Joe Biden's economy, ladies & gentlemen. This is what happens when the government gives out trillions in free money and causes runaway long term inflation for years.
Most banks hold a lot of government bonds. Bonds pay a fixed interest rate. When interest rates go up, the value of bonds drops a lot because why would anyone want to pay a lot of money to receive lower than market interest?
This is why SVB went under: "Silicon Valley Bank sold on Wednesday a $21 billion bond portfolio consisting mostly of U.S. Treasuries. The portfolio was yielding it an average 1.79%, far below the current 10-year Treasury yield of around 3.9%. This forced SVB to recognize a $1.8 billion loss"
It was 100% caused by inflation destroying the value of long term US Treasuries. There is no such thing as free money. That $7 trillion in extra spending Joe Biden dumped on the economy had to come from somewhere, and the bill is coming due.
Now that SVB failed, everyone is looking for which other banks might have the same vulnerability, and pulling their money out.
Because I trade only in dividend paying stocks, I was worried about a few who might have been stupid enough to use SVB's client's processing. My stocks started out at -6, dropped to -26, but is currently only -$10. So, considering the blood bath of last friday/week, my stocks are down $100 in an account with $1500 in it. I would be eagerly awaiting more failures so I could watch it all disappear, but I invested in shipping, energy, and real estate, not banks and tech like some newb bitch.
So, any chance of an ELI5 post, teaching everyone how to do trading the smart way? :P Or, a decent website that you would recommend for an intro? Most of what I've seen has been "go to Vanguard's website, dey da bestest!"
Keep it cheap, keep it simple, don't bet on the stocks to go up, don't do options or calls, only invest money you can afford to lose, only put money in stocks you know a bit about the industry the company operates in, pay attention to the news in general (don't read the stories on the stock itself, read what they say about the industry: aka, if you invest in shipping, pay attention to stories that complain about shipping delays from people who buy shit from overseas and to stories about crude oil prices.) Don't invest in tech, finance industry, MSM, and other woke industries, their money comes from idiots tossing money their way and hedgefunds. Since hedgefunds are losing money, it's the idiots who are about to get fleeced as those woke companies go under.
All your stock needs to be focused on long-term holdings. If you think a company will be around for a while, that might be something you want to invest in. A bad quarter or a bad couple years should not be able to kill the company.
Never expect to make money. It's always a pleasant surprise. The only way to actually guaranteed to make money is U.S. government bonds of the series I or EE, which actually increases in value through interest rates on the money you loaned the government, and it is always above inflation (what you put in will always be worth more than the value of inflation.)
Fidelity.com. It's my best offering. TD Ameritrade, Etrade, Robinhood, all the others, fees, fees, fees, sucker's bets, no information, bankruptcy waiting to happen.
Never expect to make money. It's always a pleasant surprise. The only way to actually guaranteed to make money is U.S. government bonds of the series I or EE, which actually increases in value through interest rates on the money you loaned the government, and it is always above inflation (what you put in will always be worth more than the value of inflation.)
The people telling you to use Vanguard are probably telling you to invest in Index Funds because that's what they're known for. But every retail brokerage has them (I use Fidelity which I like). The idea is that instead of trying to pick winners and losers you just invest in the whole market and take the good with the bad. If "line on TV go up" then you just made money; if "line on TV go down" then you just lost money. On a long enough timescale the line tends to go up. The main risk is that "line on TV go down" at the same time as you need your money (maybe because you just lost your job because "line on TV go down").
It's what I do. I don't know if it's smart or stupid, but it's definitely boring. Which when it comes to my money I appreciate.
Me too, but a year or two. Some stopped paying dividends to protect their business and pay off debts, some lowered it for the same reason. I did buy 50 shares of a Florida based insurance company because it was historically a reliable dividend, with stock well above what I paid for it. IAN last year wiped out their dividend and their stock price, but the price is back up after the last earnings report. Now is the time for buying of those stocks. Their prices are down but their industry is strong.
Oh, it's not just tankers. During covid, many shipping companies sold off their older and mid-sized container ships for scrap because fuel and shipping prices.
Joe Biden's economy, ladies & gentlemen. This is what happens when the government gives out trillions in free money and causes runaway long term inflation for years.
