Author Topic: Diversifying the "spend" portfolio - Lithium Battery Industry  (Read 518 times)

wildatheart

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Diversifying the "spend" portfolio - Lithium Battery Industry
« on: November 29, 2020, 07:33:31 PM »
at 53, we FIRED in March 2020. We're using 21% of our net worth to fund our years before 401K years. We keep that in tech-heavy index funds. But, as many have noted, institutional investment in the market is trying month after month to diversify out of tech and into other areas since late July 2020.
So, as a believer and consumer of Solar and the US election indicating a much more anti-fossil fuels attitude, and the electric car industry, headed by China, going through the already shattered ceiling ... I thought it might be a good idea to invest in Lithium battery technology.
So, I've started taking whatever tax-loss harvests I can this year and putting it into the ETF LIT. LIT reportedly invests in the entire Lithium battery supply chain, from mining to manufacturing to POS.
But ... I got burned by USO.
Does anyone have any dirt on LIT? Is this a poor strategy?
Thanks.


cool7hand

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Re: Diversifying the "spend" portfolio - Lithium Battery Industry
« Reply #1 on: November 30, 2020, 05:39:26 AM »
There's no one way to skin a cat. That said, I generally avoid focusing on sectors with anything but play money because, for me, it's just a shill for market timing. Best of luck to you.

Retire-Canada

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Re: Diversifying the "spend" portfolio - Lithium Battery Industry
« Reply #2 on: November 30, 2020, 07:09:19 AM »
Is this a poor strategy?

Chasing returns with your investments isn't a strategy I'd follow. I'm sticking with a globally diversified broad market index fund portfolio. That way I don't have to pick the winners and losers.


wildatheart

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Re: Diversifying the "spend" portfolio - Lithium Battery Industry
« Reply #3 on: November 30, 2020, 07:23:37 AM »
There's no one way to skin a cat. That said, I generally avoid focusing on sectors with anything but play money because, for me, it's just a shill for market timing. Best of luck to you.

You're right. That's a great way to put it. It is a shill for market timing.

MustacheAndaHalf

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Re: Diversifying the "spend" portfolio - Lithium Battery Industry
« Reply #4 on: November 30, 2020, 07:35:34 AM »
Global X Lithium ETF (LIT) gained +96% year to date.  Could that be influencing your thinking? 

Two years ago, on Nov 30, this stock opened at $39.73 ... and a year ago on Nov 30, it opened at $31.24.  You could easily lose 21%, like from 2017 to 2018, rather than gain +111% in 12 months.  I suspect it's success is linked to Tesla's growth, so if you're worried about Tesla, wouldn't the same risk apply to a lithium battery ETF?

This seems like something you would do with money you don't need for living expenses and retirement.

wildatheart

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Re: Diversifying the "spend" portfolio - Lithium Battery Industry
« Reply #5 on: December 03, 2020, 06:50:57 PM »
"Need" is a strong word for the amount I'm throwing in there. But, it's not just Tesla. China has a goal for 2025 for electric cars that is subsidized by the government and I would hope the US does something similar. This one is both emotional and prospective. It is the most likely base industry that goes "to ground" (no pun intended) that will grow as a result of all electric vehicle growth and I enjoy the idea I am funding a part of what I believe is a solution to fossil fuel spending.

MustacheAndaHalf

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Re: Diversifying the "spend" portfolio - Lithium Battery Industry
« Reply #6 on: December 04, 2020, 06:24:55 AM »
... This seems like something you would do with money you don't need for living expenses and retirement.
"Need" is a strong word for the amount I'm throwing in there ...
I don't know your situation, but if your assets aren't enough to retire, this seems like gambling on your ability to retire.  If you have more than enough to retire, that's different.