Investments 101

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TXviking
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Investments 101

Postby TXviking » Mon Jun 20, 2016 10:36 pm

So, I've got a bit of money (not much) sitting at Discover earning a whooping 0.95% APY. I'm somewhat risk-averse, but I can't help but think I should be able to do better than that. I've been considering dabbling in investments a bit — my idea is to invest a few hundred dollars, see what kind of return I can get on those investments, then bump it to four or even five digits when I've learned a bit and feel more confident. I also have some non-fiscal considerations (certain companies I won't invest in for example.)

Googling around, there are lots of resources, but I'm not entirely sure where to start. I don't really want to go with a full-service brokerage because they kill you with fees. I'm hoping maybe some people on this forum, being above average interested in money, might have some tips for me starting out? :money:


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CarefulBuilder14
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Re: Investments 101

Postby CarefulBuilder14 » Mon Jun 20, 2016 10:56 pm

the-lounge/9413-investments-etrade-30.html

My thoughts are on page 4. My opinion of Vanguard has fallen a lot (a cluttered website), and my opinion of Schwab has increase a little.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

takeshi
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Re: Investments 101

Postby takeshi » Tue Jun 21, 2016 10:00 am

There are a lot of different approaches out there and it's up to you to determine which suits you best. Mutual funds offer diversity with smaller investment requirements. Index funds offer low cost versus managed funds which generally don't seem to outperform index funds in the long run from what I've read. Those costs eat into your returns. I'm using the index fund approach with an asset allocation that I'm comfortable with.

I don't subscribe to everything over at Bogleheads but some of the information there seemed useful to me. Of course, I won't claim to be an expert on investing but even some of the experts don't necessarily seem to know as much as they claim.

CarefulBuilder14 wrote:My opinion of Vanguard has fallen a lot (a cluttered website), and my opinion of Schwab has increase a little.

Clutter doesn't bother me. I'm using Vanguard for our taxable account.

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CarefulBuilder14
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Re: Investments 101

Postby CarefulBuilder14 » Tue Jun 21, 2016 2:03 pm

TXviking wrote: I also have some non-fiscal considerations (certain companies I won't invest in for example.)

Personally, I have no objection to investing in unethical companies in principle. I don't exactly seek them out under the theory they'll be more profitable, either.

It can be hard to find a practical solution to avoiding unethical companies. For example:
1. What's ethical or unethical? Obesity is a major public health problem. Are soda companies unethical? I rarely drink soda, but it's an unhealthy habit for other people. The health effects of alcohol are mixed and debatable, but I don't think anyone needs soda more than they need tobacco. Still, soda companies rarely make the "sin list".
2. There are good and bad companies in most industries. In a world that needs basic materials, a mining company with an environmental record that's better than its competition would in my eyes be ethical, but others might disagree.
3. How clean does a company's hands have to be? Any large industrial pollutes. Big tech companies like to talk about their solar panels, but they dodge taxes and sell customer information. Pharmaceutical companies charge Medicare a fortune, and then shift the profits to offshore havens - doubly harming American taxpayers.

By the time you invest in what's left, you're not going to be very diversified, or necessarily making much money. It can also take up a lot of time.

What I actually do invest in is index ETFs and a few individual companies. I've been investing for several years, though, and proved to myself I have a strong stomach for volatility in 2008.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

MemberSince99
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Re: Investments 101

Postby MemberSince99 » Tue Jul 26, 2016 9:29 am

The thing is guys that investments generally are a risk. After losing money and a lot of it to me anyway in 401k plans I'm not a real fan of it.

You have to remember your broker wins whether you get rich or it all disappears. You will eat a loss not them so they often had a perverse incentive to roll the dice on your money.

I would guess if you are truly wealthy the game is a lot more friendly but for the little guy it's a crapshoot. After losing money I no longer want to play.

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CarefulBuilder14
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Re: Investments 101

Postby CarefulBuilder14 » Wed Jul 27, 2016 1:48 am

When you're investing 3 to 5 figures, indexes are generally the way to go. Your expenses and time commitments are low, and you get reasonable tax efficiency (not a lot of short-term gains).

It's not as interesting, perhaps, as individual companies...but it's a good way to start. I have some investments on "autopilot" in indexes.

Also, keep in mind that stock prices are historically high relative to GDP. Corporate profitability is also high, but I don't think stocks in general are exactly dirt cheap. Take your time to learn and don't rush to decisions.

And maybe you'll find that stocks aren't for you. I thought I would never want to be a landlord, but after working on a residential rehab, I'm more open to the prospect.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

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lobbythis
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Re: Investments 101

Postby lobbythis » Wed Jul 27, 2016 3:11 am

Try Robinhood. No fees. Platform is mobile (phone, tablet) only, but great for beginners.



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