Investment

[dogman_1234]

Thinking about investment.

Any advice?

 

[fazers_on_stun]

There's lots of ways to invest, depending on how much you want to spend and your goals and risk tolerance. For example, my company offers a 401K type plan (earnings are tax-deferred until retirement, at which time you are supposed to be in a lower tax bracket.

You have to be careful about 401K's however - some investment firms who handle them have been in the news lately about the fees they charge, which could amount to as much as $70K or so over a 30 yr career or so.

Many banks like Wells Fargo will give you investment advice as well. Dunno about the minimum investment requirement however - think WF's is $2500. Make sure you get the list of fees charged, as many kinds of investments where they 'actively' manage them are charged around 1-2% per year. If you can join a credit union, their fees are lower typically.

 

[riser]

What type of investment?

You can do your 401k as stated, you can start an IRA or Roth IRA (I would guess you would go with a Roth at this time).

You could use an online broker like Tradeking, ScottTrade, BoA, eTrade, etc. to purchase individual stocks, mutual funds, etc.

Read up on investing techniques. Then, before you start with your own money, pick a few stocks and watch them. Research, research, research! It will almost become a full time job and can be addicting (or at least should be, it's your money working for you!)

I prefer TradeKing, $5 trades (buy/sell = $10) and the interface is fairly simple to use. Go with companies you know well and you should be safe.

 

[Reynod]

Yeah ... AMD stock is cheap ... well worth the ride up with Piledriver looking to be a good (but not fantastic) product on the horizon.

I suggest it will bottom out over the next few weeks (buy) then spin up after the product launch.

That would be my tech stock tip.

Regarding Resources FMG stock is cheap now ... the China appetite for Iron ore will improve in the mid term ... buy over the next two weeks ... it will dip a little further as they shed a couple of hundred staff ... then improve as China continues to but.

Iron ore will push through 90 bucks and go up to 115 again ... sell then.

 

[wanamingo]

Ill see y our 401k and raise you an autographed spiderman #1.

http://comicbooks.about.com/od/collectingcomics/a/investcomics.htm

 

[fazers_on_stun]

IIRC there was a "granny daytrader" club in the news maybe 12 years ago - a bunch of women who instead of sitting around playing bridge or pinochle, invested in various stocks. They got in the news after the club made a million dollars (maybe 10 or 12 women total).

Of course, that was during the dot-com boom when a blind monkey could do well .

 

[chunkymonster]

Check out options.

With proper research, a careful eye, and about $2000 seed money, you can consistently make $200-$500 profit per option over a period of 3-7 days.

This method IS NOT about striking it rich or hitting it big, it is about monitoring the weekly stock price fluctuations and leveraging the value of an option to turn a profit in a short amount of time. Buy one 1-month option for +/- $400, the stock goes up 3 dollars in 3-7 days, cash out the option while it is still close to full value, and make $250-$300 profit. Buy more than one option at the same time to multiply your profit.

This method requires daily monitoring, a willingness to take a loss, knowing when NOT to be greedy, and knowing when to cut your losses.

 

[riser]

IIRC there was a "granny daytrader" club in the news maybe 12 years ago - a bunch of women who instead of sitting around playing bridge or pinochle, invested in various stocks. They got in the news after the club made a million dollars (maybe 10 or 12 women total).

Of course, that was during the dot-com boom when a blind monkey could do well .

I tried to get into a group like that through a broker. They were against the idea. Long story short, I gave them $1500 to invest for me and I invested $1500 on my own. A year later I had over $11k in my personal account. In the account they managed for me I had around $650.

After that, I decided to keep investing on my own and doing my own research.

 

[dogman_1234]

Check out options.

With proper research, a careful eye, and about $2000 seed money, you can consistently make $200-$500 profit per option over a period of 3-7 days.

This method IS NOT about striking it rich or hitting it big, it is about monitoring the weekly stock price fluctuations and leveraging the value of an option to turn a profit in a short amount of time. Buy one 1-month option for +/- $400, the stock goes up 3 dollars in 3-7 days, cash out the option while it is still close to full value, and make $250-$300 profit. Buy more than one option at the same time to multiply your profit.

