Ive been working for about 2 years now.. and as per advice on this forum have been passively investing into index funds. However, i also allocate a small portion of my investments (5-10%) into doing my research/speculation. I have no plans to change my passive investing plan.. but am looking for some advice on my current long positions.
So my questions:
1) Is it even worth it for most people to try to manage a small portion of their assets? Or is this a huge -EV move i need to stop?
2) Is anyone long on ANYTHING right now? A few months ago, with all the recession talks looming, i moved my assets into oil/energy stocks. So far they have been ok, but im seriously starting to wonder if i should bail on them as well.
1. In the short run it's probably -ev, until you get some experience; in the run, it should be +ev. It really depends on you, and whether you enjoy the drudgery that comes with following the market vis a vis looking at charts and financial statements. If you don't, you'll most likely be better off letting someone else do the dirty work.
2. I follow the Dow 30 very closely. In the last 6 months there hasn't been a single stock that would've made you money, had you been long, and, IMO, we're not at the bottom, yet.
It should be +ev so many bad company's in index funds that weigh down the perfomance. If you can weed out the crap you should be able to do better but you have to stay on top of things.
for the past week or so I have been very long, SPY(index etf S&P) and may favorite is GE. GE is up 4points off its lows and has a lot more upside i feel do your reaserch but I love GE. I also have a small long position in WFC and thinking about entering FWLT but might see if i get a pull back from yesterday. I am short Coal and materials sector. These are short term trades and where small hedges against my longs.
I don't trust anything except maybe GE in this market and try to remain extremely flexible. Trying to take advantage of the range bound mode we have been trading in for a month or 2.
I should also add that my index plays are options not the ETF. More risk reward but I think its easier to predict how a sector or the market as a whole will move the an indivdual stock. As there are to many things in this envirment that could make my options go to zero if I am wrong where the index's I should be able to salvage a little bit if i am way wrong.
2) Is anyone long on ANYTHING right now? A few months ago, with all the recession talks looming, i moved my assets into oil/energy stocks. So far they have been ok, but im seriously starting to wonder if i should bail on them as well.
For what its worth, I think that yes, there are companies to be long on. Quite a few of them. its only short term variance anyways, as long as you are staying out of the super hot sectors.
