Stocks (S&P 500) Too Risky? The Alternative Strategy
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- Опубликовано: 12 апр 2024
- Many say one should invest in stocks no matter the price, just invest and forget about it and the rest will take care of itself. Some of us think differently, here is the discussion.
My passion is to look for low risk high reward investment opportunities. I apply my accounting skills and investing experience in order to find interesting investment ideas that offer the possibility to lead me towards my financial goals.
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Modern Value Investing book:
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I often get asked about brokers, here is a low fee broker, an international one that allows you to buy on global markets, and also offers complex solutions like options for when your investing skills grow. For now, it is one of the best solutions I have found for global investors, also based on your comments and inputs:
www.interactivebrokers.ie/mkt...
Stocks extended their year-to-date rally following the CPI report, with the S&P 500 last up 0.8% in afternoon trading. but I don't know if stocks will quickly rebound, continue to pull back or move sideways for a few weeks, or if conditions will rapidly deteriorate.I am under pressure to grow my reserve.
There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I actually subscribed for a few trading courses but it didn't help much, been getting suggestions to use a proper financial advisor, how did you go about touching base with your coach?
Finding financial advisors like Marisa Breton Dollard who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Marisa Breton Dollard up and send her a message. You've truly motivated me. God's blessings on you.
I am scared of Sven, but I also like scary things, thus I keep returning and supporting Sven.
:-)))
It's definitely a stock pickers market. Be patient. Be diligent. There's always a bull somewhere. Thanks Sven.
This is in fact a market where the good businesses are revealed. Mostly because you can always buy treasuries, and the borrowing rate makes it tough to survive on borrowing alone
Love your videos Sven! With love, from Edinburgh.
Hi Sven, great video! Would be interesting to hear your perspective on value ETFs and, in a separate video, Brookfield Corporation and its companies.
I was going to send you a suggestion to look at David Einhorn's latest investment into Solvay which was off the back of his investment philosophy which is very similar to the content in this video. I think a lot of people will ignore this video but this video is one the best videos you have made in my opinion due to the importance of the message
thanks, will check again but David specializes in US finance very often, which is hard for me as I don't have a team of specialist and don't know the laws as good as them...
How can you really go off historical pe when most people are passive investing nowadays compared to almost nobody 50 or 100 years ago.
1. The method that people invest shouldn't change the intrinsic value of the investment.
2. "Risk free" interest rates are around 5% whereas the riskier and more volatile index earnings yield is around 3.5%.
What the man is saying is not mutualy exclusiv with what are you saying, is a bubli s&p, so you should pick for better returns
< 30% of total market. But could raise the benchmark from historical. But we assume those investors can stomach major market drawdown and stay committed. Time will tell.
@@billybillson9831 most peoples 401k aren’t relying on pe they are investing no matter what and more money is invested since a higher percentage of the population is investing. So we should see the historical pe go up since passive investing started and we do. But also interest rates were going down at the same time.
Are you willing to look at the last 20 years of P/E data or must we thoroughly out all historical data?
The problem is that buying US T-bills outside of the US costs as much as the yield :( At least if you hold only a couple of months each time ...
Please do an analysis on HHH (Howard Hughes Holdings). I think it might be an interesting opportunity.
He can't.
I think P/E inflation is a reflection of the most recent pro-business stance in the US since the late 1980s or 1990s (possibly because of the end of the cold war), call it neo-liberalism call it whatever, what I think it reflects is the large extent to which business interests are protected in the US in particular. Business now are much safer in the US compared to the past and compared to elsewhere which is why people feel comfortable projecting earnings far into the future, resulting in higher P/Es.
Just look at when the government interrogates or sues big tech companies for their misdeeds, the market hardly reacts because they know that this is just a show and the business itself will incur no harm. If that happened in China the expectation would be that the company is dead in water.
I don't enjoy high P/Es and I prefer not to invest based on any macro-type trends, but I do think there is a rational explanation. I believe P/Es will hold in the 20-30 range as long as the US is controlled by business interests, but it's anybody's guess how long that will last.
It's scary how low the dividend is for the S&P 500
US has much more of a buyback culture than a dividend culture. Anyway, if you are investing for income, you wouldn't buy the 500, you would buy a portfolio of individual dividend paying stocks, or a dividend focused etf and possibly REITs, MLPs, Corporate Bonds, Treasuries etc... But as long as you don't need income now, it's total return that matters, dividend yield isn't that relevant.
@@mellowmarkable good point
Hi Sven, greetings from Canada! I always love your content and think of you as an incredible educator. I am one who DCA a portion of my income into the sp500 as I do not yet understand enough to go it alone. Do you think it would be wise to cut back on the amount i DCA into the sp500 (for example $500 per month to $250 per month) until valuations come back to a reasonable level? it sounds intelligent... but I feel like I maybe be missing something. Any insight is much appreciated. thanks!
If Sven doesn't respond i'll give you my input. I personally would lessen your DCA. Place the remainder in TBILS and use it as firepower for when the market goes down. I'm from Canada also. You could buy the ETF: CBIL or TBIL or just CASH. You could also buy the American TBIL version if you can exchange to USD at low cost.
