. 

My big 2 purchase's today were SlCA in biosciences and a small mining company in Canada MNXXF they mine minerals for lithium batteries.  Will I find the next tesla, amazon, walmart, google? who knows. 

The stock market is all hype. Would you be better off buying a lottery tickets? Going to casino? cripto's? big boat?  LOL

boatman37

Good post Willhound. I'm one of the day traders you mentioned. And I agree 100% that day trading is not for everyone. There is a saying that 90% of day traders lose 90% of their account in 90 days. I would believe that. Only about 10% make it. I think a big reason for that is after they blow out their first account they give up. I blew out my first account and saved up and started over. I'm now at the point of profitability. Not to the point yet that I can quit my job but I'm seeing nice returns now. I would not advise anyone to jump into day trading though unless you have a plan and figure on losing quite a bit at the beginning.

I also try to avoid those 'speculative' trades. I only trade options, no stocks. 99% of my trades are AAPL, TSLA, NVDA, ROKU, KO, NKE, etc. Established companies. Obviously trading options there are no dividends involved. If I was trading a larger account then maybe I would play that angle but as it stands I might see a $1 dividend 4 times a year...lol. My strategy is base hits, not home runs. Swinging for the fences will put you on the bench real quick.

But for most people Willhounds advice is spot on.  

halifax212

@Willhound Just read your post this morning and what timing. I have been with Edwards Jones for about 3 years now testing their style(after many cold calls) with a small stake TFSA. The way you describe the company philosophy makes it clear to me now why I like their style. We recently sold a commercial property in the city so I finally have some cash to invest. The bank does not want to see it leave their hands, but confident that careful investing with EJ will work for me. I really like the fact I can buy fractions of companies like Amazon or Alphabet. Going to get my check book out.

Willhound

@halifax212 it is an odd way how they cold call, isn't it? One of the things I hated the most about the job, but some of my best clients came out of it. Don't do it on my account but by all means ask all the tough questions. After 3 years you probably have a feel for the broker and their style. No investment or broker is fool proof but my experience both during my time with the company and after has been good. Full disclosure, it was my brother who got me into the company and who now also looks after my stuff, but to be fair, brother or not he doesn't give me any preferential treatment. If he knew I had a small stake in Bitcoin that I'm playing with he'd give me a stern talking to for sure!