This method requires daily monitoring, a willingness to take a loss, knowing when NOT to be greedy, and knowing when to cut your losses.

That is a very volatile risk investment. It does sound too good to be true!

What were you investing? What was your prospectus? Methods?

I understand all investments carry risk; however,did you leverage or hedge your portfolio with other options to counter losses and inflation over time?

I tried to get into a group like that through a broker. They were against the idea. Long story short, I gave them $1500 to invest for me and I invested $1500 on my own. A year later I had over $11k in my personal account. In the account they managed for me I had around $650.

After that, I decided to keep investing on my own and doing my own research.

Mutual funds with a very low annual rating should be a great idea. However, check out the fund(s) before investing as there may be a greater risk to your portfolio if their is a failure with in the market.

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I want to start out with a coupel thousand dollars.

My goals are these:

1) Begin a low risk, basic gain in capital increase on stable investments
2) Apply a continual investment strategy to allocate investment capital and reinvest in more stable options
3) Allow interest to gain over time and allocate capital gains
4) Settle many portfolios: One for retirement, one for capital gains for future investments, and one for livable taxable income to live off of or to offset expenditures.

Basically, I want to start out small and continue to grow over the long run in very stable investments.

No day trading, no overnight sensation stock, not trying to be the next Warren Buffet!

 

[riser]

First, let's define capital gains. This is any gains that you've had for 1 calendar year. If you buy and sell within 1 year of acquiring it, you'll pay income tax on it, not capital gains. What Chunky is suggesting is day trading and will increase your income tax unless you have a significant amount of money to play with and some other criteria is met. You can easily lose as much as you gain. Very risky.

Only invest if you can afford to lose the money to start. Basically, if you need that money for a security blank or a car repair, you're not in a place to invest your money. Moving on from that...

If you're young, go aggressive. There is no reason to not be aggressive if you are under 45. The rule of 72 hasn't applied in the market for years so I would avoid that common thought for now until stability returns to the market - seems to be getting stable but with elections coming up, it will become bumpy.

To review yours:
1) You want a steady growth account. This is generally used for people in retirement.
2) Reinvesting, might as well reinvest in what you're already invested in, periodically change up your investments. Easier done with mutual funds in this case instead of individual stocks.
3) You should look for stocks that pay out dividents instead of banking on interest. Again, interest would be a money market account. If you have a lot of money, sure, 3% is great. If you have $2,000, go with something that pays dividends. You'll make more money quicker than the standard compound interest.
4) I would say at best 2 portfolios. One that you set and forget almost and just watch it grow. Have another portfolio to play with, maybe make a risky bet, or experiment with it. Again, after 45 you should start looking to go from a highly aggressive down to aggressive or semi-aggressive funds.

Realistically, 50-55 is when you want to start focusing your portfolio towards retirement. If you're starting off small, go high risk because the reward far outweighs the risk.

 

[dogman_1234]

What about medium risk...I do not want to wipe out my entire portfolio if a recession hits or the market crashes!

What about bonds and T-bills?

 

[riser]

Bonds and T-Bills aren't something I would lock my money up in because they can be called in at any time and you take a loss on them.

If the market crashes, you'll still have the shares available for a recovery unless the company goes under completely. That being said, it goes back to my statement of being able to lose that money.

 

[dogman_1234]

On bonds: If there is a recall on them, you get what you collected on per coupon with your initial principle, so you do not lose money, you just get less than what you expected over the last 10 years.

If the market crashes, and doe snot recover...does that mean I am at a loss?

What if I had money in the big banks stock then I took a hit? Will I get my money back.

Remember, the stimulus was not just for bailing banks out...

 

[riser]

If they recall a bond, you can take a loss. That's a lie that you can't take a loss on them. Dave Ramsey will cover that information. It could be that you're doing good over 9 years, and 9.5 years you're doing bad and losing, they recall.. you're out. They're bad investments overall.

