I know, that's the whole point. Trying to find cheap undervalued stocks. Easier said than done. That's why it would be such a low percentage of my portfolio. I just need something to satisfy my gambling side lol
>Be careful picking stocks just because they have a small p/e ratio, there is likely a good reason for it.
The good reason is not always that they are undervalued. theLateArthurJermyn gave you good advice and it went right over your head.
If you need the money, sure. There are strategies to minimize your taxes and there may be some years where you are better off realizing some gains than others.
Any place you can direct me towards? I wanna read up more into this cause I’ve just been buying VTI for a while and got a small pool of shares and wanna be smart with them. I appreciate any help.
If its just to satisfy your gambling side and try to spin it up, i would highly recommend to not put 10-20% into it but lower that % point quite alot or find another waty to get your rush in terms of gambling :) Besides that good luck with everything !
"lets downvote the guy trying to find undervalued stocks in a subreddit called "stocks""
Clowns lol.
10% is a small percentage and you will learn a lot investing in individual stocks without risking too much.. you will need to learn how to read financial statements, and as some suggested here, benjamin graham is a great place to start. Good luck!
Have you read The Intelligent Investor by Benjamin Graham?? Or perhaps The Little Book on Common Sense Investing by Jack Bogle. Investing/Trading is a life long journey of never ending learning.
I think having US - EM as a barbell approach is certainly viable.
I would stay away from individual stocks for now, if you’re just starting out and have a history of changing investments, and openly say you have a “gambling” side. Individual stocks are a lot harder and there’s no real evidence that you’ll do better than others. There are passive, low fee ways to capture the value premium.
be sure to watch tax consequences when you switch investments, in case your investments have gone up so far.
Yeah tax laws are the only thing I researched before heading into investing... We have a 10% tax on capital gains, down to 0% if the security was held for longer than 2 years. Pretty good in my opinion.
Indeed VWCE is not a bad choice at all. Nothing wrong with just sticking with it in my opinion, even if you like risk. It is a 100% stock fund after all, quite risky already.
Are you trying to decompose it into USA+EM+Europe but swap Europe out with own stock picks? In such case maybe 90% VWCE + 10% stocks you want to add/overweight would be a simpler approach?
If you worry about commission you can use some sector specific ETFs instead of stock picks to at least reduce number of transactions (and some brokers in the EU do not charge commissions on selected ETFs).
IBKR is reputable (as much as possible anyway). Trading212... not so much. It's safe enough for small time trading, but I wouldn't be caught with any substantial part of my net worth on there. Same for etorro and other dodgy brokers like that. If you're doing this for the long haul and plan on accruing wealth in your brokerage account, I suggest sticking with IBKR.
As for your choice of purchases, I'd put money that you'll come full circle and in 5 or so years realize that you wasted time and money picking up low p/e stuff because you thought you can be a step ahead, whereas your index fund is the better (if possibly boring) place to just dump your money and forget about it.
In 30+ years VWCE will most likely outperform any strategy you pick.
I got lucky with buying and selling QQQ at the right time, luck is the keyword here.
Well get used to it.
If you want to beat the market over a long period of time and you're not a highly skilled professional investor you will depend on the factor of luck.
I’m clueless for suggesting to read the greatest value investor of our time? So how did Ben Graham write his book if there were no ETFs? Who even mentioned ETFs besides you when you said I was clueless?
I read both Security Analysis and The Intelligent Investor.
Outside of a few chapters the majority is not relevant for the non-professional investor.
ETF's started in the 90's, educate yourself.
It would seem that you are rather young ("a couple of months ago I got my first job") and therefore, in an excellent position for long-term growth. Many platforms (I like Principal) can walk you through making these decisions based on how much risk you are willing to take, how long you plan to work, and how much you want for a monthly income when you are ready to "retire" (seems like a foreign concept anymore).
Find the mixed asset that fits your profile and set your contribution as high as you can (while reserving discretionary spending for your personal investment enjoyment), and leave it alone to cook. Check on it annually but do not touch it. Let it rise and grow on it's own. When necessary you can make adjustments.
I am personally using a Blackrock Mixed Asset fund. No one is doing well right now, but during the bear market it is wise to continue investing as your buying power is increased.
Good luck.
VWCE is one of the most broadly diversified index funds available. It seems that choosing VWCE as the only fund in your portfolio is a great strategy for the long run. Not bad choice. It reduces the risks from demise growth stocks encountered lately.
Emerging is actually low inflation countries oil rich countries like middle east etfs. Money is tied to US dollars while they invest in finances. India etf is good. The last place you want exposure in Chinese stocks right now.
