Do you do your own investing?

[abracadabra1]

Please post your individual experiences with investing. If you've managed your own investments most of your life, how was the experience and what advice would you give to someone looking to do so? Any links to useful sites for investing research/analysis?

If you have a financial planner, what has your experience been? Are they trustworthy and competent? Is their expertise worth the expense?

 

[xeno2060]

Made a bundle on AMD in 1999!

 

[Zenmervolt]

Balance. Unless you have 5 or six hours a day to devote to managing your investments you're a fool if you try active strategies. You might get lucky, but that's all it will be. Keep your portfolio well-diversified, don't over-weight one small area just because it's doing well right now.

ZV

 

[thegimp03]

IMO financial planners aren't worth it unless you're investing a lot of money...one of the keys is to spread your money out and do what zenmervolt said. Also, if you're doing your own investing, I recommend you get a subscription to the wall street journal (online or print). This can help you with your decisions about various investments.

 

[murban135]

Trying to outperform the market in the long run is for the very lucky or the very best investors. That is why about 80% of the mutual funds underperform market indexs over the long term. And these funds are run by highly paid professionals whose job it is to make money in the market.

If an investment advisor could really outperform the market they would not be talking to you or me. He would be running a fund themselves or investing money for businesses.

As Zenmervolt said diversify. One good way to do that is with a total market index fund.

 

[Stumps]

nope, i don't invest, never had the free money to do so!

 

[StageLeft]

Yes, and generally the more hands off you are the better you'll do, and the easier it is. The vast majority of people who play the market with individual stock are just wasting time - and worse, money.

 

[DaveSimmons]

Originally posted by: murban135
Trying to outperform the market in the long run is for the very lucky or the very best investors. That is why about 80% of the mutual funds underperform market indexs over the long term. And these funds are run by highly paid professionals whose job it is to make money in the market.

If an investment advisor could really outperform the market they would not be talking to you or me. He would be running a fund themselves or investing money for businesses.

As Zenmervolt said diversify. One good way to do that is with a total market index fund.

Good advice.
A pretty good strategy that requires almost zero time investment and is much safer than buying individual stocks: buy good mutual funds, hold them until retirement.

Here's one mix using just 3-4 stock funds
1. Put a large part of your money into an S&P500 index fund, I recommend Vanguard VFINX
2. Put a smaller amount into a "small-cap" mutual fund, I don't have a specific recommendation for this (check Vanguard for a small cap "growth" fund)
3. Put the rest into one or two Worldwide funds to balance the US investments in 1-2. Some Vanguard choices are VEIEX and VEURX.

I'm not investing in bond funds at this time, but I keep several months worth of living expenses in a savings account (INGDirect.com is a good choice for this) and have a couple of CDs.

 

[abracadabra1]

Thanks for the replies. For those of you with experience purchasing mutual funds, do you generally by loaded or no-load funds? Do you purchase A,B, or C shares (please state which and explain why)?

 

[DaveSimmons]

No-load. Vanguard are all no-load and have some of the lowest expense ratios in the business. The management fee for my VFINX fund shares is half that of my equivalent Schwab S&P 500 fund.

With Vanguard you will pay a trading fee to buy shares if you use a different brokerage like Schwab instead of Vanguard.com, because Vanguard doesn't pay out the kickbacks to brokers that other companies do.

I buy the indivdual investor shares of funds, they usually aren't listed as a particular class. Some funds do have a second class open to individuals but it usually carries a $50K minimum investment instead of the $1-5K of regular shares.

 

[minendo]

Do you do your own investing?

Yeah, but they are fairly basic. Invest in a 401K through work (multiple funds), stock purchase plan through work, and an ING Direct account.

 

[Miramonti]

I don't invest but if I did (not talking about retirement accounts) I would put 1/2 in a couple good mutual funds that don't have much overlap with eachother and would hold on to the other half until the market really craps out, to the extent that people are talking about it and getting scared that the disaster could continue because whatever dire reason, and then put that other half into good funds that have really gotten hammered during the selloff.

Then sell this other half after 3-6-9 months for a huge profit when things have come back significantly, and wait for the next crap-out to happen. It seems to happen every 2-3 years or so.

