Gyroscopic Investing

It has been brought to my attention that the 6 FANG+ stocks make up 19% of the index cap.
Yikes.

Has that not always been the case for the top 5 or 6 stocks in the S&P500? I.e., did market cap used to be less concentrated at the top?

You know what is amazing? How close market cap SPX funds and equal weight SPX funds like RSP are in performance over the last year, even though the latter has 1/500 slices of every company in the SPX. It's downright eerie.

about 50 stocks dominate the entire wilshire 5000 , those 50 stocks can be extremely powerful and dominating .

You still get good diversity with an index fund, but I wonder how much better than buying and holding a basket of stocks it really is. In the new era of zero commissions, this might be worth a rethink. You'd want to buy and hold as opposed to constantly rebalance though. I bet we will start seeing some opinion pieces soon on this.

sophie wrote: ↑Wed Oct 30, 2019 8:52 am You still get good diversity with an index fund, but I wonder how much better than buying and holding a basket of stocks it really is. In the new era of zero commissions, this might be worth a rethink. You'd want to buy and hold as opposed to constantly rebalance though. I bet we will start seeing some opinion pieces soon on this.

Or at least move to an equal weight fund. GSEW has 500 stocks equal weighted for .09 expense ratio.

jalanlong wrote: ↑Wed Oct 30, 2019 9:20 am

sophie wrote: ↑Wed Oct 30, 2019 8:52 am You still get good diversity with an index fund, but I wonder how much better than buying and holding a basket of stocks it really is. In the new era of zero commissions, this might be worth a rethink. You'd want to buy and hold as opposed to constantly rebalance though. I bet we will start seeing some opinion pieces soon on this.

Or at least move to an equal weight fund. GSEW has 500 stocks equal weighted for .09 expense ratio.

Wow, thanks, GSEW seems to out-gun RSP.

sophie wrote: ↑Wed Oct 30, 2019 8:52 am You still get good diversity with an index fund, but I wonder how much better than buying and holding a basket of stocks it really is. In the new era of zero commissions, this might be worth a rethink. You'd want to buy and hold as opposed to constantly rebalance though. I bet we will start seeing some opinion pieces soon on this.

I subscribe to a lot of different financial boards and in the last year I have seen more and more people who seem to be on board with that. Perhaps it is the amount of brokers now that do not charge commissions and allow fractional share purchases.

A very popular trend I see is people buying 30-50 dividend growth stocks and just having that and cash, no bonds or gold. They say they ignore the market price fluctuations and just look at the (hopefully) increasing stream of dividends and are just creating their own cash flow/pension for later in life.

No concerns that all those dividends create taxes?

Vinny

jalanlong wrote: ↑Wed Oct 30, 2019 10:08 am

sophie wrote: ↑Wed Oct 30, 2019 8:52 am You still get good diversity with an index fund, but I wonder how much better than buying and holding a basket of stocks it really is. In the new era of zero commissions, this might be worth a rethink. You'd want to buy and hold as opposed to constantly rebalance though. I bet we will start seeing some opinion pieces soon on this.

I subscribe to a lot of different financial boards and in the last year I have seen more and more people who seem to be on board with that. Perhaps it is the amount of brokers now that do not charge commissions and allow fractional share purchases.

A very popular trend I see is people buying 30-50 dividend growth stocks and just having that and cash, no bonds or gold. They say they ignore the market price fluctuations and just look at the (hopefully) increasing stream of dividends and are just creating their own cash flow/pension for later in life.

vnatale wrote: ↑Wed Oct 30, 2019 10:13 am No concerns that all those dividends create taxes?

Vinny

jalanlong wrote: ↑Wed Oct 30, 2019 10:08 am

sophie wrote: ↑Wed Oct 30, 2019 8:52 am You still get good diversity with an index fund, but I wonder how much better than buying and holding a basket of stocks it really is. In the new era of zero commissions, this might be worth a rethink. You'd want to buy and hold as opposed to constantly rebalance though. I bet we will start seeing some opinion pieces soon on this.

I subscribe to a lot of different financial boards and in the last year I have seen more and more people who seem to be on board with that. Perhaps it is the amount of brokers now that do not charge commissions and allow fractional share purchases.

A very popular trend I see is people buying 30-50 dividend growth stocks and just having that and cash, no bonds or gold. They say they ignore the market price fluctuations and just look at the (hopefully) increasing stream of dividends and are just creating their own cash flow/pension for later in life.

Vinny, have you noticed that nobody else here does top-posting, and when you do, it makes conversations difficult to read?

Had not noticed.

However, my preference is that all did the same as I do since I view the latest as new material and the prior as footnotes.

Part of my being in independent in many ways.

Vinny

Xan wrote: ↑Wed Oct 30, 2019 10:16 am

vnatale wrote: ↑Wed Oct 30, 2019 10:13 am No concerns that all those dividends create taxes?

Vinny

jalanlong wrote: ↑Wed Oct 30, 2019 10:08 am

I subscribe to a lot of different financial boards and in the last year I have seen more and more people who seem to be on board with that. Perhaps it is the amount of brokers now that do not charge commissions and allow fractional share purchases.

A very popular trend I see is people buying 30-50 dividend growth stocks and just having that and cash, no bonds or gold. They say they ignore the market price fluctuations and just look at the (hopefully) increasing stream of dividends and are just creating their own cash flow/pension for later in life.

Vinny, have you noticed that nobody else here does top-posting, and when you do, it makes conversations difficult to read?

vnatale wrote: ↑Wed Oct 30, 2019 10:26 am Had not noticed.