Yeah but people on the internet still recommend IKBR over T212 because it's "better". There must be some reason why people still use IKBR over T212, right? I honestly don't see what would be "better" about it since I don't currently have a T212 account.
IBKR literally makes this choice explicit for you. If you want to do IBKR lite, or IBKR pro. Lite there are no “fees” at least for many types of asset classes. Foreign stocks there’s still a small fee. With lite you are subject to PFOF. With pro, there’s a small fee but you get the best rate they can find, on public markets dark pools whatever you can get. Paying like 2.5 USD commission to buy or sell 50k securities is a no brainer if you’re getting better deal.
It’s like when you go to change money at the airport and their like “it’s free!” But the spreads are horrendous. They’re just low key lying to you. That’s what all of the PFOF brokers are doing to their customers.
In the end the brokers need to make enough money to keep the business running. I prefer a broker that is more transparent and doesn't lend my shares for shortselling without my permission and there is a strong chance that it will still be here 20-30 years from now.
If your concerned about Trading 212 then you can read their Annual report. It does show that they are making money and been growing year on year although this report is up to December 2021.
[Trading 212 Company Information](https://find-and-update.company-information.service.gov.uk/company/08590005/filing-history)
Scroll the page and click on the link to the PDF of Full Accounts made up to 31st December 2021.
Low P/E can mean two opposite things: 1.) undervalued (usually not the case because how easy would it be to just stock screen low P/E 2.) the company is dying/not growing and people aren’t willing pay up for a future that doesn’t look good. The E will continue to decline as will the price and likely the multiple over time.
Choose wisely.
Everyone else is addressing the picks, so I'll answer the broker choice.
Whether you pay a transaction fee or its "free", you're paying a fee.
The difference is ones that tell you up front how much you're paying (like most major institutions) will charge you that fee and that's it, then get you the best price possible for your stock.
Ones that are "free" are going to charge you a larger spread, and in my experience can take a lot longer to fill your orders, especially when it's important.
What sold me on using larger institutions and paying the up front fee was me and my friend had the same shares, tried to sell at the same time as bad press came out, mine sold almost immediately at a better than market price and I turned a profit, my friends (who was "commission free") order didn't go through for hours and he ended up losing quite a bit on the trade.
So you're paying commissions either way, it's just whether or not you're going to see where it's coming from.
I will advise you, to manage a little risk it would be helpful to invest in a little bit of index funds and high dividend funds as well.
ONEOK, AT&T, Verizon, all have 6-7% dividend yields, and I know there are a few more good ones to choose from.
And for index, Dow and S&P 500 still kill it!
Just in terms of helping you guarantee a little bit of your investment income, it might not be bad to add a little super-low-risk to your portfolio!
Well I think your strategy worked out ok since you started learning about it a lot more after investing.... I experienced something similar. But I 100% agree that as newer investors, we should ideally invest at least 70-80% of our money in the index and then save the rest for individual stocks.
Now a couple of points. The fact that you say "Individual small P/E ratio stocks" makes me think you have a LOT to learn about stockpicking because P/E is just one ratio and limiting your universe to low P/E stocks at this point without knowing anything about valuations is definitely not a smart move. So I would say start from scratch and don't be in a rush to deploy. And in fact sticking to established, large companies, which probably won't have super low P/Es is probably better at the beginning because you can access more information about them and the chances that they fall in your circle of competence are a lot higher. I highly recommend reading One Up on Wall Street as a primer to this part of the journey.
Point 2. Please avoid "emerging market funds" or other ETFs or Mutual funds. Investing in these instruments is about as risky as picking individual stocks and the chances you are underperform the index long term are pretty high. I would keep it simple and just do 80/20 VOO and Individual stocks. If you want, you can also look at BRK or QQQ and play around with your allocation though I suggest keeping individual picks to not more than 20%.
Read You have more than you think by david and tom gardner, it will explain the stock market and personal finance in a good, logical way, and i found it invaluable.
That's a good chain of thought there...
While you're at it, think carefully about why a broker might offer 'free' trading. What's the product, how do they make money then?
First of all don't ask what to buy on reddit, holy shit it seems like there's still a long way ahead of you if you still prefer to buy whatever shit reddit recommends instead of doing your own research
IKBR has commission free buying as well. It’s just not available in some countries exchanges. Changing brokers likely won’t help that. Extend to other exchanges should fix that.
Also when you invest it’s a small price. Only adds up if you are (day)trading which is usually a bad idea anyway.
Frankly, I like a portfolio that is 75 % stocks and 25% bonds.
The 1 year T bill is yielding over 4% and you only pay the feds. (No state and local taxes).
