Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Magnificent Seven Stocks
Old 11-12-2023, 06:58 PM   #1
Dryer sheet aficionado
 
Join Date: May 2021
Posts: 46
Magnificent Seven Stocks

I find this interesting because trying to decide which way the market will travel this election year. If similar information has already been posted feel free to delete mods. I jumped out of the equities in mid-summer and have 70% of my retirement in CD's or Treasuries. Not looking for advice just opinions. Realize there is a majority of investors on this site that are hold equities until the sun stops shinning, but market timing is easier now with higher CD rates. Looking forward to the long in tooth investors telling me if I need to buy now. Please read the following before responding. Thanks.

https://www.morningstar.com/news/mar...-back-to-earth
CatinKS is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-12-2023, 07:15 PM   #2
Full time employment: Posting here.
 
Join Date: Aug 2013
Location: New Jersey
Posts: 870
Your investing strategy seems more like gambling. Based on your post, you just missed a 7.2% rise in the SP500 according to https://www.early-retirement.org/for...on-119909.html
Al18 is offline   Reply With Quote
Old 11-12-2023, 07:40 PM   #3
Dryer sheet aficionado
 
Join Date: May 2021
Posts: 46
My index equities return 9 1/2% in 7 months and 5% when converted this summer to CD's . Not here to discuss past performance, but thoughts going forward as the equities are driven by only 7 stocks. The index funds are influenced by such a small group of stocks, does this make it more risky than most investor who invest in index funds expect?
CatinKS is offline   Reply With Quote
Old 11-12-2023, 08:14 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Feb 2019
Location: St Pete
Posts: 1,223
I've never had any luck timing markets... EVERY time (slow learner perhaps but I eventually learn) I tried I missed out on gains before I got back in.



70% is not the Magnificent 7 and I am about 50/50 large cap (C fund and VTIAX) and small cap index too that reduces their impact to me if they collapse as their closer to 15% of my diversified equity portfolio. Personally, I think the valuations are a bit crazy but what do I know....
__________________
FIREd 7/2021 at age 47
FLSUnFIRE is offline   Reply With Quote
Old 11-12-2023, 08:19 PM   #5
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 22,841
Quote:
Originally Posted by CatinKS View Post
My index equities return 9 1/2% in 7 months and 5% when converted this summer to CD's . Not here to discuss past performance, but thoughts going forward as the equities are driven by only 7 stocks. The index funds are influenced by such a small group of stocks, does this make it more risky than most investor who invest in index funds expect?
The purpose of this subforum is to discuss active investing, not to debate individual stock picking versus index funds.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 11-13-2023, 06:02 AM   #6
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 4,885
No predictions. Your odds on being right for two 50% guesses (get out, get back in) are only 25%.
__________________
"The mountains are calling, and I must go." John Muir
DrRoy is offline   Reply With Quote
Old 11-13-2023, 07:09 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,638
Quote:
Originally Posted by CatinKS View Post
I find this interesting because trying to decide which way the market will travel this election year. If similar information has already been posted feel free to delete mods. I jumped out of the equities in mid-summer and have 70% of my retirement in CD's or Treasuries. Not looking for advice just opinions. Realize there is a majority of investors on this site that are hold equities until the sun stops shinning, but market timing is easier now with higher CD rates. Looking forward to the long in tooth investors telling me if I need to buy now. Please read the following before responding. Thanks.

https://www.morningstar.com/news/mar...-back-to-earth
The article is over a month long. Here is what has happened in the last month. https://finviz.com/map.ashx?t=sec&st=w4

You can see the larger companies clearly, and their NAV's have continued upward.

I think what you are saying is that you have cash earning 5%, and are wondering whether to buy what?

Do you buy individual companies, an ETF, or maybe rotate back into a total index?
target2019 is offline   Reply With Quote
Old 11-13-2023, 09:27 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,781
What is not well understood is that even well planned market timing will have many whipsaws that usually will outnumber the good trades. But when the good trades generally payoff is during really nasty recessions. A good system will have an overall good return over several years and provide insurance against a disastrous portfolio drawdown in retirement. It will easily beat Treasuries.

