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 Post subject: investing
PostPosted: Mon Oct 25, 2010 3:14 am 
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We had another topic regarding this earlier. However this time I want to see if there are any people knowledgeable about such things here. I feel the need to change my investment strategy to something I know very little about. I know we at least had an accountant. Any knowledgeable investors out there?


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PostPosted: Mon Oct 25, 2010 4:52 am 
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Spend less than you earn.


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PostPosted: Mon Oct 25, 2010 8:38 am 
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Buy high, sell low. No. That doesn't sound right, somehow.


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PostPosted: Mon Oct 25, 2010 9:10 am 
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In Memoriam: TimD
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Great point Doc. That's exactly what happened to both the stock and housing markets. Although there has been a lot of impropriety in the mutual fund markets, IF you can find a trusted broker, who actually knows what they're doing, I'd (and have) go with that. He knew what to do with small/mid and large cap following certain trends. Utilities are slow but usually steady gains.
Tim


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 Post subject: Re: investing
PostPosted: Mon Oct 25, 2010 9:51 am 
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Ironman wrote:
We had another topic regarding this earlier. However this time I want to see if there are any people knowledgeable about such things here. I feel the need to change my investment strategy to something I know very little about. I know we at least had an accountant. Any knowledgeable investors out there?


Not sure what you mean by "change my strategy to something I know very little about" ... but here are some books that helped me setup investments for my wife and I (if you are referring to Funds / ETF's / single Stocks, etc. in the Stock Market).

The Intelligent Investor by Benjamin Graham

Real Money: Sane Investing in an Insane World by Jim Cramer

Three Questions That Count by Ken Fisher

They are not end-all be-all books to investing, but did provide me with some very practical advice on the markets. TimD has a good point about a trusted broker -- I think (if I remember correctly) The Intelligent Investor (the most recent edition) has an appendix listing some advice on how to interview brokers (ie. questions to ask and what to look for in crappy answers of them trying to swindle you).


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PostPosted: Mon Oct 25, 2010 12:08 pm 
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I second the Intelligent Investor. I'm pretty sure nygmen invests, as do I.

I wish I was old enough before the crash !!!! arghhh I could have made so much money!!!!!


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PostPosted: Mon Oct 25, 2010 8:01 pm 
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I learned about investing more from the point of view of fluctuating but upward trending stock prices and making money that way as they increase in value. However the market seems to crash before it gets back to that point.

So what I want to get into now is something more interest and/or dividend based, like bond funds or preferred securities. This is a long term thing so I am fine with risk and volatility. These things are crazy complicated though. Many of these products have confusing convoluted rules.

I'll check out the books.


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PostPosted: Mon Oct 25, 2010 8:56 pm 
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The great jeff foxworthy-

"Sophisticated people invest their money in stock portfolios; rednecks invest our money in commemorative plates""

"Sophisticated people have retirement plans, rednecks- play the lottery!"

About sums up my financial experience.


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PostPosted: Tue Oct 26, 2010 10:08 am 
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Ironman wrote:
So what I want to get into now is something more interest and/or dividend based, like bond funds or preferred securities.
...
I'll check out the books.


Benjamin Graham is a good resource for Bond and Preferred Security information (he is old school, but his philosophies are still sound - in my opinion anyways).


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PostPosted: Tue Oct 26, 2010 5:17 pm 
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Things to consider:

Risk tolerance
Amount of funds (can't stress this enough) available
employment security
debt:equity
credit score
Tax status
Marriage status
home ownership?


My advice to you? Use the 401k your company offers, and depending on your age either be in equities (god knows why they are rising right now) or be about 50/50. Again depending on how much money you have.

if they don't offer a 401k, get an IRA with anyone that isn't a jackass.

Unless you have real money. In which case you already have a lawyer and an accountant, ask them who they use.

Often times people get in WAY over their heads with too little money, and end up making jack. When something as simple as a CD would have yielded a better NET/NET gain based on their situation.


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PostPosted: Wed Oct 27, 2010 2:57 am 
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nygmen wrote:
Things to consider:

Risk tolerance
Amount of funds (can't stress this enough) available
employment security
debt:equity
credit score
Tax status
Marriage status
home ownership?


My advice to you? Use the 401k your company offers, and depending on your age either be in equities (god knows why they are rising right now) or be about 50/50. Again depending on how much money you have.

if they don't offer a 401k, get an IRA with anyone that isn't a jackass.

Unless you have real money. In which case you already have a lawyer and an accountant, ask them who they use.

Often times people get in WAY over their heads with too little money, and end up making jack. When something as simple as a CD would have yielded a better NET/NET gain based on their situation.


risk tolerance is high, I'm 34, so I have a ways to go yet.
Right now it's just a couple K in my roth IRA. It will probably be another year before I can really add to it. It was converted from an IRA, which was rolled over from a previous employers 401k ( I only worked there 1 year in 2004).
Employment security is as good as it can be these days in the US.
Debt is better/lower than average, I've been working on paying it off. I don't know what equity means outside of the context of my house.
My credit score should be very high. My record is clean/perfect. I have a 13 to 14 year history and my revolving credit to debt is about 15.5 to 1.
Married filing jointly and my wife owns a very tiny S corp.
I have a home with some equity.
I do have student loan debt too.

