So after many years of telling myself I needed to do it and reading about others here that are right into it, I finally committed to opening an account and purchasing my first batch of shares. Actually I subscribed to a group of investors and will use their tips as the primary lead.
I suppose there will be a lot of questions but perhaps the first one relates to how best to finance my investments. I only have about $60K in savings and want to keep some put aside for emergencies. However I’m wondering whether it would be better to get some sort of loan to use for the investing? I don’t necessarily know yet how frequently the tips will come, so not sure there’s a point borrowing a big amount now if I don’t need to spend it all yet. I guess my ignorance in this area is shining through.
Looking for some real entry level guidance here because I probably don’t even know the right questions to ask.
bogleheads.org is probably a better site than some random tips in an email. Sounds like you could lose big betting on things you know nothing about. Bogleheads helps you set it and forget it for a year which has lifted a ton of weight from my novice shoulders.
You got that right - share trading is for novices. Non-novices know to spread the risk (and unfortunately, the rewards at times). As others say - index funds.
Are you looking to invest long-term for retirement? If so: low-cost index funds. Buy and forget.
Looking to “trade”? You’re gambling- put in as much money as you can stomach losing.
This. People who do this for a living inevitably underperform indexes like S&P500. Without fail. Honestly a casino is probably more fun if you’re looking to gamble away money, but I guess “trading” makes you sound legit and grown up.
Here is the only tip you need: buy low and sell high.
Buying individual shares as a novice is risky - its pretty much the same as Vegas gambling. You most likely will not have the time and resources of a professional investor to get to know the firms, industry, and macro climate in sufficient detail to make sound decisions. Plus you can’t react as fast to changes.
I recommend trying reputable Exchange Traded Funds - low management fees, and the diversification will take some risk out and most likely improve your rate of return in the long run.
Perhaps my description / terminology was just wrong, because it didn’t seem like a high risk proposition.
This group has had a long running advice blog linked to a major news site for some time. They have openly updated the performance of their previous recommendations. They don’t appear interested in short term ‘trading’ (i.e didn’t get too excited about our recent mining boom) but rather settling in for the long term (3-5 year min) with their recommendations. To me it seems like a self-managed fund, where I am meant to make the purchases rather than just handing over money to a fund manager.
These are not some random emails saying ‘quick buy this now because in two weeks time they are going to go off and we can sell’.
So back to my original (intended) question, when people are investing in a fund, are they using pure savings or is it ok / better? to take out loans to invest in the funds?
The market has been hovering around an all time high. Now is the time to go in big. Basically can’t fail. It is those suckers that buy when the market is low that usually get worked.
I had to look at the date stamp to make sure this was not an April fools joke.
You sound like, you think this is going to get you Rich. It ain’t.
So this group tells you when to sell also or just buy? If they are doing so well, why do they want to share this information with you, what are you adding to this already profitable group?
Only invest what you can afford to lose.
I hope you are fully funding a 401k or the like, before going off on this adventure.
Are you looking to invest long-term for retirement? If so: low-cost index funds. Buy and forget.
Looking to “trade”? You’re gambling- put in as much money as you can stomach losing.
This. People who do this for a living inevitably underperform indexes like S&P500. Without fail. Honestly a casino is probably more fun if you’re looking to gamble away money,** but I guess “trading” makes you sound legit and grown up.**
No, the issue is that if you lose too much money at the casino you have to go through a 12 step process to beat addiction. You can lose 10 times the money day trading and nobody cares.
Basically can’t fail. It is those suckers that buy when the market is low that usually get worked.
Except very few people can do this. If you missed out on the 40 best days of the market between 1997 and 2013, you’d have made 12% less in average annual returns (-8% ave loss annually) than if you’d been fully invested the entire time (4% ave gain annually).