 

[BD2003]

Originally posted by: jjsole
I don't invest but if I did (not talking about retirement accounts) I would put 1/2 in a couple good mutual funds that don't have much overlap with eachother and would hold on to the other half until the market really craps out, to the extent that people are talking about it and getting scared that the disaster could continue because whatever dire reason, and then put that other half into good funds that have really gotten hammered during the selloff.

Then sell this other half after 3-6-9 months for a huge profit when things have come back significantly, and wait for the next crap-out to happen. It seems to happen every 2-3 years or so.

Which doesnt work unfortunately, because you don't know when the market has bottomed out or hit a peak. If you did, you'd be a billionaire.

Short of diversification strategies, its pure luck.

 

[randomlinh]

some money in ing for long term savings for possible large purchase... and soon IRA w/ vangaurd most likely. not sure what else (that and the fact my income isn't all that much.. heh)

 

[Miramonti]

Originally posted by: BD2003

Originally posted by: jjsole
I don't invest but if I did (not talking about retirement accounts) I would put 1/2 in a couple good mutual funds that don't have much overlap with eachother and would hold on to the other half until the market really craps out, to the extent that people are talking about it and getting scared that the disaster could continue because whatever dire reason, and then put that other half into good funds that have really gotten hammered during the selloff.

Then sell this other half after 3-6-9 months for a huge profit when things have come back significantly, and wait for the next crap-out to happen. It seems to happen every 2-3 years or so.

Which doesnt work unfortunately, because you don't know when the market has bottomed out or hit a peak. If you did, you'd be a billionaire.

Short of diversification strategies, its pure luck.

It does work because by the time people are talking about it, it probably hasn't bottomed but has gone down plenty to not need to time things perfectly. When the worry-worts are starting to actually sell their shares tho, that is always extremely close to the bottom.

 

[StageLeft]

Originally posted by: jjsole

Originally posted by: BD2003

Originally posted by: jjsole
I don't invest but if I did (not talking about retirement accounts) I would put 1/2 in a couple good mutual funds that don't have much overlap with eachother and would hold on to the other half until the market really craps out, to the extent that people are talking about it and getting scared that the disaster could continue because whatever dire reason, and then put that other half into good funds that have really gotten hammered during the selloff.

Then sell this other half after 3-6-9 months for a huge profit when things have come back significantly, and wait for the next crap-out to happen. It seems to happen every 2-3 years or so.

Which doesnt work unfortunately, because you don't know when the market has bottomed out or hit a peak. If you did, you'd be a billionaire.

Short of diversification strategies, its pure luck.

It does work because by the time people are talking about it, it probably hasn't bottomed but has gone down plenty to not need to time things perfectly. When the worry-worts are starting to actually sell their shares tho, that is always extremely close to the bottom.

But like he said, it's almost all luck. VERY FEW people can successfully predict the market and make more money from it than an index fund. As mentioned, most paid professionals cannot even match the market, let alone beat it.

 

[patrick409]

might want to look into exhange traded funds as well. Basically funds that are traded like stocks. SPY is an example just to get you started. It tracks the S&P 500.

 

[Miramonti]

Originally posted by: Skoorb

Originally posted by: jjsole

Originally posted by: BD2003

Originally posted by: jjsole
I don't invest but if I did (not talking about retirement accounts) I would put 1/2 in a couple good mutual funds that don't have much overlap with eachother and would hold on to the other half until the market really craps out, to the extent that people are talking about it and getting scared that the disaster could continue because whatever dire reason, and then put that other half into good funds that have really gotten hammered during the selloff.

Then sell this other half after 3-6-9 months for a huge profit when things have come back significantly, and wait for the next crap-out to happen. It seems to happen every 2-3 years or so.

Which doesnt work unfortunately, because you don't know when the market has bottomed out or hit a peak. If you did, you'd be a billionaire.

Short of diversification strategies, its pure luck.

It does work because by the time people are talking about it, it probably hasn't bottomed but has gone down plenty to not need to time things perfectly. When the worry-worts are starting to actually sell their shares tho, that is always extremely close to the bottom.

But like he said, it's almost all luck. VERY FEW people can successfully predict the market and make more money from it than an index fund. As mentioned, most paid professionals cannot even match the market, let alone beat it.

I agree that for most its all luck, because a 'crap shoot' is the odds that most people accept when they invest.

However there is also common sense which I'm simply trying to point out. There are times every few years where markets are very oversold and its common sense and very profitable to do the opposite of what most others are doing.

