re: Advice on stocks to take long position on for IRA

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Buy diversified ETFs and ignore the individual stock game.

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Hey now

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The reason I don't have to worry about it is because I have a REIT in my Roth, and I'll never have to pay taxes on the fat dividend it provides.

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I see what you're saying. If you're going to own a REIT, you suggest it should be in a qualified account.

You could really make the same argument for any dividend payer though.

Fwiw, REITs got a break in the tax law changes where 20% of the ordinary income payable to shareholders could be deducted. If you take the 2017 distributions for CIM, basically $1.79 was ordinary income and $.09 was return of capital. At the 24% marginal rate, you would have paid taxes on $1.432 at ordinary income (80% of ordinary income considering the new tax changes), and netted $1.088. Add back the 20% deduction and capital gains and you net $1.536 of a $1.88 distribution. That's 83.2% of the distribution, and qualified dividends on a stock would net you 85% of the dividend.

It's not a big enough difference where I'd advocate only owning REITs in qualified accounts, but to each their own.

For a long term tech play I’d go with TSLA. It’s positioned to be a leader for decades currently. And those model 3s! You should try driving one!

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Eh, the decay is minuscule to what is coming.

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This is just nonsense. The FANG index itself allowed for a chance for investors to take of advantage of large gains AND upside volatility in a historically low volatile market. In the time frame it could be backtested, it was 1.75 times more volatile than the S&P 500 and 1.25 times more volatile than the Nasdaq.

So 3 times that volatility means its 5.25 times more volatile than the S&P 500, and it’s 5.46% daily volatility since its inception is close that, as it’s been 3.35 times more volatile than SPY’s 1.02% over that time frame. And SPY’s volatility in that time deals is lower than its historical averages (dating back to 1993) of 1.16%, which would extrapolate to over 6% daily volatility in those leveraged FANG stocks.

So now only are you betting against the long term trend (significant growth), the extremely volatility would mean that it would have to be an extreme trend in that direction.

To highly this, FAS is an 3X ETF that tracks the Russell 1000 financial sector. And for comparison purposes since I couldn’t find another non-leveraged ETF that tracks the same index, I used IVF since it also tracks large cap financials, and it has a 0.99 correlation with FAS.

For the 88 months following FAS’s inception on 11/19/2018, it similar volatility as FNGD/FNGU, with a daily SD of 5.65%. During that time IVF had an annualized return of 10.87%, so FAS would be expected to yield an annualized return of about 32.61%. Yet instead it has an annualized return -0.23%.

So if you think think time decay of an ETF that has is EXTRMELY volatile and requires returns counter to the long term trend is a minuscule concern then best of luck with that.
You’re free to be ignorant if the extreme risks, with a high probability of losses, but when you’re offering that ignorance as advice, then the ignorance should be highlighted.

You may end up right in the short run, but clearly the reasoning to reach that doesn’t bode well in the long run.

Nice info and math, but I’d rather store it away in my Roth and auto reinvest 100% of the dividends.

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FNGD- triple inverse FAANG etf. Currently cheap at 28.9.

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I would still continue to hold this. Long term a good hold to any portfolio.

I buy CIM. Great buying opportunity right now with rate increases.
I also own STOR. It’s about where I bought it a month ago.

Dang that's a nice price for Exxon. How do you like the CEO? I remember the guy after Tillerson was seen as not good

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