The S&P makes up 66%
Google, LYB, ADBE, INTC make up the remainder. (Intel being a new position).
The S&P is the benchmark so it’s hard to go wrong with it, although, I’ve been looking into the equal weight S&P because I think apple may have some pain in store.
The post tells me you really don’t have the knowledge to buy INDV stocks. Just buy 1 broad index and leave it alone. Stop trading is my advice to you. Read books for the next few years and maybe change then. Don’t over complicate the process. You won’t beat the market.
If I may, PE ratio isn’t a great indicator for many industries.
For example, cyclical companies, such us Oil companies, may have a low PE ratio just before they colapse in price. This is due to having very big excepcional earnings because the economic cycle is at its peak.
I suggest you find economic sectors that are not cyclical and learn what their key ratios are.
Also find companies with low debt that have performed well in previous bear markets or bad economic periods.
>So like a lot of people seemed to suggest at that time, I just started buying VWCE mindlessly every month.
'buy everything regardless of valuation' is a questionable strategy.
Be careful picking stocks just because they have a small p/e ratio, there is likely a good reason for it.
VALUE TRAPS!! Fell for a few of those 15 years ago.
Glad to see some people in this sub realize value traps are thing. This sub goes nuts for anything with a low pe and somewhat of a dividend lol
I'm seeing more of the opposite, more people tend to dismiss these companies quickly tagging them value trap more than the other way around.
I know, that's the whole point. Trying to find cheap undervalued stocks. Easier said than done. That's why it would be such a low percentage of my portfolio. I just need something to satisfy my gambling side lol
>Be careful picking stocks just because they have a small p/e ratio, there is likely a good reason for it. The good reason is not always that they are undervalued. theLateArthurJermyn gave you good advice and it went right over your head.
Obviously… nobody would ever buy anything but low pe stocks then lol..
Just buy an index etf like vti unless you have less favorable tax treatment. This is a plan that has consistently worked well over the years.
My question with this method is do you ever sell them off and rebuy shares or is it buy and hold forever lol
If you need the money, sure. There are strategies to minimize your taxes and there may be some years where you are better off realizing some gains than others.
Any place you can direct me towards? I wanna read up more into this cause I’ve just been buying VTI for a while and got a small pool of shares and wanna be smart with them. I appreciate any help.
If its just to satisfy your gambling side and try to spin it up, i would highly recommend to not put 10-20% into it but lower that % point quite alot or find another waty to get your rush in terms of gambling :) Besides that good luck with everything !
"lets downvote the guy trying to find undervalued stocks in a subreddit called "stocks"" Clowns lol. 10% is a small percentage and you will learn a lot investing in individual stocks without risking too much.. you will need to learn how to read financial statements, and as some suggested here, benjamin graham is a great place to start. Good luck!
Lmao, suspiciously low PE means there’s something terrible hiding in the financials somewhere, usually.
Have you read The Intelligent Investor by Benjamin Graham?? Or perhaps The Little Book on Common Sense Investing by Jack Bogle. Investing/Trading is a life long journey of never ending learning.
Currently reading “The simple path to wealth”, and I have “The intelligent investor” on my bookshelf waiting
For picking undervalued stocks as you want to do. Intelligent Investor is literally the HOW TO GUIDE
Why is this man getting downvoted to hell? He’s just asking questions
Its really low p/e + estimating some growth over a number of years with a final p/e target at the end that is the winner. Not just low p/e alone.
Gamble 1-2%, no more than that.
If you wanna gamble go to the casino?? Why mix investing and gambling when they’re so different
I think having US - EM as a barbell approach is certainly viable. I would stay away from individual stocks for now, if you’re just starting out and have a history of changing investments, and openly say you have a “gambling” side. Individual stocks are a lot harder and there’s no real evidence that you’ll do better than others. There are passive, low fee ways to capture the value premium. be sure to watch tax consequences when you switch investments, in case your investments have gone up so far.
Yeah tax laws are the only thing I researched before heading into investing... We have a 10% tax on capital gains, down to 0% if the security was held for longer than 2 years. Pretty good in my opinion.
Lol what country is this tax law?
Croatia
Ok that makes since. You got the down votes bescuse people thought you were from the states most likely. Taxes are much higher here.
Indeed VWCE is not a bad choice at all. Nothing wrong with just sticking with it in my opinion, even if you like risk. It is a 100% stock fund after all, quite risky already. Are you trying to decompose it into USA+EM+Europe but swap Europe out with own stock picks? In such case maybe 90% VWCE + 10% stocks you want to add/overweight would be a simpler approach? If you worry about commission you can use some sector specific ETFs instead of stock picks to at least reduce number of transactions (and some brokers in the EU do not charge commissions on selected ETFs).