The market not recovering means you have bigger issues to worry about. In the case that it does not recover you will want to be invested in the three Bs: Beans, Bullion, Bullets.

The stimulus hurt the economy as many reports are pointing out. While in theory the thought may have worked, in practice it has failed significantly.

 

[dogman_1234]

Never heard of losing out on a recalled bond, but on default default...yes!

Even a AAA rated bond certifier can default on their IOU. (Hint: Greece)

Even if the market fails, there will be hyper infaltion and not many of us could afford to purchase commodities.

Dave Ramsey does not have gold as part of his portfolio. His reason: It is not the hedging tool many of us think it is. It hold not value against the dollar; in fact, it is a competitive currency against the fiat USD.

Right now, it is over inflated in value and may devalue or crash.

 

[dogman_1234]

http://www.google.com/finance?q=NASDAQ%3AFSCI&ei=e-VGUNDnNuKciALEIA


What do you think?

 

[dogman_1234]

I am still a bit worried about ivesting.

I do not want to put in hard earned money and have it wiped out. Let us say I invest 1000 USD in a stock that is valued at 20 dollars per share. What happens if in the next 6 months is goes to 22 then drops over time to 3 dollars per share? I just lost 850 dollars over the year!

I cannot figure out if a sell ceiling and buy floor are good options.

I guess what I am saying is...I am scared of investing. I am asking to collect enough information that I am able to feel more comfortable about placing money in investments. I do not want to lose my shirt because someone played fast and loose with hard earned cash I have allocated.

 

[riser]

When you invest, you buy shares. Don't look at the dollar value, look at how many shares you have. If you have 100 shares at $10 or 100 shares at $20, either way you have 100 shares. It goes up, it goes down. It will happen.

Fisher doesn't look that good. They're flat, their P/E is high (which is good), but their average daily volume in my opinion is low - meaning it isn't trading much which is why the stock is flat.

They're high being around 50 in the last few years, they're sitting well considering the current condition of the market and economy. I would suspect they have more to lose than to gain though.

 

[riser]

Put money in you don't need. Put $1000 in and leave it.. don't pull it out. Don't get antsy and sell if it starts dropping.

The buy/sell/call/put stuff is a safety net.

 

[Reynod]

Alternatively you can invest in improving your own home ... then selling it and buying another and doing it up ... and so on.

I thought of this ... then the wife spat out four kids and I am screwed.

Pity me and learn ... don't do what I did.

 

[wanamingo]

What about us non-stock investors (Or home owners)?

Ive always just dumped up to the matching amount in my 401k. Whats the best type of account to throw a percentage of my pay check into?

 

[riser]

People think a house is an asset. A house is a liability until you sell it and make money on it. We are the first generation to get screwed with home ownership. Personally, I'm looking at a 50% loss on my house, up from a 75% loss on it. Heck, the bank is taking the loss, not me.

Rental properties will always be worthwhile, especially now that many people can't 'afford' to buy a house. I quote afford because they may have bad credit, laws limiting, etc, while financially able.

International stocks are a bit weaker than US stocks. I invest lightly in some with my 401k and do so-so with it.

A lot of people like Large Cap stocks, I prefer Small. They're riskier and the reward is far better. The loss is generally small.

Dog, for you though. If you're afraid to lose your money, you haven't done your homework yet. Pick a stock, watch it for 3 months, 6 months, and make your predictions. See where you end up, understand why it went up/down/stayed the same. Mutual funds are always recommended but I prefer highly aggressive investing since I'm younger and can afford to take a loss should it happen.

I started off with $1500 investing. I picked up stocks all under $10. Anything under $5 is considered a Penny stock - don't let the name fool you. Anything that drops below $2/share (I think it was $2, maybe $1) falls off the DOW and you're SOL. Keep that in mind. I made a healthy amount off Ford (F), Human Genome Sciences (HGSI), Lazy-Boy (LZB), Delta (forgot the symbol), Citicard (C), and a coulpe others.