You share good info free outside of your pd platform which I’m sure is worth it. Good for you. Not many on social media now doing same. I get it but for so many on limited $ and or just starting it’s hard. TBF I’m fine and try to help as I can.
if gov bonds go to 8%, should one even try to buy stocks?
personal risk reward yes of course but it strikes me that the higher the rates the higher expertise u need in stocks.
how should one think about it ?
Invest in stuff so cheap that it doesn't really matter.
For example: If you purchase something at 15x earnings and interest rates go to 8%, then you may get antsy.
But if you find a good stable business selling at 5x earnings, 8% interest rates won't worry you.
If you find a good stable business at 3x earnings, you would be able to sleep at night.
The hard part is finding the opportunity and understanding how good the opportunity is, but if you can do those few things then you should be able to make money regardless of what market conditions are
In theory stocks should always offer higher expected returns than bonds. At least that's the theory
If bonds go to 8% (and the markets expect them to stay there for the mid-long term) then stocks will drop enough so that their future returns are still higher than the bonds. This would mean tough luck for the existing stock holders of course who bought at the higher prices but those who buy afterwards would expect higher returns than bonds.
With all due respect, how many times are you going to make this video about the yield and returns of the S&P 500? Maybe I’ve just watched too many of your videos 😅
lol $5 mil. I am loose change investor in that case, but certainly trying to compound my investment.
🗽 I compare the SPX now with the 1970ies. It was a terrible time for stock investors.
.
Got 10k sat in my account waiting for a 10%discount on the S&P500!
I dare to say that it’s pointless to compare the current situation to a few decades ago let alone damn near 100 years ago like everyone tries and wants to do. The United States isn’t the same country and the world isn’t the same world.
People have been screaming we’ve been in a bubble for like 10 years straight at this point. As long as we have essentially state mandated inflation, the market/assets will inflate perpetually. We could inflate for 30 more years or have a massive deflationary event next month. But who knows when because we’ve never had state mandated inflation, crazy technology, and a dying empire simultaneously.
correct, but I don't want to bet my financial future on 'who knows'
First like, then watch
Would love a follow-up video on UNH
thanks for sugeesting, will see as it is not my specialty!
Do you know why palladium is on six year low?
Its gotten tired of all the sex through the years.
automotive industry demand likely
'In the long run, we are all dead' - John Maynard Keynes. It is unlikely the large US government's debt deficit going to be fatal in the short run and it looks like interest rate has currently peeked and interest rate cuts looks inevitable. Buying long duration US treasury and US stock market look like a low risk and high reward bet to me. Make the money now and nobody know what will happen in 10-years time.
"Since the early 1990s, about 80% of the U.S. dominance has come from relative price/earnings multiple expansion versus non-U. S. stocks. People were paying less for the U.S. at the beginning, and now they are paying considerably more. Maybe that is justified; maybe things like U.S. tech dominance are real. But justified doesn’t mean repeatable. Justified at best means something isn’t going to reverse in a big way.
Looking to the future, the case that the U.S. will have permanently higher equity returns is pretty untenable. Even if U.S. companies are worth it, they are priced as such."
- Cliff Asness, AQR
I think there is too much fear mongering. When investors invest in the stocks passively, volitility is the name of the game. If investors can't stomach 40% decrease investing in the market, then they need more diversification that will either preserve wealth like bonds or diversify across different markets and asset classes or all of these. Besides, you kind of want the market to correct because theoriticlly is it over valued, and this means expected long-term returns will continue shrinking until a correction happens. But stock picking isn't for the unintiated, and there is 99% probability that the majority of your viewers will fail to best the market
Sven, please ignore the idiots that criticize you. They are idiots for a reason.
You share what you know, and we as having our own brain decide what to do
TY for everything
criticism is part of truth. Truth itself is being born in an argument/dialogue. I don't think one should think of other people as idiots, only because of critic....this will never lead to good returns or a good philosophy in life. I think the partnership betwenn Buffet and Munger was so productive, BECAUSE they were never to shy and especially Charlie always shared his opinion no matter what. :))
It's so difficult to catch the point of your video without watching it full. I appreciate your videos, but this time I couldnt get your point.
the point is to watch it in full!
@@Value-Investing well, I want to save my time, and quickly decide if the "alternative" strategy is what I should consider. I felt that the video title was a bit misleading.
Thank you again for your hard work.
Good point🙂
Alternatively DCA in great companies when the price is right and if all else fails; oil, gold and silver
no
There is another option!
Price of Gold per kg in 2004 was $13.000
Price of Gold per kg in 2024 is $75.000
CAGR Gold over the last 20 years is 9%
(CAGR S&P500 since 2024 is also 9%)
Amazing DD, I am buying g0ld coins.
Best Channel on RUclips
thanks!
Good yes but more the better. ; )
UBS Factor MSCI USA Prime Value UCITS ETF
Just look at the numbers you provided- since May 2009! that was literally one of the best times in history to start investing. so either we are in the long and worst Standard Deviation of all time, or you are just wrong again. just like you did about Nvda 2 years ago; didn't you call it the most overvalued stock or something like that? As much as I respect you, I don't like your bias.
This is a window to get as much of the latest tesla innovation shares as possible considering the dip