Author Topic: case study: Almost 500k in stocks... what do i do now?  (Read 11610 times)

i_have_so_much_to_learn

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case study: Almost 500k in stocks... what do i do now?
« on: March 05, 2019, 12:07:45 AM »
I'm hoping to use my portfolio as a case study. It holds most of my net worth but is not shielded from tax, and is extremely exposed to market volatility. I'm up quite a bit overall, and the current financial volatility and uncertainty is a bit scary to me.

Current Holdings:
TSLA: 10k (down 1.5%, or $145)
FB: 7k (down 5%, or $370)
SQ: 37k (up 65%, or 14k)
GOOGL: 27k (up 73%, or 11k)
GOOG: 180k (up 31%, pr 42k)
AAPL: 38k (up 83%, 17k)
AMZN: 169k (up 180%, or 109k)

Total: 468,000 with 190,000 in unrealized gains.

All of the investments are long term investments, and as you can see, they are quite silicon valley heavy. Note that I do have other investments that I'm not listing here. Particularly, my 401k and also a wealthfront account. The 401k is a target retirement 2055 account (approx 185k), and wealthfront is on 10/10 risk (wealthfront is valued at 56, up about 14%, or 7k).

I live in a HCOL area, and typically buy about $10k in stocks every 3 months or so. 

So... What would you do? take some wins? take some losses? do nothing? sell it all, take a massive tax hit, and move to indexes? sell it all, buy bitcoin, and enjoy an early heart attack? Buy a house and hope the market stays strong? Slap myself in the face with a fish because i'm a paranoid freak?

i'm open to advice, roasting, compliments, and other statements. I'm also open to your own stories and anecdotes as well as scientific evidence for why I'm doing something wrong (or right).

Thanks!
« Last Edit: March 05, 2019, 12:39:50 AM by i_have_so_much_to_learn »

Montecarlo

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #1 on: March 05, 2019, 05:30:15 AM »
Your concentration of wealth in just a few stocks is staggering.  Remember how GE turned out to be held together by Welch, and when he left the company basically disintegrated.  You’re basically betting it all on Schmidt, Bezos, and their successors.  You met or profiled the women or men who will be taking the reins when those two are gone?  And you’re putting your entire future in their hands!

I would immediately sell at least 130K of Google and 120K of AMZN and diversify.

What’s your top tax bracket?  It might be worth talking to a CPA to see if there’s any way to shield you from capital gains.  If there’s anything you can do to reduce your ordinary income for this year, there’s a chance you can pay 0 capital gains.

radram

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #2 on: March 05, 2019, 07:19:26 AM »
Congratulations on getting a good outcome. Do you think you can sustain that (apparent) stock picking success over 10-20 years?  Do you feel mostly skilled or mostly lucky?

We really have no idea if this is a "good" outcome or not. Is the $190k in gains through a 20 year period, or 2 months? What did index funds do during this time?

I would base selling on the percentage of your overall net worth this makes up. I think stock picking is just fine for, say 10% or so of a portfolio, more so if you are constantly adding to your stache. Your adding of $40,000 annually makes this:

1. A great problem to have
2. A problem that decreases with time, assuming indexing with your future contributions.

How would it change your life if these went to near 0? If "not much", then I would keep them and slowly migrate to index funds with your new money. If you have a financial event coming up(buying a house, or an iceberg, etc.), you might tap these, or sell slowly only to utilize the amount before hitting the next tax bracket.

ysette9

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #3 on: March 05, 2019, 09:46:46 AM »
I’d be very scared to own that portfolio. You are taking on incredible uncompensated risk by not being diversified. I would immediately put all future investments into a combo of VTSAX and VTIAX (in fact that is what I do now) and work out a plan for selling off what stocks you have and transferring the money to the same two index funds.

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #4 on: March 05, 2019, 11:11:19 AM »
Your concentration of wealth in just a few stocks is staggering.  Remember how GE turned out to be held together by Welch, and when he left the company basically disintegrated.  You’re basically betting it all on Schmidt, Bezos, and their successors.  You met or profiled the women or men who will be taking the reins when those two are gone?  And you’re putting your entire future in their hands!

I would immediately sell at least 130K of Google and 120K of AMZN and diversify.

What’s your top tax bracket?  It might be worth talking to a CPA to see if there’s any way to shield you from capital gains.  If there’s anything you can do to reduce your ordinary income for this year, there’s a chance you can pay 0 capital gains.

You're entirely right. (Except for schmidt - he has nothing to do with Alphabet's day-to-day leadership since he stopped being CEO in 2011, and has even less to do now that he's not executive chairman for 2+ years - still, i guess it's larry page in this case.) I'm already in a high tax bracket. Living in California doesn't help (i.e. 10% tax rate approx). Taking on more than 100k in an immediately taxable transaction doesn't seem like the best idea. ...And even the best CPA can't reduce my ordinary income by 120k. I appreciate you providing this advice and giving me something to thing about.

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #5 on: March 05, 2019, 11:42:50 AM »
Congratulations on getting a good outcome. Do you think you can sustain that (apparent) stock picking success over 10-20 years?  Do you feel mostly skilled or mostly lucky?

Neither? That is to say that I performed significant research when building this portfolio but I wouldn't hold out to be this "correct" over a long period of time. Warren buffet has a contest on whether stock pickers can beat the market and I believe that the answer has always been "no".

With that said, exposing yourself to *some* picking does give you the ability to rise (or fall) behind the crowds.

I think with Square and Amazon I was able to pick them well, but this doesn't necessarily mean I'm good at anything. I research stocks for months until I decide what is a good price for me to get into them. Until I *realize* my gains, I haven't earned anything, as scary as it is to think about - it's true.
« Last Edit: March 05, 2019, 11:44:29 AM by i_have_so_much_to_learn »

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #6 on: March 05, 2019, 11:49:18 AM »
Quote
We really have no idea if this is a "good" outcome or not. Is the $190k in gains through a 20 year period, or 2 months? What did index funds do during this time?

You're right. Good questions.

