The Investment Thread

[wallus]

I am at that point in my life where I am going to start investing in a more personal manner. I have retirement accounts which do not require a lot of work. I am looking at income generators and wanted to start a thread where we could share ideas, articles, etc.

 

Right now I am leaning towards more real estate versus putting it in the market.

[nate82]

I am at that point in my life where I am going to start investing in a more personal manner. I have retirement accounts which do not require a lot of work. I am looking at income generators and wanted to start a thread where we could share ideas, articles, etc.

 

Right now I am leaning towards more real estate versus putting it in the market.

 

If you are going the real estate route what kind of real estate are we talking about? Business or housing?

 

Real estate can be more riskier than the market and can be harder to sell or lease.

 

Gold and silver can still get you nice returns just don't buy coins they are harder to sell ie. melt value is not worth it get bars instead and cut them up and sell when above market.

[wallus]

Housing as I have one duplex now and it isn't that difficult. Luckily, I purchased this property in the nice part of the town and have never spent a dime getting it rented out to quality tenants.

 

I honestly have no knowledge on gold and silver investment. Is that what you buy/sell?

[homer]

Given the expected rise in inflation, real estate is a good place to be.

[brewcrewdue80]

I can't add much to this. I invest modestly in stocks. Late in 2015, I came upon more of IPO investing and done well thus far. They are supposed to be risky investment, but I've only gone in stocks that hadn't popped, seem to read as having some interest by others to invest, and I think it is in a promising type of market I guess.

Take Snapchat, which had it's IPO last week. I had interest at the reported initial price offering of $14-16. Big timers who get first dibs on the "Initial Public Offering" bought in at $17. So when it truly began Public Offering, meaning Joe Schmo(me) can buy it himself, It opened at something like $23.50. Making $6.50 for the rich folks that are allowed the dibs and Joe Schmo Buying off their shares at a +38% gain and +46% above their proposed high initial price offering. In just a few days/hours/minutes it got as high at $29.44. which if you lucked in to that exact moment meant you as Joe Schmo made about 25%. If you held on for further well it closed today at 23.77 or less than 1% gain for you.

This example I stay away from. You want to get the initial pop and that initial pop was your first buying opportunity past the pop.

So, move on.

 

I look for the types I can get in within the asked for price range give or take a small pct. gain. My targets have done well and my patience done well too, not to buy in post initial pop.

 

Now if you're close to retirement age this isn't an idea you want to look for investing due to the risk. If you're somewhere around younger age 24-40 maybe? Something to play with your money. I look at these risky investments as being better than buying lottery tickets or playing money in a casino. Keeps me from going out and spending $5-20 when a Powerball or Mega Millions gets way up there.

 

So if anyone is in that kind of investing then we can trade on info or debate potential IPOs to look in to.

[nate82]

Given the expected rise in inflation, real estate is a good place to be.

 

If you can get into real estate now or are already in it then yes. If the Fed does increase the interest rates to where they should be rental properties will be even better as there will be less and less people who will be able to afford to buy a house. If you are going into real estate to flip houses I would hold back until there is more information about what the Fed is going to do in terms of interest rates. Having less buyers if the interest rates do go up will put a hurt on home sales but rentals should see an increase.

[superfly]

A stocks thread? Count me in! Don't know as much about real estate though, still trying not to pay through the nose on a first house let alone real estate investing.

 

 

Brew, IPO's can be tough sledding from my experience but there are definitely gems out there that go overlooked. Biotechs can be sneaky good if one knows what they're looking for. Alot of the IPO's i've seemed to notice it often takes a year or two to work out the sellers / lockup expiry (the insiders can sell at X date) before they head upward though. Give POLA a look, been watching it for a bit now but haven't bought in yet...my account is pretty small so have to pick and choose what i'm in rather than a broad basket.

[brewcrewdue80]

No, I'm strictly short on these IPO buys. I've bought 6 total thus far, Sold out on 5 of them with gained avg over 45% on those 5. The 6th has made money, just not where I want to sell out, happens to give a dividend so I trust it will continue modestly well.

 

In 2015 I tried Dividend types. Lost big time on one(oil) The other took awhile. Trial and error. 3 different type of stocks dealing with oil. Taught me how the market can feed in a sector and which sectors sorta hit miss. Like you suggested biotech can be huge gains or losses. Oil is going to be mostly a losing preposition for some time. So it's sorta come to pick something in IPOs that have usefulness or potential usefulness. The hot ones are Tech stuff. The Trade Desk and Everbridge were two I missed out on. Part due to the early pop no shop. Part because I made mistake on symbol for trade desk. thinking tdd and not ttd. Oops. Snap sorta fell in that line of Tech, even though it says it's camera, but again early pop no shop. Healthcare is one I look for and hit on 3 of them.