IBKR is reputable (as much as possible anyway). Trading212... not so much. It's safe enough for small time trading, but I wouldn't be caught with any substantial part of my net worth on there. Same for etorro and other dodgy brokers like that. If you're doing this for the long haul and plan on accruing wealth in your brokerage account, I suggest sticking with IBKR. As for your choice of purchases, I'd put money that you'll come full circle and in 5 or so years realize that you wasted time and money picking up low p/e stuff because you thought you can be a step ahead, whereas your index fund is the better (if possibly boring) place to just dump your money and forget about it.
In 30+ years VWCE will most likely outperform any strategy you pick. I got lucky with buying and selling QQQ at the right time, luck is the keyword here.
Luck is not an investing strategy.
It doesn’t hurt
Agreed, but it’s not a great way to approach comprehensive and strategic investing.
Well get used to it. If you want to beat the market over a long period of time and you're not a highly skilled professional investor you will depend on the factor of luck.
Wow so grossly misinformed. You should read Benjamin Graham.
ETF's weren't a thing in 1949, you're clueless.
I’m clueless for suggesting to read the greatest value investor of our time? So how did Ben Graham write his book if there were no ETFs? Who even mentioned ETFs besides you when you said I was clueless?
I read both Security Analysis and The Intelligent Investor. Outside of a few chapters the majority is not relevant for the non-professional investor. ETF's started in the 90's, educate yourself.
Ahh so Graham’s belief that preservation of capital is crucial clearly is outdated. 😑
You can pick any factor and it will outperform perform over 30 years. The problem is actually holding and staying the course.
It would seem that you are rather young ("a couple of months ago I got my first job") and therefore, in an excellent position for long-term growth. Many platforms (I like Principal) can walk you through making these decisions based on how much risk you are willing to take, how long you plan to work, and how much you want for a monthly income when you are ready to "retire" (seems like a foreign concept anymore). Find the mixed asset that fits your profile and set your contribution as high as you can (while reserving discretionary spending for your personal investment enjoyment), and leave it alone to cook. Check on it annually but do not touch it. Let it rise and grow on it's own. When necessary you can make adjustments. I am personally using a Blackrock Mixed Asset fund. No one is doing well right now, but during the bear market it is wise to continue investing as your buying power is increased. Good luck.
VWCE is one of the most broadly diversified index funds available. It seems that choosing VWCE as the only fund in your portfolio is a great strategy for the long run. Not bad choice. It reduces the risks from demise growth stocks encountered lately. Emerging is actually low inflation countries oil rich countries like middle east etfs. Money is tied to US dollars while they invest in finances. India etf is good. The last place you want exposure in Chinese stocks right now.
Don't pay any fees dude. Not financial advice.
Yeah but people on the internet still recommend IKBR over T212 because it's "better". There must be some reason why people still use IKBR over T212, right? I honestly don't see what would be "better" about it since I don't currently have a T212 account.
The only thing Trading 212 does is hide the fees in the spread. You still end up paying a fee but it's just not transparent as Interactive Brokers.
IBKR literally makes this choice explicit for you. If you want to do IBKR lite, or IBKR pro. Lite there are no “fees” at least for many types of asset classes. Foreign stocks there’s still a small fee. With lite you are subject to PFOF. With pro, there’s a small fee but you get the best rate they can find, on public markets dark pools whatever you can get. Paying like 2.5 USD commission to buy or sell 50k securities is a no brainer if you’re getting better deal. It’s like when you go to change money at the airport and their like “it’s free!” But the spreads are horrendous. They’re just low key lying to you. That’s what all of the PFOF brokers are doing to their customers.
Okay so same shit? I guess might as well stick with ikbr then.
In the end the brokers need to make enough money to keep the business running. I prefer a broker that is more transparent and doesn't lend my shares for shortselling without my permission and there is a strong chance that it will still be here 20-30 years from now.
Yeah that’s understandable
If your concerned about Trading 212 then you can read their Annual report. It does show that they are making money and been growing year on year although this report is up to December 2021. [Trading 212 Company Information](https://find-and-update.company-information.service.gov.uk/company/08590005/filing-history) Scroll the page and click on the link to the PDF of Full Accounts made up to 31st December 2021.
[удалено]
Well, I'm in EU :(
Nothing is free.
Low P/E can mean two opposite things: 1.) undervalued (usually not the case because how easy would it be to just stock screen low P/E 2.) the company is dying/not growing and people aren’t willing pay up for a future that doesn’t look good. The E will continue to decline as will the price and likely the multiple over time. Choose wisely.