The Google and Amazon have been acquired consistently over 5 years. Tesla and FB were purchased in around November 2018. AAPL was about 3ish years ago. the SQ was  purchased just over a year ago. There were others of course those that I have already pruned, but losses over the past 4 years were less than 10k or so. (2.5k in losses per year on average). Almost no gains have been realized.

Indexes in this time period have gone up almost as well: vstax approximately 48.9%, and s&p (.inx) approximately 48.6%. Meanwhile, I'm up 70% while still dollar cost averaging quarterly.  This is not to say that this is sustainable, simply adding some data.

Quote
I would base selling on the percentage of your overall net worth this makes up. I think stock picking is just fine for, say 10% or so of a portfolio, more so if you are constantly adding to your stache.


This is interesting, thanks. 10% seems like a fine "risk" number. I was actually considering the TSLA, FB, and SQ to be my higher risk, and my AMZN, APPL, GOOG/L to be "not my highest" risk. They are heavily concentrated in tech but they are also massive companies that have excellent momentum and are safer than many other places right now. So if my first stock cohort listed was a 9 risk out of 10, I would consider AMZN/AAPL/GOOG/L to be something like a 8 out of 10. Now, having all three of them probably bumps me to a 8.5 :).

Having almost 50+k in wealthfront meants that I"m already exposed to indexes and foreign markets, bonds, etc.


Quote
Your adding of $40,000 annually makes this:

1. A great problem to have
2. A problem that decreases with time, assuming indexing with your future contributions.

How would it change your life if these went to near 0? If "not much", then I would keep them and slowly migrate to index funds with your new money. If you have a financial event coming up(buying a house, or an iceberg, etc.), you might tap these, or sell slowly only to utilize the amount before hitting the next tax bracket.

More great questions, thanks for asking. It wouldn't change my day to day life at all, but it would change my ability to invest in other vehicles. I.e. having 400k in stocks is fairly liquid - i can wait a few days and get all the cash out to buy a house, etc. But if the market collapsed and this was only worth 100k - I would simply have less buying power (but I'm already earning enough to cover my bills, pay myself first, have an emergency fund, max out my pretax 401k and some aftertax, etc.)

I really like the idea of moving _new_ money to an index fund. I'll have to think about this for a bit, but it allows me to not take a tax hit, retain my current risk level, and decrease it over time.  Thanks so much for this, I'll try to think about this a bit more.

MrThatsDifferent

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #7 on: March 05, 2019, 06:32:21 PM »
This isn’t really a case study and would do better in the investor section

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #8 on: March 05, 2019, 06:43:28 PM »
This isn’t really a case study and would do better in the investor section

I'm happy to move it if that's possible, but I actually disagree with your assessment. It's not a traditional case study in terms of the template for this topic, but it is IMHO a case study by definition.

How do I move it?

BicycleB

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #9 on: March 05, 2019, 06:56:49 PM »

I really like the idea of moving _new_ money to an index fund. I'll have to think about this for a bit, but it allows me to not take a tax hit, retain my current risk level, and decrease it over time.  Thanks so much for this, I'll try to think about this a bit more.

One variant I would consider in your shoes:
1. Yes, direct all new money into an index fund. Or two or three, for reasons below.
2. Make your purchases via the "specific identification" method. This means each purchase you make is specifically identified as to date of purchase, share price of purchase, and (I believe) specific shares purchased.
https://www.bogleheads.org/wiki/Specific_identification_of_shares
3. In future, at some point one or more purchase will decline in value. You can then sell "in the money" stock (TSLA or whatever) at the same time as the fund or stock that has declined. If the details are handled properly, the loss on one offsets the gain on the other, avoiding the need to actually pay capital gains tax. If enough years pass, eventually you will have enough losses from the "noise" in the markets to gradually sell the individual stocks, and end up in an all-index portfolio.

I don't know if this offset works for state tax. Research all this carefully.

i_have_so_much_to_learn

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civil4life

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #11 on: March 15, 2019, 05:35:12 PM »
You could do some tax harvesting offset some of the gains with your current losses in FB and TLSA.

blingwrx

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #12 on: March 15, 2019, 09:36:30 PM »
I'm also in a similar situation with a 400k taxable portfolio and 120k in unrealized gains and I started off with mostly tech FAANG stocks, the past few years have been great for us who have followed those FAANG stocks, but it definitely has been a scare a few months back with the corrections taking a big hit on the portfolio temporarily, it's a reminder of how volatile and how easy these tech stocks can come crashing down, but of course I'm staying the course and things have recovered mostly.

My strategy has been to dilute the shares rather than pay a big tax bill right now. I about 50k a year to my portfolio so in due time things should dilute. Though my biggest holdings only represent 16% of my portfolio so it's bit easier for me to dilute than for you. I also wasn't maxing out my 401k at the time which was before i discovered MMM, so now I max out the 401k first and invest in VTSAX with that money. Any extra money goes into my taxable portfolio and I mostly steer away from tech and pick stocks in other sectors to diversify. I only sell stocks that are down now to pare some gains.

Next step for me would be to eventually FIRE and have a much lower income and tax bracket, then I could get away with not paying any capital gains tax on the gains as long as I don't earn more than 78k for married filing jointly. But if you do think your income will be a lot more even in retirement or if you lose faith in these companies then I'd start sell slowly and pay the long term capital gains on them which isn't too extreme compared to ordinary income tax. I would not sell everything all in one year though and slowly do it, but I'd definitely talk to an accountant to see the best strategy to realize these gains over time with the least tax impact.

K-ice

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #13 on: March 15, 2019, 11:54:57 PM »
I was in a similar situation with 2 Jr. oil field company stocks.

At one point I even moved one in kind into a tax advantages account where it would “grow”.

3 years ago all new investments were put into Vanguard ETFs. I was waiting for my Vanguard funds to grow so these risky stocks became a small part of my portfolio.

Guess what? Today they are a small part, just not the way I planned.

K-ice

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #14 on: March 16, 2019, 12:04:51 AM »
Just to add. I wish I had had an exit strategy. I was blindly buy & hold.

Maybe this does belong in the investing section with a when to sell question.

