Long term stock market question

[manlymatt83]

So I have a quick question about long term investing. If at this point I started investing in some long term stable companies (perhaps IYT, transportation fund, some mutual funds, etc.), 10 years from now, if the economy recovers, would I be glad I did? I know the market is really low, but other people aren't buying like I'm thinking of doing, otherwise the market wouldn't be staying so low....

So is now the time to begin long term investing (10 year hold, etc.), or is it still time to day trade and I should wait for prices to go lower?

 

[Drakkon]

Make a Decision - gives about a good a predictor as anyone else at this point - i go with the quarter over the 8 ball though

 

[kranky]

I would argue that it's never time to day trade. That's not investing, that's gambling.

Historically, regular investments over the long term pay off quite well. That's what I do. And don't worry about what other people are doing.

 

[speg]

Yes. Other people have just finished selling mostly out of panic/fear.

 

[nerp]

Build a savings kitty in a high yield savings acct or money market. Setup a 401k with growth. Contribute weekly.

Once those are going, then you can divert leftover cash into something like sharebuilder to start long-term investments in stable stocks. I'd do this for a while before playing around with day trading. You can daytrade with a few hundred bucks for fun but treat it like a night at the casino unless you're really experienced and understand the risk invovled.

 

[Special K]

Why not just buy some cheap total market index funds?

 

[mizzou]

invest with your level of tolerance

 

[soccerballtux]

Originally posted by: kranky
I would argue that it's never time to day trade. That's not investing, that's gambling.

Historically, regular investments over the long term pay off quite well. That's what I do. And don't worry about what other people are doing.

You know this never takes into account natural trends of investment. IE, of course the market's going to do well if more and more people are dumping money into stocks. We'll know the real truth when we reach critical mass. Growth will be much slower then. By critical mass I mean when, say, baby boomers start pulling on savings, fewer middle-class graduates are entering the labor force (less investment) and so no new cash is entering the market.

We need China's and India's economies to pick back up and create a middle class soon so that index fund investing remains profitable. Otherwise, the only way to make money would be having inside knowledge or being a very very good analyst. Good luck on the last one, you've got a lot of competition.

 

[fishmonger12]

Prices won't go much lower. They will go higher. If you're a long term investor now is a great time to buy. Buy in pieces, establish your position slowly. If you want x shares of stock A, buy x/8 shares at a time over a couple week period. Make sure your portfolio is diversified. Best way to do this if you are a beginner is to buy index funds, such as the wilshire 5000. An even more conservative way to do this is to buy into something like the vanguard star fund, which has certain percentages of cash and securities, depending on the state of the market. Don't buy into the whole "stock picking" bullshit, it's not true unless you're an investment professional, and even then many investment professionals cannot beat the market. Go read about the "efficient market hypothesis" for more info on that, the wikipedia entry is pretty good.

Best of luck.

 

[fishmonger12]

Originally posted by: soccerballtux

Originally posted by: kranky
I would argue that it's never time to day trade. That's not investing, that's gambling.

Historically, regular investments over the long term pay off quite well. That's what I do. And don't worry about what other people are doing.

You know this never takes into account natural trends of investment. IE, of course the market's going to do well if more and more people are dumping money into stocks. We'll know the real truth when we reach critical mass. Growth will be much slower then. By critical mass I mean when, say, baby boomers start pulling on savings and no new cash is entering market. We need China and India's economies to pick back up and create a middle class soon so that index fund investing remains profitable.

You don't know what the fuck you're talking about.

 

[soccerballtux]

Originally posted by: fishmonger12

Originally posted by: soccerballtux

Originally posted by: kranky
I would argue that it's never time to day trade. That's not investing, that's gambling.

Historically, regular investments over the long term pay off quite well. That's what I do. And don't worry about what other people are doing.

You know this never takes into account natural trends of investment. IE, of course the market's going to do well if more and more people are dumping money into stocks. We'll know the real truth when we reach critical mass. Growth will be much slower then. By critical mass I mean when, say, baby boomers start pulling on savings and no new cash is entering market. We need China and India's economies to pick back up and create a middle class soon so that index fund investing remains profitable.

You don't know what the fuck you're talking about.

So, why don't you express why you think I'm wrong and enlighten me, instead of just using colorful language to berate me?

 

[Special K]

Originally posted by: fishmonger12
Prices won't go much lower. They will go higher. If you're a long term investor now is a great time to buy. Buy in pieces, establish your position slowly. If you want x shares of stock A, buy x/8 shares at a time over a couple week period. Make sure your portfolio is diversified. Best way to do this if you are a beginner is to buy index funds, such as the wilshire 5000. An even more conservative way to do this is to buy into something like the vanguard star fund, which has certain percentages of cash and securities, depending on the state of the market. Don't buy into the whole "stock picking" bullshit, it's not true unless you're an investment professional, and even then many investment professionals cannot beat the market. Go read about the "efficient market hypothesis" for more info on that, the wikipedia entry is pretty good.

Best of luck.

For more detail on this approach, also refer to these books:

A Random Walk Down Wall Street
The Boglehead's Guide to Investing

 

[fishmonger12]

Originally posted by: soccerballtux

Originally posted by: fishmonger12

Originally posted by: soccerballtux

Originally posted by: kranky
I would argue that it's never time to day trade. That's not investing, that's gambling.

Historically, regular investments over the long term pay off quite well. That's what I do. And don't worry about what other people are doing.

You know this never takes into account natural trends of investment. IE, of course the market's going to do well if more and more people are dumping money into stocks. We'll know the real truth when we reach critical mass. Growth will be much slower then. By critical mass I mean when, say, baby boomers start pulling on savings and no new cash is entering market. We need China and India's economies to pick back up and create a middle class soon so that index fund investing remains profitable.

You don't know what the fuck you're talking about.

So, why don't you express why you think I'm wrong and enlighten me, instead of just using colorful language to berate me?

No time. Correctly responding to stupid of that magnitude would require 2 well written, cohesive pages. With references.