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What does beat the market really mean, anyways?
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Better than VTI? VTSAX? Better than SPY or QQQ.
It seems that any of these are varying degrees of risk & performance, if held long enough.
Top Comment: "Beat the market" is indeed used to mean multiple things: Sp500, total US stock market, or global stock market. Generally, I use "beat the market" to mean "the broadly diversified benchmark most similar to the fund we are referring to."
How many of your actually beat the market, and what's your methodology?
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If you do actually beat the market, how long have you been doing so, and by how much? And what's your methodology.
I'll go first. I've averaged 15.4% annualized returns since 2008. I follow mostly Warren Buffett and Peter Lynch style, but with a focus on tech stocks, because that's the industry I work in and know best. Up to this point, I've focused totally on fundamentals and haven't done any technical analysis, but I'm starting to learn.
Top Comment: its not that hard to beat the market on an absolute basis, its hard to do it on a risk adjusted basis.
Time in the market beats timing the market
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It's so ridiculous right now. I started investing more than 3 years ago. Very diverse - different countries, different sectors, different asset classes, ETFs - a little bit of everything. Just invest and let time work for me. A month ago I was up $22k on my total investment of about 100k. Not great, but a nice reward for the time I put into research and such. Now I'm down to 5k total gain, which is laughable for 3 years, including two with high interest rates, not to mention all the time I spent on this was wasted. In a few days or maybe even tomorrow it'll probably go down further, until I'm actually losing money. Yes, it will go up again at some point. But even then, those 3 years in the market will have done exactly NOTHING for me. I would've been better off leaving it in my checking account and see it losing it's value through inflation, and starting to invest only now, or a bit later. When I could have bought many stocks for relatively cheap, like, you know, timing the market, which would've been much much better in my case.
Top Comment: You do realize we do this passive investing because we can’t know the future right? On average the world markets have returned 7% p.a. Past performance is no reliable indicator for future gains, yet there is no alternative. If you knew the markets would correct right now, you’d be a very rich man, but you can’t and that’s why you passively invest and DCA. Everything else is speculation, which is fair but don’t come here to complain about it.
MarketBeat's "7 ETFs to Invest in Now for Maximum Returns" — My Take
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MarketBeat put out an article recently entitled 7 ETFs to Invest in Now for Maximum Returns. The basic logic behind their choices is sound enough (at least a reasonable matter of opinion). The problem is, they just parrot the same popular picks, when there are comparable alternatives that offer higher returns, both total and on a risk-adjusted basis.
Here's my take on MarketBeat’s recommendations, and my alternatives:
1 - SPDR S&P 500 ETF Trust (SPY) — The market looks mostly bullish, and long-term, it’s hard to beat the market. This is a safe recommendation. The issue is, there are newer S&P 500 funds with lower expense ratios, and that equates to better returns over the long haul.
SPY Alternative - SPDR Portfolio S&P 500 ETF (SPLG) — With a lower expense ratio (0.03% vs. SPY’s 0.095%), SPLG has managed to consistently outperform SPY in terms of total returns. It may not seem like much, but it adds up to a total of about 8.5% over the 19-year existence of SPLG. While Vanguard’s S&P 500 ETF (VOO) has been more popular, and has historically had a tiny edge over SPLG, SPDR lowered SPLG’s expense ratio to 0.02% in August 2023, which should give it the long-term edge going forward (unless, of course, Vanguard follows suit). For now, it’s the winner when considering both historical returns and expense ratio.
2 - Consumer Staples Select Sector SPDR Fund (XLP) — Consumer staples is a preferred defensive sector, but also typically benefits from lowering interest rates, making it an attractive investment for this stage of the economic cycle. But there are higher-performing alternatives available.
XLP Alternative - Vanguard Consumer Staples ETF (VDC) — All other things being equal, cheaper is better. But all sector ETFs are not created equal. Over the past 20 years, VDC has tracked well ahead of XLP, even with a slightly higher expense ratio (0.10 % vs. XLP’s 0.09%), with an average CAGR of 10.18% vs. XLP’s 9.77%. VDC also has more diverse exposure to mid-cap stocks.
3 - Health Care Select Sector SPDR Fund (XLV) — Health Care is the only sector that has consistently outperformed the overall market the past 25 years (yes, technology caught up and surpassed the broader market, but only since 2020). Its edge has slowed recently, but its future outlook is still very bright.