I’m not sure of the tax consequences but I wish I had a rule like:

If they gain xx% sell off that gain.

If my xx had been 20%, 50% or even 200% I wouldn’t be sitting with a loss today.



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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #15 on: March 17, 2019, 06:45:47 PM »
I agree with some others above to some degree.

I say some degree because you do need to diversify. However you didn't mention how old you are so that could play into this a bit.

I had a situation where I worked for a company and invested ALL of my 401k in their stock. I was in my 20's and was there for over 10yrs. When I left I had 3000 shares of stock and the first thing I did was diversify.

I will tell you that had I not done so I'd have more money but it's a gamble and had that stock plummeted I'd be in deep trouble. I kept 1000 shares and put the rest into funds so I was better leveraged. Over time the return has been good, the 1000 shares have gone up about 70% and the rest of it has gone up about 20-22% over time.

It's a matter of risk vs reward. When I was younger I was totally ok with the risk because I figured I had a lot of time ahead. As I got older I became a little more risk averse because I had goals and more of a strategy around protecting the investments

OrchardTree

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #16 on: March 17, 2019, 07:06:09 PM »
I am interested in your Amazon research. What made you want to own it?

ysette9

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #17 on: March 18, 2019, 11:30:06 AM »
I agree with some others above to some degree.

I say some degree because you do need to diversify. However you didn't mention how old you are so that could play into this a bit.

I had a situation where I worked for a company and invested ALL of my 401k in their stock. I was in my 20's and was there for over 10yrs. When I left I had 3000 shares of stock and the first thing I did was diversify.

I will tell you that had I not done so I'd have more money but it's a gamble and had that stock plummeted I'd be in deep trouble. I kept 1000 shares and put the rest into funds so I was better leveraged. Over time the return has been good, the 1000 shares have gone up about 70% and the rest of it has gone up about 20-22% over time.

It's a matter of risk vs reward. When I was younger I was totally ok with the risk because I figured I had a lot of time ahead. As I got older I became a little more risk averse because I had goals and more of a strategy around protecting the investments
My father knew people who had most of their 401k in company stock. Then the company went though bankrupt and those people lost most of the value of their 401ks and many also lost their jobs (and therefore stopped accruing pension). Don’t concentrate your risk like that.

MrSpendy

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #18 on: March 31, 2019, 10:52:56 AM »
Excluding your indices look through exposure to tech, and whatever exposure you have through working in a tech economy(directly or indirectly), I think you have a big enough overweight to warrant more immediate action than trimming exposure via slow dilution. At the same time, paying taxes, particularly state taxes on investments sucks, so I understand the hesitation to realize

I'd do something along the lines of

1. Sell FB and TSLA for small loss.

2. Sell small amount of highest cost lots of the other stuff using loss from FB/TSLA. This will give you the most proceeds per realized gain, but in the end won't be much.

3. Learn about zero cost collars, wash sale rules, index hedges etc. and come up with a trategy to take your 60%+ tech exposure to something more manageable (maybe 30%?, the index is 20%), while minimizing tax.

I'm not going to get too specific in recommendation (and you should carefully consider each step and consult a tax/investment advisor) may be worthwhile is putting your ~$450K of remaining individual tech stocks into a margin account, buying 20-30% OTM far out (Jan 2021) puts for 2-3% of market value. This would cap your loss from these big individual stock positions. You could fund them with OTM calls if you like (zero cost collar) to reduce costs, but that could force realization if the stocks go up. Let's say you cap your loss at 25% ($112K of $450K). you could then  be more aggressive in diversifying, by using the hedged individual stock positions as collateral to buy index, or you could just more slowly dilute your exposure with the peace of mind of insurance on those individual names. As your index contributions become bigger and the tech stocks smaller piece of the puzzle you can reduce hedging costs over time. t.

The most aggressive thing to do would be to short a large cap tech ETF against your holdings and buy a corresponding index ETF, but this has basis risk between the hedge and your holdings since your holdings are pretty much 3-4 names; your individual company risk wouldn't really go down as much (but sector risk would). This is a relatively simple solution that would be proposed if you were an exec at one of those companies and couldn't sell the stocks (or wouldn't want to for tax reasons). There are more complex solutions, but no need to get into that.

Of course, anything you do for peace of mind/diversification has costs (option premiums, margin interest if you borrowed against the stocks to diversify, etc) just like there are tax costs if you sell the stocks. You have to quantify and evaluate which of those costs you prefer to pay.

What would be your all-in (state/Federal/Obama surtax) tax rate if you just sold all of them today? 25%? 30%? I'm going to use 30% or $57K of taxes.

Okay so you could pay a certain $57K, or you could do the following:

1 Extreme:  Risk it: Pros: tax deferral, potential continued gains on high flyers, Risks: permanent impairment of wealth

2. Extreme: Selll all and write a $57K check

Middle: Cap losses at some comfy amount, pay 1-2% ($4.5-$9K) in hedging costs for 3 - 5 years as you diversify. Retain upside on names. Or 0 cost collar with staggered expiries (so you don't realize it all in one year) it you don't want to spend to much on hedge.

Other more complex middle: introduce some form of index hedging/overweight offset.

Other: Move out of the PRC to a low cost state after some form of the middle ground and sell at 0%.

It goes on. the possibilities are wide.
« Last Edit: March 31, 2019, 11:27:20 AM by MrSpendy »

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #19 on: September 04, 2019, 12:47:09 AM »
Thanks everyone. It's been a long time.

As an update, I sold off my TSLA for a small loss.

I have have continued putting money at 200 per week into my wealthfront. My asset allocation today is as follows:

Current Holdings:
FB: 8k (up 4%, or $304)
SQ: 30k (up 35%, or $7800)
GOOGL: 45k (up 40%, or 13k)
GOOG: 193k (up 41% or 45k)
AAPL: 45k (up 111%, or 25k)
AMZN: 179k (up 197%, or 119k)

Total: 502k with 210k in unrealized gains

401k: target retirement 2055, 193k total (183k in pretax and about 10k in roth)
wealthfront: 59k (up 25%)


Compare with my first post, in march.
Quote
I'm hoping to use my portfolio as a case study. It holds most of my net worth but is not shielded from tax, and is extremely exposed to market volatility. I'm up quite a bit overall, and the current financial volatility and uncertainty is a bit scary to me.