Most banks hold a lot of government bonds. Bonds pay a fixed interest rate. When interest rates go up, the value of bonds drops a lot because why would anyone want to pay a lot of money to receive lower than market interest?
This is why SVB went under: "Silicon Valley Bank sold on Wednesday a $21 billion bond portfolio consisting mostly of U.S. Treasuries. The portfolio was yielding it an average 1.79%, far below the current 10-year Treasury yield of around 3.9%. This forced SVB to recognize a $1.8 billion loss"
It was 100% caused by inflation destroying the value of long term US Treasuries. There is no such thing as free money. That $7 trillion in extra spending Joe Biden dumped on the economy had to come from somewhere, and the bill is coming due.
Now that SVB failed, everyone is looking for which other banks might have the same vulnerability, and pulling their money out.
Because I trade only in dividend paying stocks, I was worried about a few who might have been stupid enough to use SVB's client's processing. My stocks started out at -6, dropped to -26, but is currently only -$10. So, considering the blood bath of last friday/week, my stocks are down $100 in an account with $1500 in it. I would be eagerly awaiting more failures so I could watch it all disappear, but I invested in shipping, energy, and real estate, not banks and tech like some newb bitch.
So, any chance of an ELI5 post, teaching everyone how to do trading the smart way? :P Or, a decent website that you would recommend for an intro? Most of what I've seen has been "go to Vanguard's website, dey da bestest!"
Keep it cheap, keep it simple, don't bet on the stocks to go up, don't do options or calls, only invest money you can afford to lose, only put money in stocks you know a bit about the industry the company operates in, pay attention to the news in general (don't read the stories on the stock itself, read what they say about the industry: aka, if you invest in shipping, pay attention to stories that complain about shipping delays from people who buy shit from overseas and to stories about crude oil prices.) Don't invest in tech, finance industry, MSM, and other woke industries, their money comes from idiots tossing money their way and hedgefunds. Since hedgefunds are losing money, it's the idiots who are about to get fleeced as those woke companies go under.
All your stock needs to be focused on long-term holdings. If you think a company will be around for a while, that might be something you want to invest in. A bad quarter or a bad couple years should not be able to kill the company.
Never expect to make money. It's always a pleasant surprise. The only way to actually guaranteed to make money is U.S. government bonds of the series I or EE, which actually increases in value through interest rates on the money you loaned the government, and it is always above inflation (what you put in will always be worth more than the value of inflation.)
Fidelity.com. It's my best offering. TD Ameritrade, Etrade, Robinhood, all the others, fees, fees, fees, sucker's bets, no information, bankruptcy waiting to happen.
Above officially declared inflation*
Forgot the FTFY.
I thought of that, but this was me trying to keep it succinct.
The people telling you to use Vanguard are probably telling you to invest in Index Funds because that's what they're known for. But every retail brokerage has them (I use Fidelity which I like). The idea is that instead of trying to pick winners and losers you just invest in the whole market and take the good with the bad. If "line on TV go up" then you just made money; if "line on TV go down" then you just lost money. On a long enough timescale the line tends to go up. The main risk is that "line on TV go down" at the same time as you need your money (maybe because you just lost your job because "line on TV go down").
It's what I do. I don't know if it's smart or stupid, but it's definitely boring. Which when it comes to my money I appreciate.
Me too, but a year or two. Some stopped paying dividends to protect their business and pay off debts, some lowered it for the same reason. I did buy 50 shares of a Florida based insurance company because it was historically a reliable dividend, with stock well above what I paid for it. IAN last year wiped out their dividend and their stock price, but the price is back up after the last earnings report. Now is the time for buying of those stocks. Their prices are down but their industry is strong.
Oh, it's not just tankers. During covid, many shipping companies sold off their older and mid-sized container ships for scrap because fuel and shipping prices.
I bought the stock ZIM, 5 shares, at $20-$22. The dividend is now $6.40 a share.
Part of the reason why I bought into Zim was because I knew the Israelis knew how to keep a business profitable.
All last year and this quarter, so far.
I knew they'd make at least 45 cents for this dividend boy am I glad that it was more than that.
Looks like the party is just getting started: https://twitter.com/EricBalchunas/status/1635277429932699650?s=20 (trading halts for quite a few banks)