My company does have a traditional 401K, 50% match up to 8%. I am fully vested. I contribute 8%. I always have and always will do the 8%. I'd like to put anything over that in my roth as that is a better deal. However my company's 401K has stuff in there you can't invest in on your own unless you are totally fv(K1ng loaded. So I might still be better off putting everything in there.

Yes indeed I haven't had much money in there and a CD would have done me better.

If my company offered a roth 401K I'd really be in business, I'd just put everything in there.

Now on a separate note, I am also going to need to find a low risk short term investment. I want to start a "car fund". This is where I make a car payment to an account where I can EARN interest rather than pay it. I'd like to find something better than a savings account making less than 1%.The account would build up over several years, then I would spend 95% of it or so, and then build it back up again.

In addition to that I also need to build up a savings account which I can borrow from as needed so as never to carry over a balance on a credit card again.

So it will be a year or 2 before I start contributing to the roth, but I want to find something good for the money to sit in for now. At the moment it's in a S&P small cap value fund, which hasn't been the greatest, but it's been doing good the past month or so. But like I said, I really truly think interest and dividends are going to be way better than counting on increases in market value.


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 Post subject:
PostPosted: Sat Nov 20, 2010 5:39 pm 
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Really short term would be a money market fund. About 6 months ago I put about 1/4 of my non-tax-deferred portfolio into a tax-free bond fund. The thinking there being that tax rates would rise this year. That fund dipped a bit after Obama looked to get on board with keep the current rates, but I think it's still a good place to be on a year or so timeframe. The thing that's so crippling right now is the prospect of high or even hyper inflation, so I've got a decent exposure to energy in hopes of mitigating that.


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PostPosted: Tue Nov 23, 2010 2:52 pm 
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Of course, the best investment that you can make is in your health, which is preaching to the choir on this forum.

The mistake that many people make is using a high-cost investment advisor. It's axiomatic in investing that 'you get (to keep) what you don't pay for'. For most folks simple, low-cost, broad Index Mutual Funds (one stock and one bond fund) adjusted for your age and financial situation, will suffice.

A little book on investing that I thought helpful is 'The Little Book of Main Street Money: 21 Simple Truths that Help Real People Make Real Money' by Jonathan Clements, former financial columnist for The Wall Street Journal.

Here are some investing quotes I've gathered over the years:

"The main idea of investing is not to get rich, but not to get poor" Jonathan Clements

"It's not timing the market, it's time in the market" John Bogle

"Successful investing involves doing just a few things right and avoiding serious mistakes" John Bogle

"Don't allow your thinking to be bullied by the short-term market" Anonymous

"Annual income twenty pounds, annual expenditures nineteen six, result happiness. Annual income twenty pounds, annual expenditures twenty pound aught six, result misery." Charles Dickens

"Speculating on short term movements of the market is not investing, it's gambling" Anonymous

"We would be better investors if we made fewer decisions" Daniel Kahneman (Nobel Prize winner)

"Buy, hold and tough it out" Scott Burns

"This too shall pass" Bill Miller on bear markets

"The only function of economic forecasting is to make astrology look respectable" J K Galbraith

"The market timing Hall of Fame is an empty room" Jane Bryant Quinn

"Buying and holding a broad-based market index fund is still the only game in town" Burton Malkiel

"It was never my thinking that made the big money for me; it was the sitting" Jesse Livermore

"The long haul in investing may be longer than you think" Anonymous

"It's only when the tide goes out that you see how many people have been swimming naked" Warren Buffett

"You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right--and that's the only thing that makes you right. And if all your facts and reasoning are right, you don't have to worry about anybody else" Benjamin Graham


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 Post subject:
PostPosted: Tue Nov 23, 2010 3:07 pm 
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Rucifer wrote:
"Sophisticated people have retirement plans, rednecks- play the lottery!"


'The lottery is a voluntary state tax on those who don't understand math'
Bumper Sticker


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 Post subject:
PostPosted: Mon Jan 03, 2011 6:48 am 
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Read: "The Four Pillars of Investing" by William Bernstein
OR gaze into this chart for awhile:
http://www.nytimes.com/interactive/2011 ... aphic.html

After that you should know that you can't time the market.
Then invest 10% of your nest egg in VTIAX (International) or VGSLX (REITs) -- or 5% each, your choice.
Invest your age in VBTLX (US Bonds) -- for instance, if you're 30, then invest 30%.
Invest the rest in VTSAX (US Broad Stocks).
Reinvest all dividends.
Rebalance every year on your birthday.


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