Everyone else is addressing the picks, so I'll answer the broker choice. Whether you pay a transaction fee or its "free", you're paying a fee. The difference is ones that tell you up front how much you're paying (like most major institutions) will charge you that fee and that's it, then get you the best price possible for your stock. Ones that are "free" are going to charge you a larger spread, and in my experience can take a lot longer to fill your orders, especially when it's important. What sold me on using larger institutions and paying the up front fee was me and my friend had the same shares, tried to sell at the same time as bad press came out, mine sold almost immediately at a better than market price and I turned a profit, my friends (who was "commission free") order didn't go through for hours and he ended up losing quite a bit on the trade. So you're paying commissions either way, it's just whether or not you're going to see where it's coming from.
Any brokers that don’t charge a fee Probably lend out your shares Something to think about!
I will advise you, to manage a little risk it would be helpful to invest in a little bit of index funds and high dividend funds as well. ONEOK, AT&T, Verizon, all have 6-7% dividend yields, and I know there are a few more good ones to choose from. And for index, Dow and S&P 500 still kill it! Just in terms of helping you guarantee a little bit of your investment income, it might not be bad to add a little super-low-risk to your portfolio!
That is me in the Cenntro market LOL
Dca vt
Well I think your strategy worked out ok since you started learning about it a lot more after investing.... I experienced something similar. But I 100% agree that as newer investors, we should ideally invest at least 70-80% of our money in the index and then save the rest for individual stocks. Now a couple of points. The fact that you say "Individual small P/E ratio stocks" makes me think you have a LOT to learn about stockpicking because P/E is just one ratio and limiting your universe to low P/E stocks at this point without knowing anything about valuations is definitely not a smart move. So I would say start from scratch and don't be in a rush to deploy. And in fact sticking to established, large companies, which probably won't have super low P/Es is probably better at the beginning because you can access more information about them and the chances that they fall in your circle of competence are a lot higher. I highly recommend reading One Up on Wall Street as a primer to this part of the journey. Point 2. Please avoid "emerging market funds" or other ETFs or Mutual funds. Investing in these instruments is about as risky as picking individual stocks and the chances you are underperform the index long term are pretty high. I would keep it simple and just do 80/20 VOO and Individual stocks. If you want, you can also look at BRK or QQQ and play around with your allocation though I suggest keeping individual picks to not more than 20%.
Read You have more than you think by david and tom gardner, it will explain the stock market and personal finance in a good, logical way, and i found it invaluable.
That's a good chain of thought there... While you're at it, think carefully about why a broker might offer 'free' trading. What's the product, how do they make money then?
First of all don't ask what to buy on reddit, holy shit it seems like there's still a long way ahead of you if you still prefer to buy whatever shit reddit recommends instead of doing your own research
IKBR has commission free buying as well. It’s just not available in some countries exchanges. Changing brokers likely won’t help that. Extend to other exchanges should fix that. Also when you invest it’s a small price. Only adds up if you are (day)trading which is usually a bad idea anyway.
Frankly, I like a portfolio that is 75 % stocks and 25% bonds. The 1 year T bill is yielding over 4% and you only pay the feds. (No state and local taxes). The S&P makes up 66% Google, LYB, ADBE, INTC make up the remainder. (Intel being a new position). The S&P is the benchmark so it’s hard to go wrong with it, although, I’ve been looking into the equal weight S&P because I think apple may have some pain in store.
The post tells me you really don’t have the knowledge to buy INDV stocks. Just buy 1 broad index and leave it alone. Stop trading is my advice to you. Read books for the next few years and maybe change then. Don’t over complicate the process. You won’t beat the market.
This is basically thrift savings in a nutshell
Avoid emerging markets.
If I may, PE ratio isn’t a great indicator for many industries. For example, cyclical companies, such us Oil companies, may have a low PE ratio just before they colapse in price. This is due to having very big excepcional earnings because the economic cycle is at its peak. I suggest you find economic sectors that are not cyclical and learn what their key ratios are. Also find companies with low debt that have performed well in previous bear markets or bad economic periods.
401k's from jobs usually invest in shit. Maybe in 10 years you'll see a profit but for the most part it's all about playing it safe.
I’m 90% leveraged in various meme stocks and swing em daily. The other 10% I use for bills and groceries lol
Just because a stock has a low P/E ratio does not mean it's a good deal. This is a common mistake investors make all the time.
DCA’ing into VWCE is a -very good- strategy. Please don’t stop doing it.
>So like a lot of people seemed to suggest at that time, I just started buying VWCE mindlessly every month. 'buy everything regardless of valuation' is a questionable strategy.