XLV Alternative - Vanguard Health Care ETF (VHT) — Vanguard wins again, with a lower expense ratio and a slightly different allocation (not as top-heavy). The end result: 10.77% CAGR over the last 20 years vs. XLV’s 10.50%. And again, more diverse exposure to mid-caps.
4 - Global X U.S. Infrastructure Development ETF (PAVE) — The U.S. needs infrastructure development, both updating existing infrastructure and building out new capabilities, and there’s bipartisan support for the financial commitment. That gives PAVE a promising future at a fundamentals level.
PAVE Alternative - First Trust Nasdaq Clean Edge Smart GRID Infrastructure Index (GRID) —Sure, we need roads and bridges, but the growth (and therefore the private money, as well as the public) is in electrical infrastructure, to repair, upgrade, and expand it to meet America’s growing energy needs. Over the 7+ years of their mutual existence, that’s allowed GRID to outpace PAVE at a CAGR of 17.53% vs. PAVE’s 15.00%.
5 - iShares MSCI Global Gold Miners ETF (RING) — Gold is at all-time highs, with not much signs of stopping, especially heading into economic uncertainty and the possibility of an outright recession. The problem is, gold miners haven’t historically outperformed gold itself over any extended period of time. They sometimes do during strong bull markets, but not in choppy or bear markets, which is exactly when you need the precious metals in your portfolio to shine.
RING Alternative - iShares Gold Trust Micro ETF of Benef Interest (IAUM) — Go for the gold... whichever one tracks it best and least expensively. At the moment, that seems to be IAUM, at 0.15% (vs. GLDM’s 0.18% and GLD’s whopping 0.40%).
6 - Vanguard International High Dividend Yield ETF (VYMI) — I’m not personally a fan of dividends just for dividends sake, preferring to look at total returns. Sometimes that’s high-dividend assets, sometimes it’s not. VYMI offers a dividend yield of 4.40%, along with some international exposure (and it is all ex-USA).
VYMI Alternative - Franklin International Low Volatility High Dividend Index ETF (LVHI) — I’m not going to get into the debates about dividend investing or international diversification. If you’re considering VYMI, take a look at LVHI. Like VYMI, it invest in non-US high dividend stocks, but with a focus on low volatility, and the addition of currency hedging to minimize the impact of currency fluctuations. The end result is a better overall return (8.98% CAGR for LVHI vs 7.87% for VYMI since 2016), and a much better drawdown profile.
7 - iShares Russell 2000 ETF (IWM) — The Russell 2000 index is inherently a fairly diverse fund, with 2000 stocks across all sectors, no more than 0.55% in any one stock, and 8% of it non-US companies. But therein lies the problem: you don’t beat the market by buying the whole market. You beat it by identifying outliers. And that’s tricky within the Russell 2000. The Growth factor hasn’t impacted the R2K like it has the megacaps, and the Value factor that at one point had an edge hasn’t been there the past 10 years.
IWM Alternative - iShares Core S&P Small-Cap ETF (IJR) — In finance as in fashion, quality never goes out of style. IJR tracks the S&P Small Cap 600 Index, with profitability screens. It has a much lower expense ratio (0.06% vs. IWM’s 0.19%). And while it’s currently tracking about even with IWM on total returns, it’s had a considerable historical edge (20-year CAGR of 9.66% vs. IWM’s 8.53%), and has done better on a risk-adjusted performance basis, earning it a 4-star Morningstar rating vs. IWM’s 3 stars.
I’ve highlighted just the total returns above, but all of these outperform the original MarketBeat recommendation on a risk-adjusted performance basis, as well. Also, while some of them don’t have comparable trading volume to the original recommendation, they all have more than adequate liquidity for most retail traders.
Any time you see one of these articles, do your own homework. They may just be rehashing the same old recommendations without taking a closer look at all the various factors. As you can see from the examples above, just picking the right ETF, even for the same spot in your portfolio, can make the difference of anywhere from a few basis points to multiple percentage points in your annual returns.
I did this research for my own edification, and thought I'd go ahead and turn it into a post/article. This is Reddit, so I expect some harsh critique, but I really would appreciate constructive criticism. What would make this more interesting/valuable to you? What ETFs would you suggest as alternatives to these?