However, my preference is that all did the same as I do since I view the latest as new material and the prior as footnotes.

Part of my being in independent in many ways.

Vinny

Xan wrote: ↑Wed Oct 30, 2019 10:16 am

vnatale wrote: ↑Wed Oct 30, 2019 10:13 am No concerns that all those dividends create taxes?

Vinny

Vinny, have you noticed that nobody else here does top-posting, and when you do, it makes conversations difficult to read?

I don't think it's realistic to expect everyone else to change, but if you're okay with people having trouble reading posts you participate in, okay by me.

I'm not sure it qualifies as "independent" if you want everybody else to do things the way you do them, though.

The quoted bits are the part being replied to, so it's like having a recap of last week's episode at the start of the new episode instead of after it.

I Shrugged wrote: ↑Tue Oct 29, 2019 6:50 pm It has been brought to my attention that the 6 FANG+ stocks make up 19% of the index cap.
Yikes.

You have two choices, I Shrugged: buy the broad market (well, S&P 500 isn't bad, or VTSAX (most of the stock market) or build a time machine. It's usually a few stocks that carry the gains (and the losses), but it's not easy to find them early on.

Top-posting: I'm guilty of that, too, although I usually only do it if I'm quoting a post immediately above.

Xan wrote: ↑Wed Oct 30, 2019 10:44 am

vnatale wrote: ↑Wed Oct 30, 2019 10:26 am Had not noticed.

However, my preference is that all did the same as I do since I view the latest as new material and the prior as footnotes.

Part of my being in independent in many ways.

Vinny

Xan wrote: ↑Wed Oct 30, 2019 10:16 am

Vinny, have you noticed that nobody else here does top-posting, and when you do, it makes conversations difficult to read?

I don't think it's realistic to expect everyone else to change, but if you're okay with people having trouble reading posts you participate in, okay by me.

I'm not sure it qualifies as "independent" if you want everybody else to do things the way you do them, though.

The quoted bits are the part being replied to, so it's like having a recap of last week's episode at the start of the new episode instead of after it.

We'll see if this works.

But an expanded "independent" answer. My "independent" answer was not meant to say "and, I expect others to do it my way." It meant I independently decide for myself. And, that generally means I also think it's a better way for others.

I've been in my email discussion groups. And, over the decades there have been the top versus the bottom debate.

My reasons for top:

1) I've read so many emails that are long, long, long, long. It takes me forever to get to the bottom of them, scrolling through things I've already seen and read, just so I can read someone writing two words like, "I agree."

2) Of course, it will also take me that same amount of time to get to the bottom for me to write anything.

3) I prefer to immediately see the new on top. In regards to prior discussion, a. I can infer what is on the bottom from the context of the fresh response b. If I've been actively reading the discussion, I remember what is below. c. If a. and b. don't work, it's all there on the bottom for me to find.

4) When I think of the emails (both personal and business) it does seem that most of the world has moved to responded on the top?

Vinny

I'm going to check with my trading coach (Novell) concerning MOC orders and ETFs with low volumes. I've heard Meb Faber discussing this topic, and his contention is that as long as the underlying securities are liquid, the ETF will be also. Of course, spreads will be larger, but I'm thinking MOC orders would eliminate all concerns about spreads, you just get the underlying at the close.

"Hey Peter,

No MOC orders don't get around the issues associated with low volume if your order is large enough to move the price at the close. Happens very very rarely but it can happen.

Paul"

I need to be educated on the issue of low volumes but if I am going to buy and hold this ETF in my PP for many, many years (I hope), what is the issue for me purchasing this instead of a higher volume etf?

jalanlong wrote: ↑Thu Oct 31, 2019 8:58 am I need to be educated on the issue of low volumes but if I am going to buy and hold this ETF in my PP for many, many years (I hope), what is the issue for me purchasing this instead of a higher volume etf?

For buy and hold, definitely choose lower expense ratios. You just don't want a tiny $20 million ETF which is on the Death Watch List.

What better argument for equal-weighting in your stock allocation? (Lisa A. always has the best tweets).

Seems like a good argument for holding some Apple and Microsoft.

dualstow wrote: ↑Sun Nov 24, 2019 1:05 pm Seems like a good argument for holding some Apple and Microsoft.

Apple and Microsoft as the VP then? Or Apple as Core?

ochotona wrote: ↑Sun Nov 24, 2019 1:27 pm

dualstow wrote: ↑Sun Nov 24, 2019 1:05 pm Seems like a good argument for holding some Apple and Microsoft.

Apple and Microsoft as the VP then? Or Apple as Core?

Apple core has a ring to it. :-)
I hold both in my vp but certainly not as the vp. You know, after a cup of coffee you can read up on virtually any company and it looks good. Dangerous.

The problem with individual stocks is you not only have to know all about the company you bought but you better know what the competition has on their drawing board

mathjak107 wrote: ↑Sun Nov 24, 2019 5:31 pm The problem with individual stocks is you not only have to know all about the company you bought but you better know what the competition has on their drawing board

Which is of course impossible to know.

Exactly .....so individual stocks take on a whole other level of risk that broad based funds don’t have ...individual company risk is a biggie

What really strikes me as interesting is how many different schools of thought there really are in investing.

The efficient market guys; the value investing guys; the factor tilters; the stock pickers; they talk past each other almost as if they're speaking a totally different language.

A basic disagreement on the realities of how the market functions -- the axioms, if you will -- lead to these totally different world views on how to deploy your capital.