Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[DaFace]

Originally Posted by NewChief

Curious what folks think about Robo-Advisors like Wealthfront?

The idea of them sounds nice. I've always been skeptical that they'll outperform a simple index fund, though, once you account for a little bit in extra fees.

[lewdog]

Originally Posted by DaFace

The idea of them sounds nice. I've always been skeptical that they'll outperform a simple index fund, though, once you account for a little bit in extra fees.

Agreed. People see something like a higher return and think it's worthwhile. If the fees you pay for that return make your net gain less than an index, it's simply not worth it. I have found that people have a hard time adjusting for fee cost into their return. A small re-occurring fee may not seem like a lot, but 1-2% on a total investment, really IS a lot.

[ChiliConCarnage]

Originally Posted by NewChief

Curious what folks think about Robo-Advisors like Wealthfront?

Logged back in here for the first time in a while, that said I love this thread.
I use wealthfront for some taxable; i think it's a reasonable deal for what's provided if you're comfortable with how aggressive they are (including Betterment, etc.).

[petegz28]

Originally Posted by lewdog

Agreed. People see something like a higher return and think it's worthwhile. If the fees you pay for that return make your net gain less than an index, it's simply not worth it. I have found that people have a hard time adjusting for fee cost into their return. A small re-occurring fee may not seem like a lot, but 1-2% on a total investment, really IS a lot.

Here is a bit of .05 wisdom that I cling too....

Fund Managers spend their entire career trying to beat the SP500....
Most cannot do it consistently...
So an SP500 fund should be the core of any portfolio....

[Amnorix]

Originally Posted by petegz28

Here is a bit of .05 wisdom that I cling too....

Fund Managers spend their entire career trying to beat the SP500....
Most cannot do it consistently...
So an SP500 fund should be the core of any portfolio....

First thing you've ever said about investing that made any damn sense.

[ChiTown]

Originally Posted by petegz28

Here is a bit of .05 wisdom that I cling too....

Fund Managers spend their entire career trying to beat the SP500....
Most cannot do it consistently...
So an SP500 fund should be the core of any portfolio....

[wutamess]

Originally Posted by petegz28

Then just put your money in an SP500 fund and some bond funds and be done with it.

I do that too.

[petegz28]

Originally Posted by wutamess

I do that too.

Well quit buying stocks based on solely analyst ratings. They are nice as a confirmation indicator but I would never buy or sell anything because some nut with a calculator says too. They don't know how to run AAPL. They most likely are working for a firm or have contacts with firms that are looking to dump AAPL so they put a "Buy" rating on it so the poor schleps will fork over their money to the bog boys as the big boys sell.

If you're going to trade or even invest in individual stocks you are going to have to either learn fundamental-based investing or technical-based (chart reading) investing and I would encourage you to do both. Otherwise you are just going with a gut feeling or otherwise a "hot tip". You don't have to have an MBA to trade based on fundamentals and you don't have to spend hours upon hours pouring over charts to trade based on technicals.

What you do need to do is have a plan and some criteria and rules. Understand the more savvy side of things. Perhaps you should have bought a Put when you bought your AAPL as a hedge? Or perhaps you should have sold a long time ago using a Stop-Loss rule of 10% and took your lumps and walked away?

These are the things I am talking about. If you're going to do it, then do it and do it right. Otherwise just $-cost average into mutual funds and call it a day. There is nothing wrong with doing that at all, it's just boring but often works out much better in the long run.

[wutamess]

Originally Posted by petegz28

Well quit buying stocks based on solely analyst ratings. They are nice as a confirmation indicator but I would never buy or sell anything because some nut with a calculator says too. They don't know how to run AAPL. They most likely are working for a firm or have contacts with firms that are looking to dump AAPL so they put a "Buy" rating on it so the poor schleps will fork over their money to the bog boys as the big boys sell.

If you're going to trade or even invest in individual stocks you are going to have to either learn fundamental-based investing or technical-based (chart reading) investing and I would encourage you to do both. Otherwise you are just going with a gut feeling or otherwise a "hot tip". You don't have to have an MBA to trade based on fundamentals and you don't have to spend hours upon hours pouring over charts to trade based on technicals.

What you do need to do is have a plan and some criteria and rules. Understand the more savvy side of things. Perhaps you should have bought a Put when you bought your AAPL as a hedge? Or perhaps you should have sold a long time ago using a Stop-Loss rule of 10% and took your lumps and walked away?

These are the things I am talking about. If you're going to do it, then do it and do it right. Otherwise just $-cost average into mutual funds and call it a day. There is nothing wrong with doing that at all, it's just boring but often works out much better in the long run.

One of the rare times I actually agree with you. I'll be hitting you up for more suggestions later.

[lewdog]

Originally Posted by wutamess

One of the rare times I actually agree with you. I'll be hitting you up for more suggestions later.

Pete is definitely right, and you know what makes up a large percentage of SP500 funds? Apple.

So if a large percentage of your investments in mutual funds are in large caps and broad market index funds, you are already getting plenty of exposure to a big company like Apple. If you decide to take on more Apple as individual stock, fine. But know that it can be more risky as you are leveraging more of your total capital on the gains/losses of one company.

[petegz28]

Originally Posted by wutamess

One of the rare times I actually agree with you. I'll be hitting you up for more suggestions later.

Rare? Now you gotta go and tell flat out lies???

[Demonpenz]

I am grinding through "the intelligent investor"

[wutamess]

Originally Posted by Amnorix

Slum lord is a good way to go.

So is mindlessly investing in very low cost index funds (or ETFs, as you prefer) on a systematic basis. That approach gives you diversification and participation with relatively minimal effort. You're not trying to time the market, and you're not trying to outperform the market in general. Basically, market returns for as little cost as possible.

https://www.amazon.com/Random-Walk-D...1553064&sr=1-1

I got the audio book on audible but it's like watching paint dry. Trying to give it a chance while at work. My ADHD is kicking in BAD though.

[phisherman]

Originally Posted by wutamess

One of the rare times I actually agree with you. I'll be hitting you up for more suggestions later.

I can't believe that you just admitted to agreeing with Pete... whoa

[wutamess]

Originally Posted by phisherman

I can't believe that you just admitted to agreeing with Pete... whoa

Let him tell it, I do it all of the time.