Does anyone here play the stock market?

[not on the rug]

I've never done any sort of investing before, other than the 403b (non-profit's version of a 401k) and I'm looking for some good resources, information, etc.  My father in-law is really in to it, but I don't really speak with him very often and I was just curious if anyone here is in to it.  

[TroutandBucks]

I play really heavy into 
What kind of information are you looking for? and are you trying to manage the money yourself or have someone manage it for you? 

I worked in financials let me know if have questions 

[Haskell_Hunter]

I have an MBA in finance.  Simple rules for non-investors:

 

1. Use Vanguard.  Lowest management fees in the industry, and most (maybe all) funds are no-load.
2. Buy index funds, not individual stock.  You don't study the market every day, you will lose money.  Funds have managers to do that work for you.
3. Research the term "balanced portfolio".  You won't start out with this, but you should be aware of the concepts.
4. Don't look at your investments on a daily basis.  It will drive you insane.
5. Research the term "dollar averaging".  It will help you understand the value of periodic investment.

Start there before you drop a dime.

[not on the rug]

I play really heavy into 

What kind of information are you looking for? and are you trying to manage the money yourself or have someone manage it for you? 

I worked in financials let me know if have questions 

pm sent

[jerseyhunter]

I suggest being diversified in mutual funds, foreign, and domestic. Individual stocks are a gamble ,you just have to hit the right one. As far as a manager, my wife has one through work and they get  a hefty piece which would have been better spent re-invested .  But it's her job and decision. It's a shame to see her returns vs. money invested. You can't live with them and you can't live without them. JMO.  I like Vanguard and Harbor

Edited March 23, 2017 by jerseyhunter

[dlist777]

I have an MBA in finance.  Simple rules for non-investors:

 

1. Use Vanguard.  Lowest management fees in the industry, and most (maybe all) funds are no-load.
2. Buy index funds, not individual stock.  You don't study the market every day, you will lose money.  Funds have managers to do that work for you.
3. Research the term "balanced portfolio".  You won't start out with this, but you should be aware of the concepts.
4. Don't look at your investments on a daily basis.  It will drive you insane.
5. Research the term "dollar averaging".  It will help you understand the value of periodic investment.

Start there before you drop a dime.

Ding Ding Ding!  I can't agree more.  

 

This is the method I have followed for 25 years and it has proven to work very well for me.  The problem with buying individual stocks is that you need to have a lot of time, and really understand each firm and industry.  Furthermore, your timing has to be impeccable.  It's much better for most of us to purchase index funds and pay as little in fees and taxes as you can.  You should invest as much as you can when you can and never sell (of course until you actually need the money for retirement or whatever).  I have many colleagues and friends that got scared and sold out in 2007 and 2008 and locked their losses in forever.  They bought back in later and they will never be able to recoup their losses.  I just turned off the news, left my money in index funds, tried to invest more, and never logged into my Vanguard account.  

 

Also, your time horizon matters a lot.  If you are going to need the money in a year or two, the stock market isn't the right place.  If you can put it away for longer, then you can ride the ups and downs and should always end out positive. 

 

You also should look into the difference between a mutual fund and an ETF.  You can buy low cost indices either way, but each have certain advantages or disadvantages.  

[jerseyhunter]

PM   jcchartboy

[Haskell_Hunter]

Ding Ding Ding!  I can't agree more.  

 

This is the method I have followed for 25 years and it has proven to work very well for me.  The problem with buying individual stocks is that you need to have a lot of time, and really understand each firm and industry.  Furthermore, your timing has to be impeccable.  It's much better for most of us to purchase index funds and pay as little in fees and taxes as you can.  You should invest as much as you can when you can and never sell (of course until you actually need the money for retirement or whatever).  I have many colleagues and friends that got scared and sold out in 2007 and 2008 and locked their losses in forever.  They bought back in later and they will never be able to recoup their losses.  I just turned off the news, left my money in index funds, tried to invest more, and never logged into my Vanguard account.  