Current Holdings:
TSLA: 10k (down 1.5%, or $145)
FB: 7k (down 5%, or $370)
SQ: 37k (up 65%, or 14k)
GOOGL: 27k (up 73%, or 11k)
GOOG: 180k (up 31%, pr 42k)
AAPL: 38k (up 83%, 17k)
AMZN: 169k (up 180%, or 109k)

Total: 468,000 with 190,000 in unrealized gains.

All of the investments are long term investments, and as you can see, they are quite silicon valley heavy. Note that I do have other investments that I'm not listing here. Particularly, my 401k and also a wealthfront account. The 401k is a target retirement 2055 account (approx 185k), and wealthfront is on 10/10 risk (wealthfront is valued at 56, up about 14%, or 7k).

I live in a HCOL area, and typically buy about $10k in stocks every 3 months or so. 

So... What would you do? take some wins? take some losses? do nothing? sell it all, take a massive tax hit, and move to indexes? sell it all, buy bitcoin, and enjoy an early heart attack? Buy a house and hope the market stays strong? Slap myself in the face with a fish because i'm a paranoid freak?

i'm open to advice, roasting, compliments, and other statements. I'm also open to your own stories and anecdotes as well as scientific evidence for why I'm doing something wrong (or right).

Thanks!

So - I have increased my NW a little bit, and I feel very stressed with the news about a recession, the desire to diversify into real estate but the market not being very buyer friendly, and some job dissatisfaction. I've looked into approximately 300 RE deals, and made a non-winning offer on 2, and then chickened out of the 3rd (it had a 5.5% cap rate). I've been watching shark tank and have watched morons make money from butt-wipes, literally. I don't know what to do now. I even looked into angel investing. i considered diversifying into indexes, but stopped in my tracks with the tax consequences.

I had a silly goal of reaching 1 million dollars before dec 2019. all in, (including my HSA and some other accounts), i'm at around 815k today. So i'm not going to hit that goal - but that's OK.

Sorry for my rambley post. I could use some advice and an "it's all going to be OK" hug.

DK

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #20 on: September 04, 2019, 05:48:23 AM »
sooo....re: tax implications, you know you only pay capital gains, on your gains? If you've got roughly 500k total, and 200K in unrealized gains, that means you have 300k that you started out with investing. You can pull all of that out tax free, because it's the already taxed money you started with.  (note it's a bit more difficult than this because that is amongst many stocks).

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #21 on: September 04, 2019, 09:15:25 AM »
sooo....re: tax implications, you know you only pay capital gains, on your gains? If you've got roughly 500k total, and 200K in unrealized gains, that means you have 300k that you started out with investing. You can pull all of that out tax free, because it's the already taxed money you started with.  (note it's a bit more difficult than this because that is amongst many stocks).

Thanks for your suggestion - unfortunately that's not the way it works. It's not possible to take out what you put in because the value of a single asset has changed, and that's what you need to sell.

For example: if you buy 5 shares of MMM at 10 dollars each, you have put 50 dollars in (minus fees, but let's ignore them for this.) If in a few months, they are worth 20 dollars each, you have 100 dollars! But to take money out, you have to sell one stock. If you sell 2 stocks, you'll pay taxes on the difference for each one, which is 20 dollars total of income you need to pay taxes on.
« Last Edit: September 04, 2019, 10:00:56 AM by i_have_so_much_to_learn »

ysette9

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #22 on: September 04, 2019, 09:27:06 AM »
If you are stressed out about the news harping on about a possible pending recession then I think you need to take a step back and re-evaluate your strategy. The economy and the stock market will go up and down. We don’t know when or why, we must know that eventually this happens. Your investing strategy needs to be independent of this. On any given day you will find some supposedly smart analyst saying that the economy/market will either dump or go up. The truth is that pretty much no one knows.

So, work on your investment policy statement (look this up on Bogleheads wiki for details and examples). Your investing strategy should make you comfortable and tell you what to do in advance. You should have plans to make adjustments based on life events such as births, marriage, death, reaching certain key ages (59.5, for exemple), or how close you are to FI. It should not include anything about reacting to talking heads predicting gloom. It should not react to market conditions with the exception of something like “rebalance if my portfolio is more than 5% off from my target asset allocation”. Educate yourself enough do that you understand the long term behavior of the stock market and write out a plan that you an refer to when you start feeling shaky. This is what smart people around here did to keep them from bailing back during the Great Recession, and why some people on these forums are FI today whereas other people are still working.

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #23 on: September 04, 2019, 10:08:26 AM »
Are you maxing out your 401k and traditional IRA?

If not, sell as much stock as it takes to be able to max them out. The income tax savings will more than make up for the LT capital gains.

If so - or with the remainder - pursue the collar strategy advocated by @MrSpendy . A word of advice though: Enter this strategy when the ^VIX is under 14 or the individual stock’s volatility is near a relative low. I have a collar position on an index ETF that I set up when the ^VIX was 12.5 and currently I’m up on both the stock and the hedge!

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #24 on: September 04, 2019, 05:24:29 PM »
I started out picking individual stocks a long time ago. On some I got super lucky (AMZN, BRK-B, COST, DE, MA) and on some I f*cked up royally (GNW, KMI, PII, TCS). When I learned about the MMM way, I switched to feeding my accounts with mutual funds. Some of them are actively managed (FSPTX, HJPSX, PRGFX, TRBCX), but almost all my money now goes into VOO, VTI, and VGT. The only stock my wife picked about 9 months ago (?) was ROKU, and that has tripled since then.

For the past 2 years or so I've been waiting for my individual stocks to spike, and I have sold quite a few when that happened. The money went into VOO, VTI, and VGT.

I concur with other posters who suggested to feed index funds from now on. That should do the trick.

Now . . . I personally don't see a recession on the horizon. There may be a correction, eventually, but at the time when we know it's a recession, it would be too late to sell. Yet I refuse to sell out of fear of a recession. That's just not logical.