 

Oddly, an upcoming IPO is something that I believe I seen in the bothering you thread. Canada Goose those overpriced Parka Coats. They have a lot of good numbers going for them to have a short-term pop, maybe even lasting through a year somewhat steady in price. But $1,000 coats aren't exactly being bought up by blue collars. So the trendy White Collars are making this coat a lot of money right now, but at some point, the trend will end. Having a stock price of say $11-12 doesn't take much a big hike to go up 33% or more. I could see hype jumping this to $16-18 maybe even 20 in no time before the shine fades off and settles towards a modest price. So I'm looking to keep an eye on that.

[wallus]

Given the expected rise in inflation, real estate is a good place to be.

 

If you can get into real estate now or are already in it then yes. If the Fed does increase the interest rates to where they should be rental properties will be even better as there will be less and less people who will be able to afford to buy a house. If you are going into real estate to flip houses I would hold back until there is more information about what the Fed is going to do in terms of interest rates. Having less buyers if the interest rates do go up will put a hurt on home sales but rentals should see an increase.

 

This is exactly what I am thinking. The local market where I am seems to be overpriced for the rents that can be gotten.

[davego]

I'm a boring mid-cap 401k and Roth guy.

[pacopete4]

I've always wanted to play the stock market a bit but I'm not even sure where I would start.

[superfly]

I've always wanted to play the stock market a bit but I'm not even sure where I would start.

 

Most rewarding, and the most frustrating thing in existence. If you try it you will likely lose money to start, but get a strategy down that fits you (it's different for everyone) and stick to it. Mine is small cap biotechs. Obey max loss tolerance at all costs and bail when it's obvious to, don't "hope" for it to turn around. As long as you keep yourself in the game and don't blow up you will succeed and feel achievement you've never felt before.

 

Oh...and don't fall for the "gurus" selling services. There are a few really good people out there that want to show you the way, but stay 100 miles away from anything that says "rich" and "fast," or "turned X into XXXX in a few months." It doesn't work that way out of the gate.

[pacopete4]

I've always wanted to play the stock market a bit but I'm not even sure where I would start.

 

Most rewarding, and the most frustrating thing in existence. If you try it you will likely lose money to start, but get a strategy down that fits you (it's different for everyone) and stick to it. Mine is small cap biotechs. Obey max loss tolerance at all costs and bail when it's obvious to, don't "hope" for it to turn around. As long as you keep yourself in the game and don't blow up you will succeed and feel achievement you've never felt before.

 

Oh...and don't fall for the "gurus" selling services. There are a few really good people out there that want to show you the way, but stay 100 miles away from anything that says "rich" and "fast," or "turned X into XXXX in a few months." It doesn't work that way out of the gate.

 

 

I feel like my first step would be buying a playing the stock market book for dummies. Just to understand more of the lingo.

[GAME05]

This should be a fun thread. I'm slowly getting into investing since I've finally found a job. It's partly to feed my gambling itch and partly because 401Ks don't tend to beat the market and so I want to do a lot of it myself. I have 5% going to a 401K (I either use that or get nothing at all, so obvious choice) but want to focus on paying off my school loans before I start putting a lot in each month.

 

Rule #1 Podcast is a good place to start to learn about basics and terms. It's focus is value investing and not a lot of short-term moving around.

 

I also use this Graham Number Calculator: http://dqydj.com/graham-number-calculator-for-stock-ticker-you-enter/

 

I also use Dataroma.com a lot. Any fund worth $100M+ is required to list their buys and sells with the SEC quarterly. It doesn't hurt to just do whatever Charlie Munger is doing, but I tend to look for people who don't move that much around, look for something whose value hasn't changed significantly since the person purchased it, make sure it's in an area I understand, and do my own research on it. A UNLV study was actually done on this covering about 30 years' time--they bought the stocks that Warren Buffet bought on the day it became publicly known at the worst price that day, and then sold it when the sell became publicly known at the worst price that day, and that still resulted in an average 25% gain per year.

[RobDeer 45]

I've always wanted to play the stock market a bit but I'm not even sure where I would start.

 

I've always thought the best way to figure out the stock market a bit is to pick a company or industry you already know something about. Like if you are in to video games. Which company do you think is coming out with content ahead of its time. Take that company and start researching it more. Than compare it to some other companies and figure out which one has the best long term potential. If you already know a lot about the topic, it's much easier to start to figure out which companies might be good stocks to target. I would highly suggest that your first purchase (or couple) should be companies that you want to own longer term. It's much more complicated to go in with the mindset that you are only looking to buy and then sell a week later for a profit. Look for something you can hold for a couple years because you think their long term potential is there.