Top Comment: Thank you for the write up. I love posts like these. I am currently looking to park money in ETFs since I am regarded gambler and that is not working to well for me.
Please help me understand why MarketBeat displays one thing and every other site another…
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I am watching for increasing institutional ownership as it will lead to positive price action. Saw this a week ago, but it is the only place that displays such a high %.
Any ideas or explanations?
Top Comment: I’m seeing 72.88% in Moomoo app. It lists the institutions and their percentage too. It also has 272 for number of institutions.
According to Market Beat, Rocket Lab now has 71%+ institutional ownership…
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Retrieved 4/19/24 Source: https://www.marketbeat.com/stocks/NASDAQ/RKLB/institutional-ownership/
That would be an increase of 20% in the past month or so.
Please correct me if I’m wrong...
Top Comment: Not worried about a thing. Been buying and haven’t stopped. 4187 shares.
Question about how accurate the marketbeat.com site might be….
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I plugged in QYLD as a possible ETF to retire on.
If I was to own 10k shares initially to start, then DRIP for the next 10 years (you can readjust numbers due to market condition).... what is the reality that I would be getting about 50k in dividends every year? this is not a growth stock, so I changed the EXPECTED ANNUAL GROWTH & EXPECTED DIVIDEND GROWTH to 0%....
https://www.marketbeat.com/dividends/calculator/
Top Comment: Pure speculation based on historical data, and that fund has high fees.
Anyone using marketbeat premium? Is the info there reliable?
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I just signed up for a one month trial, and I must say I really like the interface and the way they group the info (like competitors, analysts views including upgrades/downgrades, etc..).
But I was wondering if anyone has used the "Beat the Market" ranking they use to rate stocks to decide what to buy or sell?
For example, here are their top 10 stocks according to this index (for companies with > 10B market cap). Do you think this makes sense?
Top Comment: Maybe do a historical analysis. Compare their previous analysis to historical data.
[Guide] How to beat the stock (turnip) market playing Solo
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Firstly this is not my finding but a translation of a Japanese wiki page that can be found here!
Apologies if this has been posted before as well
This is more for people who are not into staying in discord/forums to wait for people to admit them into high turnip selling stores. You can use this with TT or normal playing
Welcome to test it out as i am still testing myself
Basic knowledge:
- Turnips are bought on Sunday prices vary from 90~110
- The price of Turnips for the week is mostly determined by the price of Turnips ON MONDAY MORNINGS
- Turnip price changes can (not definite) happen in any time (morning and afternoon). The below will indicate price duration before the change as intervals
ok now to the actual guide
- Take note of the buy price on Sunday and the sell price on Monday morning (Very important)
2) Main formula: Monday sell price ÷ Sunday Sale price = X
3) 5 possible outcomes from X is
- X ≥ 0.91: Type 1 or Type 4
- X ≥ 0.85 but < 0.91: Type 2, Type 3 or Type 4
- X ≥ 0.80 but < 0.85: Type 3 or Type 4
- X ≥ 0.60 but < 0.80: Type 1 or Type 4
- X<0.60 : Normally Type 4.
4) Types of patterns
Type 1: The Random. The pattern here is hard to grasp but it is also the only pattern that doesnt have a definite gradual decrease before Spike, the peak price will be between 1.1x~1.45x the buying price. Sell when it goes over the buy price.
Type 2: The worst. Prices will continue falling until next Monday (100% lose out)
Type 3: Prices will continue falling until Spike happens. After the spike the 2nd interval will be more than 1.4x bought price. 3rd interval after Spike will be the peak (sell here) prices between 2x~6x (best possible outcome)
Type 4: Prices will continue falling until Spike happens. After the spike the 2nd interval will be less than 1.4x bought price. 4th interval after Spike will be the peak, prices between 1.4x~2x
5) Spike (important). Spike means a sudden increase in price after following a decreasing pattern like type 2. After the spike we call that the 1st interval. The nature of the spike (whether it is a type 3 or 4) can be determined after the 2nd interval
take not...it has been confirmed that the Spike will definitely be higher than the bought price
For example
Prices gradually decreasing until Tuesday afternoon where a sudden Spike comes. This is the 1st interval. The price changed again Wednesday afternoon. This is the second interval (do the check of 1.4x here) if the price changes again on Friday Morning then thats the 3rd interval and again on Friday afternoon then that is the 4th interval.