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #25 on: September 04, 2019, 10:32:13 PM »
So, work on your investment policy statement (look this up on Bogleheads wiki for details and examples). Your investing strategy should make you comfortable and tell you what to do in advance. You should have plans to make adjustments based on life events such as births, marriage, death, reaching certain key ages (59.5, for exemple), or how close you are to FI. It should not include anything about reacting to talking heads predicting gloom. It should not react to market conditions with the exception of something like “rebalance if my portfolio is more than 5% off from my target asset allocation”. Educate yourself enough do that you understand the long term behavior of the stock market and write out a plan that you an refer to when you start feeling shaky. This is what smart people around here did to keep them from bailing back during the Great Recession, and why some people on these forums are FI today whereas other people are still working.
^^
I will look into this - thank you for the sage advice. I like the idea of writing a plan that I refer to when I'm feeling shaky.


Are you maxing out your 401k and traditional IRA?

If not, sell as much stock as it takes to be able to max them out. The income tax savings will more than make up for the LT capital gains.

If so - or with the remainder - pursue the collar strategy advocated by @MrSpendy . A word of advice though: Enter this strategy when the ^VIX is under 14 or the individual stock’s volatility is near a relative low. I have a collar position on an index ETF that I set up when the ^VIX was 12.5 and currently I’m up on both the stock and the hedge!
^^
I maxed out my pretax 401k and put a couple hundred every month in my roth 401k. I do not have an IRA.


I started out picking individual stocks a long time ago. On some I got super lucky (AMZN, BRK-B, COST, DE, MA) and on some I f*cked up royally (GNW, KMI, PII, TCS). When I learned about the MMM way, I switched to feeding my accounts with mutual funds. Some of them are actively managed (FSPTX, HJPSX, PRGFX, TRBCX), but almost all my money now goes into VOO, VTI, and VGT. The only stock my wife picked about 9 months ago (?) was ROKU, and that has tripled since then.

For the past 2 years or so I've been waiting for my individual stocks to spike, and I have sold quite a few when that happened. The money went into VOO, VTI, and VGT.

I concur with other posters who suggested to feed index funds from now on. That should do the trick.

Now . . . I personally don't see a recession on the horizon. There may be a correction, eventually, but at the time when we know it's a recession, it would be too late to sell. Yet I refuse to sell out of fear of a recession. That's just not logical.
^^
thanks for the personal story - i appreciated hearing about your history. I don't want to sell out of fear of recession, per se, but more to have more cash on hand to buy cheap assets if one hits. Do you have a target NW percentage to keep in cash? Is this considered market timing if you were going to buy them anyways but wait for a better moment?
« Last Edit: September 05, 2019, 01:17:22 AM by i_have_so_much_to_learn »

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #26 on: September 05, 2019, 01:14:51 AM »
Yes, that is considered market timing to keep cash on hand because you are waiting for some market drop (by how much?) to buy. I believe people refer to that as “dry powder”. I don’t have links at my fingertips but I have read around these parts that the drag of cash on your overall portfolio usually means this loses out to a strategy of one’s tiny everything in your chosen asset allocation. 

“Time in the market, not market timing”

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #27 on: September 05, 2019, 01:19:57 AM »
Yes, that is considered market timing to keep cash on hand because you are waiting for some market drop (by how much?) to buy. I believe people refer to that as “dry powder”. I don’t have links at my fingertips but I have read around these parts that the drag of cash on your overall portfolio usually means this loses out to a strategy of one’s tiny everything in your chosen asset allocation. 

“Time in the market, not market timing”
^^^
Thanks for your comment. Isn't this only true for stock market investing? If i were to want to purchase a different underpriced asset in a downturn, i.e. RE, I'd need more cash on hand?

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #28 on: September 05, 2019, 01:33:27 AM »
I was speaking specifically for stocks, yes.

You ask a really interesting question with respect to RE. I don’t invest in teal estate because I am too lazy, so I don’t really know. It seems more acceptable though to keep cash on hand while you wait for a good deal. I also wonder about timing the real estate market. It seems (sort of) like that is something you could successfully do on a local level as those markets are much less liquid and less rational than a stock market. But again, I am no expert there.

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #29 on: September 05, 2019, 09:37:43 AM »
A benefit of using options as a hedge is that you can set a rule in your IPS to sell your hedge if the underlying falls XX%. Then your rule requires you to go long with the proceeds.

In December 2018, SPY and QQQ fell just over 20% from the peak, forcing me to follow my IPS and sell my greatly appreciated collar options (this was anxiety-provoking because I was switching to an unlimited downside long stock position, but I stuck to my pre-written plan nonetheless.). 2 days later the recovery began as I started applying the proceeds to long positions. By March/April 2019, I was re-establishing my hedges at longer durations than I originally had, except I had a few thousand dollars worth of extra shares for my trouble. I had bought them with the proceeds from selling my hedges.

The thing is, I would have been better off with my strategy compared to only owning stock even if markets never recovered for years. I lowered my cost basis per share, acquired control over more shares, and because my 95% stock portfolio had the volatility of a 70/30 or 60/40 during that bumpy time. Knowing all this helped keep me in the market and executing my IPS even while everyone was shouting recession. The IPS and the options hedge worked together to serve their purpose.

I expect more bumps ahead, so my IPS remains the same. My downside if I am wrong and we have a couple years of bull markets and low volatility is that I will lag the market by about 3% per year. But because I’m running higher on equities than I would be comfortable with unhedged, I’ll still win in that scenario. Game theorists call such situations a “dominant strategy”.

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #30 on: September 05, 2019, 10:03:14 PM »
A benefit of using options as a hedge is that you can set a rule in your IPS to sell your hedge if the underlying falls XX%. Then your rule requires you to go long with the proceeds.

