Investment thread
my New Years resolution has been to be much smarter with my money and was lucky enough to get a sizable end of year bonus from work.
Do we have any investors here? Obviously with the asterisk that none of this constitutes as legal financial advice and it’s definitely best seek out a professional.
But interested to to hear what any BMers are investing in.
So so far I’ve been reading books on Index Funds and have an eye on a few dividend paying stocks. Most of the stocks I’m looking at are in the aerospace industry. IE Boeing, Lockheed, etc
also interested in ETFs but I’m pretty clueless on this.
Definitely staying away away from any get rich quick ideas or Super risky investments. I tried FX trading a few years back and got took to the Cleaners...I’m still holding some crypto but I don’t think I’m putting any more money into it.
I’m also not really trying to simply make 5% returns either. Also if anyone is an actual certified financial advisor feel free to PM me to talk privately.
Do we have any investors here? Obviously with the asterisk that none of this constitutes as legal financial advice and it’s definitely best seek out a professional.
But interested to to hear what any BMers are investing in.
So so far I’ve been reading books on Index Funds and have an eye on a few dividend paying stocks. Most of the stocks I’m looking at are in the aerospace industry. IE Boeing, Lockheed, etc
also interested in ETFs but I’m pretty clueless on this.
Definitely staying away away from any get rich quick ideas or Super risky investments. I tried FX trading a few years back and got took to the Cleaners...I’m still holding some crypto but I don’t think I’m putting any more money into it.
I’m also not really trying to simply make 5% returns either. Also if anyone is an actual certified financial advisor feel free to PM me to talk privately.
Comments
I've been pleased so far in their interface / features so far. They have tax loss harvesting tools and asset location that are above my head but all the reviews I read on Betterment seemed to point out as great benefits. Just got an email they are rolling out an auto withdrawal to a low risk savings account in an attempt to put that non-long term invested money to use when your linked checking account gets over 3-5 weeks of spending. Haven't enabled the feature yet but
If anyone has any debt, I really recommend the Dave Ramsey plan. He's a mixed bag when it comes to his podcast (lotsa evangelical type stuff sprinkled in), but he generally has good financial advice. Unless you're in real deep shit, I wouldn't buy any of his stuff or do his "Financial Peace University" thing, you can get all the main principles and plan for free.
If you are going to do some playing with individual stocks everything I've read says to pick a small percetage of your portfolio and play only with that amount (e.g. 5%). Just my opinion, I'm certainly no expert!
Banks/professional investors/sharks rarely make money by helping you make money. They make waaaay more money taking your money. Reminds me of the Matthew Mccanehey scene in Wolf of Wall Street.
What really hit me the hardest was my FX trading losses. Like I said I got took to the cleaners. But after doing more research I found out they were not acting as the intermediary they promoted. FX is very similar to stocks. People buy and sell and there is an intermediary who processes it for a fee. But what I found out was these FX companies where doing nothing more than being a casino. They were the house and they were betting on you to lose. They didn’t do anything illegal. They just simply played the percentages and decided instead of being the middle man we’re going to play the opposite of this persons position. And they usually won. Reading that was heartbreaking. Not too mention during the time I lost money it was confirmed banks were manipulating prices. 2 Traders in the UK got arrested for FX manipulation. FX is a trillion dollar industry. Yet only 2 guys took the fall for one of the biggest scams in history.
Back to stocks. People seem to be be scared of stocks and picking “the right one” which yea it’s not easy.
But if you look look at the best performing investors and portfolios over the past 100 years. All of them were stock heavy.
The problem is picking the winners. You could be a billionaire from buying $100 worth of Coke in 1923. Or you could have went bust spending 50k on some .com bubble stock in 2002.
Just like the casinos the house holds the odds to win. Investing is nothing more than gambling. And the people you invest with most likely want you to lose money.
Park extra cash in an FDIC insured high yield savings account. You can find these on bankrate.com and you’ll find big institutions like American Express, Goldman Sachs, and Barclays paying 2.10 - 2.25% (versus my local credit union’s 0.05%).
I’d avoid individual stocks until you are comfortable with them and the higher risk associated with them. ForEx, Crypto, and naked option trading are very high risk and more like gambling than index equity investment is. If the S&P 500 goes to $0, we all have more to worry about than what we have saved, while losing all of an investment in some of the riskier stuff is not uncommon. If you start stock picking, don’t have them all in the same industry.
Don’t put money in that you may have to pull out over the next few years. The worst is being forced to sell during a recession or other downturn because you have to have the cash, thus locking-in your losses.
Also I went against my own will and put 10k into some forex trades last night and made 1k overnight. Got sucked back in after seeing some naked signals. Woke up and closed it though. 10% return in less than 24 hours. However I’ve learned my lesson. Going to use that 1k profit and invest into something more stable.
seems like buying stock but with higher risk/reward. Almost like FX. Buying and selling positions on stock with Margin.