AFTER A SPIKE THE HIGHEST PRICE WILL ALWAYS BE AT THE 3RD OR 4TH INTERVAL AFTER THE SPIKE
6) Spikes will ONLY HAPPEN Between Monday morning to Thursday afternoon. After Thursday afternoon, if there are no Spike then it will be confirmed as type 2 or type 1.
7) Never SELL right at the first or second interval AFTER THE SPIKE because they will NOT BE THE PEAK.
So thats the guide there if anyone want to use it! Testing results below:
I have tested it once and my friend did it as well and it seems to be quite accurate. (We dont TT so can only test this by weeks, welcome anyone to debunk or improve this)
Last week was accurate for me
Buy price 101. Monday morning 87 (87/101 = 86.13%) so so type 2,3 or 4. Prices continue to drop.
Spiked at Thursday afternoon (THANK GOD) from 74 -> 129, then Friday morning changed to 167 as the second interval (167/101 = 1.65 thus confirmed type 3). Then friday afternoon changed to third interval on a whooping 479!!!!
Friend's test:
bought 107, Monday morning price 98 (so 98/107 = 0.916 type 1 or 4), Tuesday Afternoon changed to 62, Wednesday morning changed to 91 (not downward pattern so possible spike?), Thursday changed to 73 (confirmed not a spike thus type 1), Friday changed to 139. Random pattern but a peak at 1.1x~1.45x buying price confirmed
EDIT 13/04/2020: WOW did not actually think there is this overwhelming response. Apologies for not answering any questions. I have been put into the Covid19 response team in my workplace and have been doing a TON of OT and the last thing i want to do when i got off work is to continue to stare into the computer screen.. So I have just been playing AC and watching TV without visiting Reddit
So I have read a lot of your replies and can probably answer them in this edit.. hopefully you guys come back and read this as I simply do not have time to answer questions one by one.
Q: What the hell are intervals?
A: Intervals are the time between price changes. 8am to 12pm is 1 interval, 12pm to 10pm is the next interval and then the next day's 8am - 12pm is the next and so on. BUT Remember... It is only counted as the start of a new interval if the prices change... IF prices did not move.. then its still the same interval
Q: How do you determine the buy price if you bought turnips from other people?
A: Buy price mean what Daisy Mae is selling in YOUR ISLAND... It is not determined on how much you actually bought turnips for.. it doesnt matter if you bought it from Brad at 91 bells and Chad at 93, if Daisy Mae was selling 108 in your island on Sunday, your buy price is 108
Q: What happens if your Monday morning price is larger than buy price?
A: I am actually not sure about this.. This had happened both to me and my friend and I can probably say it can be ANYTHING ranging from Type 1 Type 3 and Type 4. Look at the Monday afternoon price if it goes up and check if it is type 3 or 4 is my best bet. If it goes down below the bought price, then its type 1.
Q: After my spike, the second interval decreased! is this possible?
A: Yes, for a type 4 sometime you will see something like Buy price:100, Spike: 112, next interval: 109. The second interval should still be above buy price but it can go lower from the spike.. This is ok and your peak should still be at 4th interval from spike.
Q: How come it did not follow all patterns?
A: As I said this is a testing theory (and was pointed out from New Leaf.. but still holds true for all my prices in NH). I am happy for people to debunk this however this has hold true for me and my 2 friends.
So thats it.. Sorry for not replying earlier
Top Comment:
Just made an spreadsheet to easily track your island prices, you are free to clone it!
https://docs.google.com/spreadsheets/d/1dGDjzarxZKF695Lf12e3iqgoO2C3-u9Vjag1oKZEnwQ/edit?usp=sharing
Edit: To clone it, just do File -> Make a copy, so you can edit your own copy.
Can AI beat the stock market?
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Can Google beat the stock market?
Search engine optimizers know that Google’s artificial intelligence engine now generates search results by determining the INTENT of the searcher. With millions or billions of searches happening all at once, do you think Google could learn to predict supply and demand based on the volume of keywords and intent behind the searches and effectively beat the stock market or possibly influence it?
Top Comment:
More than likely, yes.
But we will never know because if/when someone develops one they sure as shit won't share.