Here is one market timing example:
1) you trade based on a 12 month moving average of the SP500
2) sell when the moving average gets to within 1% of the current SP500
3) buy back when the moving average rises 2.5% above the current SP500
4) only do these trades at the end of each month based on end-of-month data

Results for 1950 through now:
Compound return of 12.1% versus 10.8% for buy-hold of the SP500
BUT...
good trades = 12
bad trades = 25
worst whipsaw = -13%
average whipsaw = -5%

Note: I do not use this system but it is a good example of what you will go through and how much patience you will have to have when the market goes against such a simple trading scheme.
Lsbcal is offline   Reply With Quote
Old 11-14-2023, 06:44 AM   #9
Thinks s/he gets paid by the post
Badger's Avatar
 
Join Date: Nov 2008
Posts: 3,378
Quote:
Originally Posted by CatinKS View Post
Not looking for advice just opinions. Realize there is a majority of investors on this site that are hold equities until the sun stops shinning, but market timing is easier now with higher CD rates. Looking forward to the long in tooth investors telling me if I need to buy now. Please read the following before responding. Thanks.
One of those is asking opinions and the other is advice. My opinion is you are market timing and that is not a good idea. I did that once when I first started in investing. Unfortunately I lost but fortunately not much money and I learned a valuable lesson. I never tried that again.
I don't give advice when I don't have all the information and even then probably won't. Best of luck to you.

Cheers!
Badger is offline   Reply With Quote
Old 11-14-2023, 06:24 PM   #10
Recycles dryer sheets
 
Join Date: Dec 2007
Location: Jacksonville
Posts: 97
Their best years are behind them %-wise. Most retirement funds are overweight them too. Small/micro/nano caps are the way to go for the future for individual stocks.
__________________
I don't even use dryer sheets anymore ;)
SunGuy is offline   Reply With Quote
Old 11-14-2023, 10:04 PM   #11
Recycles dryer sheets
Dean56's Avatar
 
Join Date: Aug 2018
Posts: 264
Quote:
Originally Posted by Badger View Post
One of those is asking opinions and the other is advice. My opinion is you are market timing and that is not a good idea. I did that once when I first started in investing. Unfortunately I lost but fortunately not much money and I learned a valuable lesson. I never tried that again.
I don't give advice when I don't have all the information and even then probably won't. Best of luck to you.

Cheers!
I agree 100%

I have stayed invested in the market thru ups & downs and it has worked out well. I feel trying to time the market is a losing strategy.
__________________
Retired: September 2022
Dean56 is offline   Reply With Quote
Old 11-15-2023, 10:49 PM   #12
Recycles dryer sheets
 
Join Date: Feb 2014
Posts: 116
Please enlighten us as to why now is easier to market time.

If you want to market time, perhaps do that with some play money, like 10% of your equity allocation. By being out of equities now, you’ve missed some big gains lately.
thefist is offline   Reply With Quote
Old 11-27-2023, 01:42 PM   #13
Recycles dryer sheets
 
Join Date: Dec 2007
Location: Jacksonville
Posts: 97
Microsoft is a money printing machine, if I could only buy one stock for the rest of my life, it would probably be MSFT.

I expect it to be the top company coming out of the recession, and the first to hit $10 trillion market cap.

A forecast I saw showed this:
"Microsoft price will hit $4XX by the end of 2023 and then $6XX by the end of 2025. Microsoft will rise to $7XX within the year of 2027, $8XX in 2029, $9XX in 2031 and $1XXX in 2034."

Their sankey chart is so sexy lol.
__________________
I don't even use dryer sheets anymore ;)
SunGuy is offline   Reply With Quote
Old 11-27-2023, 02:10 PM   #14
Full time employment: Posting here.
 
Join Date: Aug 2013
Location: New Jersey
Posts: 870
MSFT stock was $329 at the beginning of 2022 and had dropped to $239 at the beginning of 2023. Way to risky for my taste - do not own any directly.
Al18 is offline   Reply With Quote
Old 11-27-2023, 02:18 PM   #15
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,534
Quote:
Originally Posted by SunGuy View Post
Microsoft is a money printing machine, if I could only buy one stock for the rest of my life, it would probably be MSFT.

I expect it to be the top company coming out of the recession, and the first to hit $10 trillion market cap.

A forecast I saw showed this:
"Microsoft price will hit $4XX by the end of 2023 and then $6XX by the end of 2025. Microsoft will rise to $7XX within the year of 2027, $8XX in 2029, $9XX in 2031 and $1XXX in 2034."