Still seems less less risky than FX given Stock prices don’t fluctuate as much. Was interesting to read you still get paid dividends even though with CDFs you technically don’t own the shares.
Margin certainly amplifies both the upside and the downside (with the bank always winning of course). I’m not a fan, I pick my own individual stocks and sell covered calls, but I’m not usually aggressive enough to mess with margin or naked options. I had a good-sized margin position in early 2008 and it really, really, didn’t end well, even though I saw some of the risk and had it covered with Puts; Puts expire and the market was worse than anyone expected. Being forced to sell into a market crash because of margin calls does not feel good at all so I’ll not put myself in that position again.
Bogleheads wiki has a pretty good guide to building a 3 or 4 fund portfolio, with Vanguard and others:
https://www.bogleheads.org/wiki/Three-fund_portfolio
https://www.bogleheads.org/wiki/Vanguard_four_fund_portfolio
Example of stock purchase vs CFD. With stock If I have $1k to invest and Stock A costs $100. I could only buy 10 shares. Then I own that share and pretty much my gains and losses simply follow the price by the dollar.
With CFDs I can purchase Stock A with leverage technically allowing me to purchase a much higher amount of shares. Which if I’m right and it goes up my earnings would be much higher. However if it goes down my losses are much greater and you are at risk of a margin call if you don’t have the equity to cover the losses. Let’s say stock A drops like 20% cuz they have some scandal or declare some major issue. If I don’t have the equity to cover that loss my position gets closed and I’m out however much the leveraged loss is.
Theres also no no broker fee with CFDs but they charge a nightly holding fee which is usually a small percent. So like 20 shares of Boeing costs me $1 per night to hold the position. If I had $100 it would be $5.
Also there limits and stops like forex where you can set an auto close if the stock hits a certain price.
in all reality right now im just testing out a few options and see what works for me. I think im just going to try a few different things and then settle on something that 1. I become proficient at and 2. fits how much money im trying to make.
Holding a 10K leveraged short on that position would have netted something crazy. It wouldn’t be impossible to make a million bucks on the trade if you heavily leveraged multi-thousand dollars
Its not not the same situation with Brexit but if you play the right position man...cha Ching.
the problem is if you play the wrong position and you get over leveraged and margin called you could potentially owe your broker serious dough. When the Eur/CFH happened it was instant. And even if you held a stop loss you most likely got closed well below your stop loss.
Even if you only invest 10k you could find yourself closed at a -90k position and then you got Lawyers coming for your assets..
The good old thing about Singapore is we got our PR 4 years ago and as a PR/citizen you have a mandatory retirement fund called CPF that you have to contribute to each month with the government matching your contribution up to 1,200.
been able to save a significant amount of money over these last four years but the only thing you can use it for outside of medical bills is housing. So I could technically use my retirement fund plus cash in hand to purchase property but I don’t have the money for anything more than 1.
my Wife is Australian so we were thinking maybe buy a house there but anywhere 1 hour from downtown Sydney is same. 500k to $1+mil. But we could only use our cash.
Lastly i I could buy in the US but 1. We really don’t ever plan on living there until maybe 2028 when our first kid goes to college and 2. I’d have to pay for a property manager because I couldn’t manage it myself from here
I’d develop a get-rich slow strategy and then only pursue high-risk options with excess money over and above implementing that strategy (without risking assets in that slower strategy).
If a third investor comes along (Bob), and he makes 7% by investing in an index fund that tracks the average weighted share price of 500 companies, then he's doing better than John and Anna, because he gets the same result with less risk.
What this means is that, if you decide to be stubborn and not follow a broad index, you are intentionally taking on more risk than necessary. Professional investors do this, because they believe they have better information than the average investor, and they believe they are better at analyzing the available information. Some of them succeed.
If you take on extra risk, you have to realize that you are betting on your own ability to analyze the market better than millions of other investors (better than "the crowd"). This can be an exciting bet to take, but there's also something inherently arrogant about it (I'm not judging)
the money you might save by spreading out your purchases can easily be eaten up by fees.
On the flip side though bitcoin is a great example where it would have killed to invest sll
your money st a single price instead of spreading out the purchases as it dropped.
Once again ive has a 1k profit with a 10k investment in FX today.
Ive decided to split my investments into 2.
Say i habe 100k. I’m going to put 70k into non risky investments and hope for the 5% return.
the other 30k I’m going to act like casino money and play risky investments that can net 10%+ returns. Basically the 30k is going to be money I’m willing to lose.
I actually built an FX “bible” took me months to do and I’ll share it via Google drive. It’s worked well for me when I don’t trade on emotion and let the signals/analysis help make my decisions.