In December 2018, SPY and QQQ fell just over 20% from the peak, forcing me to follow my IPS and sell my greatly appreciated collar options (this was anxiety-provoking because I was switching to an unlimited downside long stock position, but I stuck to my pre-written plan nonetheless.). 2 days later the recovery began as I started applying the proceeds to long positions. By March/April 2019, I was re-establishing my hedges at longer durations than I originally had, except I had a few thousand dollars worth of extra shares for my trouble. I had bought them with the proceeds from selling my hedges.

The thing is, I would have been better off with my strategy compared to only owning stock even if markets never recovered for years. I lowered my cost basis per share, acquired control over more shares, and because my 95% stock portfolio had the volatility of a 70/30 or 60/40 during that bumpy time. Knowing all this helped keep me in the market and executing my IPS even while everyone was shouting recession. The IPS and the options hedge worked together to serve their purpose.

I expect more bumps ahead, so my IPS remains the same. My downside if I am wrong and we have a couple years of bull markets and low volatility is that I will lag the market by about 3% per year. But because I’m running higher on equities than I would be comfortable with unhedged, I’ll still win in that scenario. Game theorists call such situations a “dominant strategy”.

Thanks so much - I apologize, what is an IPS?

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #31 on: September 06, 2019, 01:31:35 AM »
Investment Policy Statement

See what I had written above and check out the Bogleheads wiki page on the subject

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #32 on: September 06, 2019, 01:33:10 AM »
acknowledged - sorry about that.

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #33 on: January 18, 2020, 01:12:11 AM »
Hi all just wanted to let you know that I've stayed course, sold some stock and purchased some others.

My portfolio value is now 635,000! Scary :)

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #34 on: January 20, 2020, 03:57:54 AM »
you could have been asleep at the wheel in 2019 with 100% in VTSAX and return 30.8%...nothing to see here

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #35 on: January 20, 2020, 08:55:15 AM »
you could have been asleep at the wheel in 2019 with 100% in VTSAX and return 30.8%...nothing to see here

Question; when a lot of peeps talk about being diversified in stocks, and MMM points out just tossing everything in VTI or something like that.  Kinda like you did above.  That’s still fine and diversified, right? It’s an index, so I think it’s obviously more safe.  I’d rather do something like this with my stocks to basically hit the cruise control and easy buttons later in life.  (Technically I’m doing some of that now as I have quite a few ducks sitting in VTI already).

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #36 on: January 20, 2020, 08:55:55 AM »
Hi all just wanted to let you know that I've stayed course, sold some stock and purchased some others.

My portfolio value is now 635,000! Scary :)

Very nice.

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #37 on: January 20, 2020, 10:00:55 AM »
you could have been asleep at the wheel in 2019 with 100% in VTSAX and return 30.8%...nothing to see here

I thought you might be correct but it turns out these dates are not tied to my investment dates, so they are a bit unrelated for this specific thread.
On Jan 17 2020, VTSAX closed at 82.18. On the date of my original post, March 05, 2019, VTSAX was worth 70.79. That's 16% growth.

Meanwhile, My stocks on March 05 2019 were worth 468,000, and were 635,000 on Jan 17 2020. That's 35.6% growth. More than double VTSAX.

Not saying I'm any safer than they are, just didn't like the under-researched comment on an otherwise supportive thread. In any event, you gave me a reason to look up VTSAX which I've never done in seriousness before, so: thanks!

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #38 on: January 20, 2020, 02:41:44 PM »
you could have been asleep at the wheel in 2019 with 100% in VTSAX and return 30.8%...nothing to see here

I thought you might be correct but it turns out these dates are not tied to my investment dates, so they are a bit unrelated for this specific thread.
On Jan 17 2020, VTSAX closed at 82.18. On the date of my original post, March 05, 2019, VTSAX was worth 70.79. That's 16% growth.

Meanwhile, My stocks on March 05 2019 were worth 468,000, and were 635,000 on Jan 17 2020. That's 35.6% growth. More than double VTSAX.

Not saying I'm any safer than they are, just didn't like the under-researched comment on an otherwise supportive thread. In any event, you gave me a reason to look up VTSAX which I've never done in seriousness before, so: thanks!
Wow, you still haven't taken to heart the message, have you?

You may have out-earned the stock market for a while, but at a much higher risk. Research Alpha and Beta of investing.

There's a reason very few people have ever beat the stock market index long term.  Even money fund managers who make billions per year can't beat the stock market index year after year.  If you think you can beat the market, I've got some swamp land to sell you in Florida.

If I were you, I'd run, not just walk, to sell out of your individual stocks and move to an index fund.  This is basic finance fundamentals 101.  Historically you will not out perform the market, but you sure as hell will risk your portfolio trying to out earn the market, at many times the risk.

Hopefully this won't fall on deaf ears. 

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #39 on: January 20, 2020, 03:01:31 PM »
you could have been asleep at the wheel in 2019 with 100% in VTSAX and return 30.8%...nothing to see here

I thought you might be correct but it turns out these dates are not tied to my investment dates, so they are a bit unrelated for this specific thread.
On Jan 17 2020, VTSAX closed at 82.18. On the date of my original post, March 05, 2019, VTSAX was worth 70.79. That's 16% growth.

Meanwhile, My stocks on March 05 2019 were worth 468,000, and were 635,000 on Jan 17 2020. That's 35.6% growth. More than double VTSAX.

Not saying I'm any safer than they are, just didn't like the under-researched comment on an otherwise supportive thread. In any event, you gave me a reason to look up VTSAX which I've never done in seriousness before, so: thanks!
Wow, you still haven't taken to heart the message, have you?

You may have out-earned the stock market for a while, but at a much higher risk. Research Alpha and Beta of investing.

There's a reason very few people have ever beat the stock market index long term.  Even money fund managers who make billions per year can't beat the stock market index year after year.  If you think you can beat the market, I've got some swamp land to sell you in Florida.

If I were you, I'd run, not just walk, to sell out of your individual stocks and move to an index fund.  This is basic finance fundamentals 101.  Historically you will not out perform the market, but you sure as hell will risk your portfolio trying to out earn the market, at many times the risk.

Hopefully this won't fall on deaf ears.

Thanks for the facepunch :)

This kind of blind advice (i.e. do this or you will be sorry!) is poor because of many reasons, but in this case: tax strategies. I think your advice is neglecting the fact that I will immediately incur a 33.3% tax on ~300k of gains.