 

Next bit of advice is don't overreact to news once you own the stock. If you sell every time a bit of bad news comes out, you will lose. If the main reasons you picked the stock in the first place, haven't changed, you should continue to believe in that company.

 

Just my two cents, but I think diving in to something you already enjoy and have some opinion on, can make this very enjoyable.

[pacopete4]

I've always wanted to play the stock market a bit but I'm not even sure where I would start.

 

I've always thought the best way to figure out the stock market a bit is to pick a company or industry you already know something about. Like if you are in to video games. Which company do you think is coming out with content ahead of its time. Take that company and start researching it more. Than compare it to some other companies and figure out which one has the best long term potential. If you already know a lot about the topic, it's much easier to start to figure out which companies might be good stocks to target. I would highly suggest that your first purchase (or couple) should be companies that you want to own longer term. It's much more complicated to go in with the mindset that you are only looking to buy and then sell a week later for a profit. Look for something you can hold for a couple years because you think their long term potential is there.

 

Next bit of advice is don't overreact to news once you own the stock. If you sell every time a bit of bad news comes out, you will lose. If the main reasons you picked the stock in the first place, haven't changed, you should continue to believe in that company.

 

Just my two cents, but I think diving in to something you already enjoy and have some opinion on, can make this very enjoyable.

 

Thanks. I appreciate the advice and it sounds like a solid idea. Maybe that is where I will start.

[homer]

Given the expected rise in inflation, real estate is a good place to be.

 

If you can get into real estate now or are already in it then yes. If the Fed does increase the interest rates to where they should be rental properties will be even better as there will be less and less people who will be able to afford to buy a house. If you are going into real estate to flip houses I would hold back until there is more information about what the Fed is going to do in terms of interest rates. Having less buyers if the interest rates do go up will put a hurt on home sales but rentals should see an increase.

 

Yes, I did not mean flipping houses. Fixed interest rate borrowing.

 

Can also invest in a REIT if you can't buy real estate.

[homer]

I'm a boring mid-cap 401k and Roth guy.

 

I switched all my retirement accounts to index funds. Fees are way cheaper and over time you do exactly the same as trying to beat the market.

[homer]

This should be a fun thread. I'm slowly getting into investing since I've finally found a job. It's partly to feed my gambling itch and partly because 401Ks don't tend to beat the market and so I want to do a lot of it myself. I have 5% going to a 401K (I either use that or get nothing at all, so obvious choice) but want to focus on paying off my school loans before I start putting a lot in each month.

.

 

I would do that math on that before committing to paying off the student loans. If your company is matching your 401K and your student loan interest rate is low, then over the long haul you end up with more money investing in your 401K (assuming it beats the interest on the student loan). I'm in the same boat and found an online calculator to help figure it out.

 

https://studentloanhero.com/calculators/student-loan-payoff-vs-invest-calculator/

[GAME05]

I agree with you in a sense. I definitely would make more money in the long term by investing additional money and not being in a rush to pay off the loans. Even at a modest return I'd calculated about $800 more that I'd make with investing to the point my loans were paid. But I decided that being entirely debt-free is worth more than $800 to me. I'll still check out the calculator you posted and see if my own figures were about right, though. Thanks.

[wallus]

I agree with you in a sense. I definitely would make more money in the long term by investing additional money and not being in a rush to pay off the loans. Even at a modest return I'd calculated about $800 more that I'd make with investing to the point my loans were paid. But I decided that being entirely debt-free is worth more than $800 to me. I'll still check out the calculator you posted and see if my own figures were about right, though. Thanks.

 

There is a certain value to not having debt on your personal books. I know that it probably would have made more sense for me to not pay off my student loan and mortgage as soon as possible but it sure feels good.

[Patrick425]

I'm a boring mid-cap 401k and Roth guy.

 

I switched all my retirement accounts to index funds. Fees are way cheaper and over time you do exactly the same as trying to beat the market.

 

Imho, best post/advice in this thread, especially if you are looking for long term retirement type saving.

 

.....sorry for the long post, and I know all the posts above are not necessarily about retirement savings planning, but I'm all for people taking a vested interest in their own financial futures.