Everyone wants to purchase something that is good and undervalued, but when it is handed to them on a silver platter, most people instead look to jump on the bandwagon and consider selling (usually due to fear). Its these times when everything becomes oversold that make the best times to purchase the fundamentally sound companies/funds etc., which is almost always very profitable.

 

[abracadabra1]

any recommendations for diversification?
30-40% large cap
30-40% small/mid cap
15-20% international markets
10-20% bonds

how's that look?

 

[lykaon78]

You might check out Equiserve they manage direct stock purchase programs for individual companies. Essentially they coordinate the purchase of a stock directly from a company with no brokerage fee. If you are going to invest in individual stocks and buy and hold this may be a good option.

Otherwise, market index based mutual funds are usaully pretty good investments as others have mentioned.

As far as the class of shares to purchase... I've read that class A is the best if you plan to buy and hold, otherwise I don't know about the other two.

Fortunately, I work for a financial services company and get class A shares for free for company manged funds. Thats a 5.75% discount right off the top.

 

[abracadabra1]

Originally posted by: lykaon78
You might check out Equiserve they manage direct stock purchase programs for individual companies. Essentially they coordinate the purchase of a stock directly from a company with no brokerage fee. If you are going to invest in individual stocks and buy and hold this may be a good option.

Otherwise, market index based mutual funds are usaully pretty good investments as others have mentioned.

As far as the class of shares to purchase... I've read that class A is the best if you plan to buy and hold, otherwise I don't know about the other two.

Fortunately, I work for a financial services company and get class A shares for free for company manged funds. Thats a 5.75% discount right off the top.

I thought class C shares were best for buy and hold strategies since after 5 years the front-loaded fee is disregarded entirely.

 

[murban135]

Originally posted by: abracadabra1
any recommendations for diversification?
30-40% large cap
30-40% small/mid cap
15-20% international markets
10-20% bonds

how's that look?

Not a bad mix, where you want to allocate your money is ultimately a personal decision.

One very easy alternate method. Say you want 80% stocks and 20% bonds. Then just put 80% of your investment money into a S+P index fund and 20% in a bond index fund. This is a simple way to start investing, easy to manage and monitor. See how this performs and your comfort level, then you can branch out from there if you want.

 

[rh71]

no i don't like to gamble.

 

[BD2003]

Originally posted by: jjsole

Originally posted by: Skoorb

Originally posted by: jjsole

Originally posted by: BD2003

Originally posted by: jjsole
I don't invest but if I did (not talking about retirement accounts) I would put 1/2 in a couple good mutual funds that don't have much overlap with eachother and would hold on to the other half until the market really craps out, to the extent that people are talking about it and getting scared that the disaster could continue because whatever dire reason, and then put that other half into good funds that have really gotten hammered during the selloff.

Then sell this other half after 3-6-9 months for a huge profit when things have come back significantly, and wait for the next crap-out to happen. It seems to happen every 2-3 years or so.

Which doesnt work unfortunately, because you don't know when the market has bottomed out or hit a peak. If you did, you'd be a billionaire.

Short of diversification strategies, its pure luck.

It does work because by the time people are talking about it, it probably hasn't bottomed but has gone down plenty to not need to time things perfectly. When the worry-worts are starting to actually sell their shares tho, that is always extremely close to the bottom.

But like he said, it's almost all luck. VERY FEW people can successfully predict the market and make more money from it than an index fund. As mentioned, most paid professionals cannot even match the market, let alone beat it.

I agree that for most its all luck, because a 'crap shoot' is the odds that most people accept when they invest.

However there is also common sense which I'm simply trying to point out. There are times every few years where markets are very oversold and its common sense and very profitable to do the opposite of what most others are doing.

Everyone wants to purchase something that is good and undervalued, but when it is handed to them on a silver platter, most people instead look to jump on the bandwagon and consider selling (usually due to fear). Its these times when everything becomes oversold that make the best times to purchase the fundamentally sound companies/funds etc., which is almost always very profitable.

So then, you believe you are the exception to the rule? Someone hire him immediately!

Please, for your own good, don't do your own investing. You are only going to lose money trying to time the market.

You have to understand, that the common sense you talk about is built into the market. If people knew ahead of time when the markets would be oversold, they would hold out until that time, thus having the effect of negating the effect to begin with.

You absolutely can NOT time the market! Period! If professionals paid to do so can't even come close, why do you think you can?