I've been slowly moving to index, but very slowly, so as not to incur unnecessary tax and to not take unnecessary gains. Also, what would consider diversified if not index? Could an individual actually diversify their own portfolio without buying into indexes?

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #40 on: January 20, 2020, 03:10:23 PM »
you could have been asleep at the wheel in 2019 with 100% in VTSAX and return 30.8%...nothing to see here

I thought you might be correct but it turns out these dates are not tied to my investment dates, so they are a bit unrelated for this specific thread.
On Jan 17 2020, VTSAX closed at 82.18. On the date of my original post, March 05, 2019, VTSAX was worth 70.79. That's 16% growth.

Meanwhile, My stocks on March 05 2019 were worth 468,000, and were 635,000 on Jan 17 2020. That's 35.6% growth. More than double VTSAX.

Not saying I'm any safer than they are, just didn't like the under-researched comment on an otherwise supportive thread. In any event, you gave me a reason to look up VTSAX which I've never done in seriousness before, so: thanks!
Wow, you still haven't taken to heart the message, have you?

You may have out-earned the stock market for a while, but at a much higher risk. Research Alpha and Beta of investing.

There's a reason very few people have ever beat the stock market index long term.  Even money fund managers who make billions per year can't beat the stock market index year after year.  If you think you can beat the market, I've got some swamp land to sell you in Florida.

If I were you, I'd run, not just walk, to sell out of your individual stocks and move to an index fund.  This is basic finance fundamentals 101.  Historically you will not out perform the market, but you sure as hell will risk your portfolio trying to out earn the market, at many times the risk.

Hopefully this won't fall on deaf ears.

Thanks for the facepunch :)

This kind of blind advice (i.e. do this or you will be sorry!) is poor because of many reasons, but in this case: tax strategies. I think your advice is neglecting the fact that I will immediately incur a 33.3% tax on ~300k of gains.

I've been slowly moving to index, but very slowly, so as not to incur unnecessary tax and to not take unnecessary gains. Also, what would consider diversified if not index? Could an individual actually diversify their own portfolio without buying into indexes?
33.3% tax is better than a $100k loss if any of the stocks crashes and burns.  There are many ways to diversify, not just stocks.  The easiest is to buy into the index.  You can try to mirror the index on your own but it would take a ton of work.

I also diversify by buying into some international stocks, and also some small cap funds, and a small amount in bonds which increases as I get older.

I'd be grateful for the taxable gain which means I have made money.  The risk of holding on to the select few stocks you have is so high but you seem to be blind to it and only consider the taxable gain.

I had neighbors who lost $1m to Worldcom and Enron.  Their financial advice from a relative was to buy into both as much as possible because both were beating the market at significant rates.  I'm sure they'd love to have a taxable gain than the significant loss they experienced later.  The husband should have been retired by now but holds down 1 full time job and a part time job on the weekends so they can make ends meet.  It's incredibly sad.  He wishes he knew then what he knows now.  Diversify and lower your risk.

Don't let the tax blind you to the high risk you are taking.  You've lucked on so far making a great gain, but would you rather it dip and lose a ton of money so you pay less in taxes?
« Last Edit: January 20, 2020, 03:12:09 PM by ReadyOrNot »

jeroly

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #41 on: January 20, 2020, 03:15:08 PM »
you could have been asleep at the wheel in 2019 with 100% in VTSAX and return 30.8%...nothing to see here

I thought you might be correct but it turns out these dates are not tied to my investment dates, so they are a bit unrelated for this specific thread.
On Jan 17 2020, VTSAX closed at 82.18. On the date of my original post, March 05, 2019, VTSAX was worth 70.79. That's 16% growth.

Meanwhile, My stocks on March 05 2019 were worth 468,000, and were 635,000 on Jan 17 2020. That's 35.6% growth. More than double VTSAX.

Not saying I'm any safer than they are, just didn't like the under-researched comment on an otherwise supportive thread. In any event, you gave me a reason to look up VTSAX which I've never done in seriousness before, so: thanks!
Wow, you still haven't taken to heart the message, have you?

You may have out-earned the stock market for a while, but at a much higher risk. Research Alpha and Beta of investing.

There's a reason very few people have ever beat the stock market index long term.  Even money fund managers who make billions per year can't beat the stock market index year after year.  If you think you can beat the market, I've got some swamp land to sell you in Florida.

If I were you, I'd run, not just walk, to sell out of your individual stocks and move to an index fund.  This is basic finance fundamentals 101.  Historically you will not out perform the market, but you sure as hell will risk your portfolio trying to out earn the market, at many times the risk.

Hopefully this won't fall on deaf ears.
This, plus...

VTSAX throws off dividends that are part of total return but are not included in the price, of about 1.8%. That brings the total return to 18%. (Not a good look to bash someone else for an under-researched comment while simultaneously making an under-researched comment!)

Moreover, if you are adamant about having a tech bias in your investments you could use a tech sector index fund and avoid the risk inherent to stock selection.
From 3/5/19, VITAX returned 36.8%, better than your return with all its small portfolio risk.


Quote
Thanks for the facepunch :)

This kind of blind advice (i.e. do this or you will be sorry!) is poor because of many reasons, but in this case: tax strategies. I think your advice is neglecting the fact that I will immediately incur a 33.3% tax on ~300k of gains.

I've been slowly moving to index, but very slowly, so as not to incur unnecessary tax and to not take unnecessary gains. Also, what would consider diversified if not index? Could an individual actually diversify their own portfolio without buying into indexes?
The fact is that you will have to pay those capital gains taxes at some point along the line (unless you plan to make that part of your estate), and LTCG taxes are likely to go up in the future, so ... better to take the hit now and avoid the high risk inherent in a small portfolio of high beta stocks, IMO.

If you are insistent on diversifying using stocks, you can buy things that are non-tech like utilities, energy, industrials, etc. Berkshire Hathaway gives a good amount of diversification within one stock.