 

Also, your time horizon matters a lot.  If you are going to need the money in a year or two, the stock market isn't the right place.  If you can put it away for longer, then you can ride the ups and downs and should always end out positive. 

 

You also should look into the difference between a mutual fund and an ETF.  You can buy low cost indices either way, but each have certain advantages or disadvantages.  

 

As a young person (I'm not retiring for another 20-25 years, so, yeah, I'm young) I LOVE when the market goes down.  That means that every new investment dollar has more buying power.  Things are selling at a discount in a down market.  I could care less what the present value of my portfolio is.  That's only important when I want to convert equity (stocks) into debt (bonds), or cash something out.  I'm also a long-term investor.  I invest with the intent that I won't withdraw the money for at least 7-10 years.  It really adds up over time.

[Bucksnbows]

I rely on my financial adviser to do that for me.  I just don't have the time to pay such close attention, so that's what he gets paid a modest fee for.  He made my parents a ton of money and although my dad is long since passed, my mom lives off her retirement funds he helped her with and doesn't ever touch principal.    

[Rutting Buck]

Financial advisors are good and they have the goal of making you money over the long term.  If your looking for a short term win its like playing the lottery.  If you are on the long term track talk to an advisor.  The smartest thing I ever did is go against my advisors recommendation.  I toke my entire life savings and bought every share of Facebook I could afford when it went public for $28 per share.  He told me I'm going to loose my ass, I in return told him if there is ever a time to go a lap down its early in the race not at the end.  I still remind him that if I had taken his advice I would have lost out big time.  Now FB stock is around $130 per share.

Edited March 23, 2017 by Rutting Buck

[not on the rug]

Financial advisors are good and they have the goal of making you money over the long term.  If your looking for a short term win its like playing the lottery.  If you are on the long term track talk to an advisor.  The smartest thing I ever did is go against my advisors recommendation.  I toke my entire life savings and bought every share of Facebook I could afford when it went public for $28 per share.  He told me I'm going to loose my ass, I in return told him if there is ever a time to go a lap down its early in the race not at the end.  I still remind him that if I had taken his advice I would have lost out big time.  Now FB stock is around $130 per share.

Before FB went public I had suggested to do the same.  FB essentially rules the world.  I had 2 people I know who work in finance tell me that wouldn't be a wise decision.  I think about punching them every day. 

[TroutandBucks]

HH advise is spot on!

[Bucndoe]

If you do nothing with your money one thing is for sure. You will end up with a whole lot of nothing. If your place of employment offers anything, take advantage of it, especially if they do any type of matching. That is FREE money they are giving you. If not, start with the Haskell guy's advice and go from there.

Edited March 23, 2017 by Bucndoe

[mazzgolf]

I've been doing every one of those things that HH said for the last roughly 20 to 25 years. I'm amazed how much you can get with just putting money in vanguard's index funds (very low expense ratios). Do it religiously every month, and put in as much as you can bear (that plus max out your 401(k) if you can).

 

My money has lived through the early 90s downturn, the 2008 fiasco, and all the other ups and downs - and if you don't panic-sell (and have a decade or more to ride it out) those lean years are a great way to save even more money - buy low, sell high!

 

In short, unless you know what you are doing and can spend an enormous amount of time doing research - don't bother "playing the stock market" by buying individual stocks or even buying into those fancy funds (with their huge expense ratios). Just use index funds that ride the general market and you'll do fine in the long run (long meaning 2, 3, or more decades).

[mazzgolf]

BTW: I know they say its always a good time to start saving money, but the stock market has been on a tear the last several months to maybe even a year or so... so you'd be buying into a hot market right now with high prices. Don't be surprised if you get in now, and a year or two from now you are in the red. The stock market is bound to drop soon. But if you don't need your money in the next 10 years, it won't matter.