Their sankey chart is so sexy lol.
Somebody said that about Tesla a while back (hit $4,000/share). It's not going that well for them.
__________________
*********Go Astros!*********
aja8888 is offline   Reply With Quote
Old 11-27-2023, 05:48 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 5,617
Quote:
Originally Posted by Al18 View Post
MSFT stock was $329 at the beginning of 2022 and had dropped to $239 at the beginning of 2023. Way to risky for my taste - do not own any directly.
Thats too short of a time frame when investing in individual stocks. Ive owned MSFT since 2005, LLY since 2011 and AVGO since 2013. Ive done extremely well. 😁
Dash man is offline   Reply With Quote
Old 11-28-2023, 04:47 AM   #17
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,925
I heard one investor explain that the Magnificent 7 are the digital monopolies. Another investor explained that these are the companies that are positioning themselves to profit the most from AI. All I know for sure is, Netflix was part of the elite FAANGs group recently but isn’t mentioned much anymore. I’d never heard of Nvidia until this year. The only certain answer to your question is, “we’ll find out.”
Markola is offline   Reply With Quote
Old 11-28-2023, 05:46 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,638
From the article, the big 7 are: Apple Inc. (AAPL), Microsoft Corp. (MSFT), Google owner Alphabet Inc. (GOOGL) (GOOG), Tesla Inc. (TSLA), Amazon.com Inc. (AMZN), Facebook owner Meta Platforms Inc. (META) and chipmaker and artificial-intelligence darling Nvidia Corp (NVDA).

I think of these companies riding the crest of tech innovation. Somewhere below these 7 are companies which will rise to the top 10, but who knows when?

S&P 500 ETF Components https://www.slickcharts.com/sp500

NFLX is a good example of what happens when your moat is challenged and grows narrower. Other streamers have stepped up their game, offered lower prices (at least for awhile). Still, NFLX is top 30.

NVDA is a good example of what happens when your product development outdistances others. My 10-year old Dell has an NVDA graphics card. Now they are top choice for many new applications like AI.
target2019 is offline   Reply With Quote
Old 11-28-2023, 06:29 AM   #19
Recycles dryer sheets
Alex The Great's Avatar
 
Join Date: Nov 2016
Location: San Jose
Posts: 462
Quote:
Originally Posted by SunGuy View Post
Microsoft is a money printing machine, if I could only buy one stock for the rest of my life, it would probably be MSFT.
Their sankey chart is so sexy lol.
I own a little bit of MSFT shares but I would not consider it as a safe investment. May be I'm too old and still remember the troubles this company went through a decade ago?
__________________
Retired Sep 2023 @56
Target AA: 50% stock / 20% bond / 30% cash
Target WR: ~3.6%
Alex The Great is offline   Reply With Quote
Old 11-28-2023, 12:04 PM   #20
Recycles dryer sheets
 
Join Date: Mar 2012
Location: Atlanta
Posts: 410
DGF owns a bit of Microsoft as well. She bought 71 shares in 1994 in her after tax account with a cost basis now of $11.01 per share. She bought an additional 42 shares in her Roth account in 1999 with a cost basis of $41 which I have been slowly liquidating to play the ACA game until Medicare next July. Numerous stock splits.

Despite the long period of doldrums Microsoft experienced after 2000, buying and holding has been effective. It would have been even better if only her dividend reinvestment had not been halted when she moved everything to Fidelity years ago. I only discovered it when I went to stop it to better control taxable income after she retired.

DGF will not sell it from her after tax account although I have often tried to get her to diversify. While she has several hundred $K invested in it now, fortunately it would not derail her retirement in the least if it suddenly disappeared.
5Miler is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Hi, Im Twenty Seven... PsychoticChemist Young Dreamers 11 09-25-2008 08:06 PM
Seven deadly sins that lead to debt Martha FIRE and Money 31 03-09-2008 11:49 AM
New seven wonders of the world selected cute fuzzy bunny Other topics 16 07-31-2007 12:10 PM
Can I record seven TV channels simultaneously & digitally? Nords Other topics 27 07-08-2007 02:34 PM
Can I retire in 7 seven years Outby7 Hi, I am... 5 11-23-2005 12:34 PM

» Quick Links

 
All times are GMT -6. The time now is 01:30 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.