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #42 on: January 20, 2020, 03:32:59 PM »
Quote

VTSAX throws off dividends that are part of total return but are not included in the price, of about 1.8%. That brings the total return to 18%. (Not a good look to bash someone else for an under-researched comment while simultaneously making an under-researched comment!)




Good call. I have had strong dividend payers and have made approx 1.5% based on some trading, so I counted dividends as a wash, but you're right.


Thanks for the advice!

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #43 on: April 22, 2021, 04:01:17 PM »
Well, the stock market has increased my stock portfolio value significantly since this post. By about 120%.

So this panned out (for now), but now I really need to figure out how to diversify. (I didn't sell anything after making this post).

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #44 on: April 22, 2021, 04:34:59 PM »
Congrats on high returns to date!

Do you have RE goals?
If so, what sort of income (amount; any other qualities you wish to name) is needed to achieve them?
Is your total portfolio close to the amount needed?
Are you happy to continue working, or actively desiring the ability for work to be optional?
Is the market's volatility a threat to your FI?
Would you be FI if you liquidated all taxable stocks, paid capital gains and put 100% in VTSAX (or 80% VTSAX, 20% bonds/cash)?
Would you be FI and have some amount left over to continue the adventure of holding individual stocks?

jeroly

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #45 on: April 22, 2021, 04:45:50 PM »
Well, the stock market has increased my stock portfolio value significantly since this post. By about 120%.

So this panned out (for now), but now I really need to figure out how to diversify. (I didn't sell anything after making this post).
...and VITAX and the tech sector overall are up around 95%. So you took on a fair bit of concentration risk in exchange for the opportunity for that extra 25%.

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #46 on: April 22, 2021, 04:57:59 PM »
Well, the stock market has increased my stock portfolio value significantly since this post. By about 120%.

So this panned out (for now), but now I really need to figure out how to diversify. (I didn't sell anything after making this post).
...and VITAX and the tech sector overall are up around 95%. So you took on a fair bit of concentration risk in exchange for the opportunity for that extra 25%.

That is a fair critique!
I'd argue that it would be higher than 25% because of taxes. (i.e. if i sold i would've had a couple hundred k in gains, paid fed + state (cali) taxes, all in all would've taken down my principle by... 28% I believe - then if I reinvested that in VITAX I would've had 95% gains on 72% of the original value.

But yes - risky risky.

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #47 on: April 22, 2021, 05:53:57 PM »
Congrats on high returns to date!

Do you have RE goals?
If so, what sort of income (amount; any other qualities you wish to name) is needed to achieve them?
Is your total portfolio close to the amount needed?
Are you happy to continue working, or actively desiring the ability for work to be optional?
Is the market's volatility a threat to your FI?
Would you be FI if you liquidated all taxable stocks, paid capital gains and put 100% in VTSAX (or 80% VTSAX, 20% bonds/cash)?
Would you be FI and have some amount left over to continue the adventure of holding individual stocks?

Thank you!


Do you have RE goals?
-> Yes. I still want to buy a multi, but I'm stuck in analysis paralysis.

If so, what sort of income (amount; any other qualities you wish to name) is needed to achieve them?
-> I think the biggest barrier to entry for me is down payment. multis in my SF Bay are going for 2-5 million, and i simply can't afford that. I've looked in LCOL areas, but I've been evaluating them by cap rate. I've been told that's wrong by some experienced mentors, but it's hard for me to do it any other way.

Is your total portfolio close to the amount needed?
My FatFire goal is 7 million to maintain my standard of living in the bay area. If i move to a LCOL, i could probably halve it.

Are you happy to continue working, or actively desiring the ability for work to be optional?
I would love work to be optional, but I have no intention of retiring if I ever obtain my FU number.

Is the market's volatility a threat to your FI?
Based on my current layout - yes. Tax law changes + market volatility are a huge threat because I have gained a large nest egg, but no cash flow.

Would you be FI if you liquidated all taxable stocks, paid capital gains and put 100% in VTSAX (or 80% VTSAX, 20% bonds/cash)?
According to my 7M figure, no. My rent alone is 5.5k /mo (which is average in my area).

Would you be FI and have some amount left over to continue the adventure of holding individual stocks?
Yes - because I think based on low bond, CD, and treasury returns, stocks are the only place left for these kinds of returns. (I'm ignoring crypto, i don't like it lol)


BicycleB

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #48 on: April 22, 2021, 06:38:43 PM »

Do you have RE goals?
-> Yes. I still want to buy a multi, but I'm stuck in analysis paralysis.

If so, what sort of income (amount; any other qualities you wish to name) is needed to achieve them?
-> I think the biggest barrier to entry for me is down payment. multis in my SF Bay are going for 2-5 million, and i simply can't afford that. I've looked in LCOL areas, but I've been evaluating them by cap rate. I've been told that's wrong by some experienced mentors, but it's hard for me to do it any other way.


LOL, when I wrote "RE" I meant "retire early"! :)

Chuckles aside, it sounds like you like what you're doing well enough to keep doing it for the foreseeable future. Keep us posted, and best wishes.

i_have_so_much_to_learn

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Re: case study: Almost 500k in stocks... what do i do now?
« Reply #49 on: April 22, 2021, 06:46:02 PM »

Do you have RE goals?
-> Yes. I still want to buy a multi, but I'm stuck in analysis paralysis.

If so, what sort of income (amount; any other qualities you wish to name) is needed to achieve them?
-> I think the biggest barrier to entry for me is down payment. multis in my SF Bay are going for 2-5 million, and i simply can't afford that. I've looked in LCOL areas, but I've been evaluating them by cap rate. I've been told that's wrong by some experienced mentors, but it's hard for me to do it any other way.


LOL. Sorry! I'm so dumb :)

I don't have RE goals necessarily... It would be great to be able to retire in 20 years in my early-mid 50s. However, I should only hit my FU number by 60 if everything goals well (conservatively), and I keep up my saving/investing targets.

LOL, when I wrote "RE" I meant "retire early"! :)

Chuckles aside, it sounds like you like what you're doing well enough to keep doing it for the foreseeable future. Keep us posted, and best wishes.

 

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