High volume means more people are buying/selling so you're safer in my opinion. Low volume means people aren't selling/buying that often so you could be stuck with a loss for a while until someone is buying. Larger stocks, people might be trading half a million shares for $.02 per share. Do the math, you're looking at a health sum of money gained for a small transaction.

Grab a few stocks, watch them. Read about the company, follow their press releases.. it might as well become a second job. When I was investing regularly, I spent about 15-20 hours a week following my companies. I found this little $2.43 per share stock called HGSI. I took a risk on them and bought 500 shares. One day I woke up and the stock went from $2.xx to $14 overnight. A few days later, $18.. I sold. 9x my money, no way was I going to get greedy. Stock went up to $33/share before dropping back down.

First Solar was a solid bet for a while. It was too rich for my blood starting at $22/share, going up to $311/share within a year.

Keep in mind, you'll make more based on buying more shares. If you buy 1 share at $100, or 100 shares at $1, and the price goes up $.01, the share share is worth $100.01, while the 100 shares are worth $101.

 

[fazers_on_stun]

If they recall a bond, you can take a loss. That's a lie that you can't take a loss on them. Dave Ramsey will cover that information. It could be that you're doing good over 9 years, and 9.5 years you're doing bad and losing, they recall.. you're out. They're bad investments overall.

The market not recovering means you have bigger issues to worry about. In the case that it does not recover you will want to be invested in the three Bs: Beans, Bullion, Bullets.

The stimulus hurt the economy as many reports are pointing out. While in theory the thought may have worked, in practice it has failed significantly.

?? All the corporate bonds and muni bonds I've bought have been callable at par value - i.e., what I paid for them. If however you sell them before maturity then yes you can take a loss.

I had a couple corporate bonds paying over 7% interest, and both got called on the first call date.

Munis generally pay a lower rate, but then they're federally tax-free..

 

[fazers_on_stun]

Alternatively you can invest in improving your own home ... then selling it and buying another and doing it up ... and so on.

I thought of this ... then the wife spat out four kids and I am screwed.

Pity me and learn ... don't do what I did.

LOL - too bad it's illegal to sell kids ...

When I was in college many moons ago, there were some old houses in a formerly upscale portion of Jacksonville, FL that had nice-sized waterfront lots. Many of them were fairly decrepit and available on the cheap. I had the idea of getting some college buddies together and fixing one up, using the proceeds to buy another and fix it up, etc. I was pretty skilled at electrical wiring although I did not have a license (back in those days you could hire an licensed electrician to inspect and then approve the work).

Alas, no funds available for the initial purchase..

 

[fazers_on_stun]

I am still a bit worried about ivesting.

I guess what I am saying is...I am scared of investing. I am asking to collect enough information that I am able to feel more comfortable about placing money in investments. I do not want to lose my shirt because someone played fast and loose with hard earned cash I have allocated.

My 401K has several investment options or funds available - one is based on the S&P 500 stock price index, another on 10-year Treasuries, and a third on a bond index. They let me do an interfund transfer twice a month now (used to be daily but the overhead was too high). So I would switch between the 3 based on some research and buy low, sell high .. Anyway, I managed to go from about $60K (which is what I had left after my exwife got half of it) in 2007 to about $215K today. Not great considering I pump in $1K a month, but not bad either.

Traditionally the bond fund would be the inverse of the stock fund, but that is not so true nowadays. Anyway, I try to pay attention to the news, particularly potential conflicts like Israel going after Iran's nuke facilities which could shut off a portion of the world's oil supply for a while as Iran tries to sink the tankers & blow up the storage/pumping facilities within reach of its missiles. I doubt it would last long or have that great an effect, but you can bet stock markets worldwide would tank dramatically for maybe a week or two after such an event. That would be a good time to buy, just before the upswing . So my strategy would be to shift everything to the T-Bills fund, wait a week or so until Iran's missile capability is degraded, then shift back into the S&P500 fund.

However you also have to monitor economic news around the world, particularly the EU and China, as both of those seem to weigh heavily on the markets.

Nothing is perfect or guaranteed but this is a far safer strategy than day-trading, plus since I eat lunch at my desk mainly it relieves the tedium ..