 

Save early and diversify your investments. If you in your 20's or 30's you should have no less than 80% of your retirement savings in equities. As your savings grow, you should be sure you diversify among large cap, mid cap, small cap, and international. This can easily be done with Index funds either with just core index funds or also adding growth and value funds (although, I feel the core funds alone are fine). Non-equity money can be invested in an Intermediate bond fund. The only caveat to this is remembering to rebalance your portfolio quarterly or semi-annually. Otherwise, target-date funds are another option and will automatically rebalance and become more conservative as you get closer to retirement.

 

I have 5% of my retirement money in individual stocks and it's more of just a "fun" thing to do without risking too much of my total savings. I would caution anyone against putting too much of their retirement money into individual stocks. My wife works for a company were all employer contributions to 401(k) goes into the company stock. While the stock has done well over time, I always try to have her keep her total investment in the stock at no more than 15% of the total...and preferably closer to 10%. I'm sure many former employees of companies of Enron and Worldcom wish they had done the same.

 

I think the US does a bad job in general of educating students in primary education regarding financial planning in general. There are too many 25-35 year olds that either feel like they can't afford to save (which is usually not true, they actually can't afford not to save) or that don't understand/trust the market. The average person only pays attention to news regarding the stock market when there are drastic downturns. The S&P 500 has never had a negative return in any 20 year period and very rarely has it ever had a negative return in any 10 year period. Over long periods of time the market has always gone up. There is no guarantee that that will always be the case, but I'm not going to bet against history. Diversify and don't panic during downturns in the market. To me, trying to time the market is a fool's game.

[Patrick425]

I agree with you in a sense. I definitely would make more money in the long term by investing additional money and not being in a rush to pay off the loans. Even at a modest return I'd calculated about $800 more that I'd make with investing to the point my loans were paid. But I decided that being entirely debt-free is worth more than $800 to me. I'll still check out the calculator you posted and see if my own figures were about right, though. Thanks.

 

There is a certain value to not having debt on your personal books. I know that it probably would have made more sense for me to not pay off my student loan and mortgage as soon as possible but it sure feels good.

 

 

Not to mention that if you pay off loans earlier and reduce your debt, your credit score will increase. This in turn will increase your chances for any loans you may need in the future and will also get you better interest rates on those loans.

[RobDeer 45]

I agree with you in a sense. I definitely would make more money in the long term by investing additional money and not being in a rush to pay off the loans. Even at a modest return I'd calculated about $800 more that I'd make with investing to the point my loans were paid. But I decided that being entirely debt-free is worth more than $800 to me. I'll still check out the calculator you posted and see if my own figures were about right, though. Thanks.

 

Simple way to look at it is if you invest properly in equity based mutual funds/ETFs, you can typically bank on ***7-10% returns over a 10 year period (also assuming this is in your retirement account so you aren't paying taxes on gains). That will fluctuate from year to year, so you need to remember this is long term. Compare that to the interest rate you are paying on your loan. If it's close, it's probably up for debate. If one is quite a bit higher, that will tell you where to put your money.

 

I guess you should also figure in the fact that money that would go towards your loan would be taxed as income. Money going in to your 401k would not get taxed. Added benefit to saving for retirement. You also get to write off your student loan interest amount.

 

I was lucky to consolidate my loans right out of college at an extremely low rate. Rates were super low. I've decided my money is better off invested in retirement as apposed to paying off my loan. Higher interest rate loans/credit cards should always take precedence over the retirement money, in my opinion.

 

Just my two cents.

 

***I didn't have the time to double check that figure. I used to be in the financial planning industry and I believe that was the figure that was usually thrown around. You could ask a financial planner or probably get that online, but I believe that to be the number roughly when looking at what the market has returned on average.

[FVBrewerFan]

As a contrarian when it comes to most things, I ignore the First Commandment of investing- don't jump in and out of the market.

 

I don't claim to hit the very top and very bottom of every time, or any time. But I do start re-allocating my funds in 401k/ Roth IRA from stock funds to bond fund when I see signs we may be reaching a bubble or peak. (Now is one of those times, for example.)

 

That doesn't mean I go 0% in the market. It just means I start backing off in steps. Then, in times where it couldn't look more bleak, I begin buying again in steps.

 

Have I missed out at the very top at times not having 100% or close to that in equities? Sure. But I've figured I have at least broken even doing it this way, and a couple times came out well ahead. Not saying it's right or wrong, just what I've been doing for about 20 years now.

 

Finally, I only have a handful of individual stocks left. I have learned through the years I can't compete with market makers. I can do all the research in the world, but I don't know what the institutions know. So I'll trade a few stocks here and there, but when I buy stock now it's almost all S&P 500 ETF.

 

Great discussion here though, always curious what others really do.