Wall Street

[SR]

Anyone been in this conversation for a while?

I've recently been forced into this in a fairly serious way and my first lesson was to learn of my complete ignorance of the markets. I have a financial advisor who has proven to be effective and trustworthy for many years, so I am thinking of ideas on an independent Eco 101 class. Of course, I know about the Journal and various periodicals, but perhaps someone knows of some texts that serve some utility for a dummy?

Any first hand experience(s)?

[SR]

not totally surprised....

[Essence_Smith]

I have a decent knowledge of the market and would suggest reading any of Peter Lynch's books...anything you can pick up by Buffet of course...Lynch gives the BEST introduction to the deeper workings in layman's terms you'll find...If memory serves I started with Beat the Street...in my personal experience I've actually followed a number of companies that if I'd invested in them 5 years ago they'd have paid off 3x what I bought em for, but I became aware of them thru tips more than my actual instincts...imo stocks are ehhh...total gamble imo...everything can be golden on paper and one piece of bad press or a bad quarter can make kill the stocks...

[Hype]

It all looks like BS to me. I don't know how any man on the street (lay investor) could actually make any money either by directing their own investments or through mutual funds/etc. When was the last time you heard of some random guy beating the market and living large on actual cashed-in investments? I'm sure it happens, just like people win the lottery.

[Pandemonium]

It all looks like BS to me. I don't know how any man on the street (lay investor) could actually make any money either by directing their own investments or through mutual funds/etc. When was the last time you heard of some random guy beating the market and living large on actual cashed-in investments? I'm sure it happens, just like people win the lottery.

I used to know a fellow graphic artist in the late 90's who got in on the ground floor of some software company's IPO. He basically took a big gamble and dumped his entire savings into the stock and made an incredible amount of money the first week. Of course, like a gambling addict, he thought he instantly was a stock wiz so he decided to get out of the graphics industry, move to NYC and live off of trading stocks. Although the last I heard (about 3 years later just after 9/11), he was doing alright, so who am I to judge (or mock).

My father-in-law poured about 25k into several oil company stocks and crude oil itself about 4 years ago just as the financial meltdown really started hitting hard and cashed out before this Summer. He more than doubled his investment and he knows almost nothing about investing. He pretty much did it for "fun."

[Hype]

It all looks like BS to me. I don't know how any man on the street (lay investor) could actually make any money either by directing their own investments or through mutual funds/etc. When was the last time you heard of some random guy beating the market and living large on actual cashed-in investments? I'm sure it happens, just like people win the lottery.

I used to know a fellow graphic artist in the late 90's who got in on the ground floor of some software company's IPO. He basically took a big gamble and dumped his entire savings into the stock and made an incredible amount of money the first week. Of course, like a gambling addict, he thought he instantly was a stock wiz so he decided to get out of the graphics industry, move to NYC and live off of trading stocks. Although the last I heard (about 3 years later just after 9/11), he was doing alright, so who am I to judge (or mock).

My father-in-law poured about 25k into several oil company stocks and crude oil itself about 4 years ago just as the financial meltdown really started hitting hard and cashed out before this Summer. He more than doubled his investment and he knows almost nothing about investing. He pretty much did it for "fun."

Sure. That's two people. That's like an anecdote from a guy who knows two guys who won the lottery. I'm not denying that it happens, I'm just skeptical about it working out really well for even a quarter of the people who invest their savings in stocks/funds. I'd be very surprised if more than a quarter of people who invest in funds make more than a 2-4% return (which is roughly equivalent to a decent GIC/high-interest savings account, anyway).

[Hokahey]

It all looks like BS to me. I don't know how any man on the street (lay investor) could actually make any money either by directing their own investments or through mutual funds/etc. When was the last time you heard of some random guy beating the market and living large on actual cashed-in investments? I'm sure it happens, just like people win the lottery.

I used to know a fellow graphic artist in the late 90's who got in on the ground floor of some software company's IPO. He basically took a big gamble and dumped his entire savings into the stock and made an incredible amount of money the first week. Of course, like a gambling addict, he thought he instantly was a stock wiz so he decided to get out of the graphics industry, move to NYC and live off of trading stocks. Although the last I heard (about 3 years later just after 9/11), he was doing alright, so who am I to judge (or mock).

My father-in-law poured about 25k into several oil company stocks and crude oil itself about 4 years ago just as the financial meltdown really started hitting hard and cashed out before this Summer. He more than doubled his investment and he knows almost nothing about investing. He pretty much did it for "fun."

Sure. That's two people. That's like an anecdote from a guy who knows two guys who won the lottery. I'm not denying that it happens, I'm just skeptical about it working out really well for even a quarter of the people who invest their savings in stocks/funds. I'd be very surprised if more than a quarter of people who invest in funds make more than a 2-4% return (which is roughly equivalent to a decent GIC/high-interest savings account, anyway).

All the guys I know that have wealth and invest it agree with you. For whatever that's worth.

I suppose it's the allure of hitting on that one transaction, that one big pot that draws people to it. Plus, there's a certain amount of control that makes it feel less like gambling. There have been multiple times where I thought "man, I should really buy some of that stock" and then regretted not doing so.

But yeah. I don't have money to blow, so I don't risk it.

[Pandemonium]

Sure. That's two people. That's like an anecdote from a guy who knows two guys who won the lottery. I'm not denying that it happens, I'm just skeptical about it working out really well for even a quarter of the people who invest their savings in stocks/funds. I'd be very surprised if more than a quarter of people who invest in funds make more than a 2-4% return (which is roughly equivalent to a decent GIC/high-interest savings account, anyway).

Well, using your own math, 25% is pretty decent odds doing well on the stock market even if you factor in the greenhorns who play the market on once in a while whims like my in-law did. The odds are certainly a far cry from any sort of 1 - 50 million+ lottery odds or beating any casino table odds.

[Hype]

Sure. That's two people. That's like an anecdote from a guy who knows two guys who won the lottery. I'm not denying that it happens, I'm just skeptical about it working out really well for even a quarter of the people who invest their savings in stocks/funds. I'd be very surprised if more than a quarter of people who invest in funds make more than a 2-4% return (which is roughly equivalent to a decent GIC/high-interest savings account, anyway).

Well, using your own math, 25% is pretty decent odds doing well on the stock market even if you factor in the greenhorns who play the market on once in a while whims like my in-law did. The odds are certainly a far cry from any sort of 1 - 50 million+ lottery odds or beating any casino table odds.

I didn't mean to imply that a quarter of people *would* make more than a 2-4% return. I was being generous. I suspect almost no one makes more than a 2% return.

I talked to an investment associate type person at the bank a while ago because I was curious about getting into it, and she was careful enough to make sure I understood that they used to promise 7% return, long-term, because the goal of mutual fund managers years ago was to beat the market, and the market could be expected to gain 7% over 10 years or whatever. They now specifically state that they can't promise that, and the market outlook is more like 3-5% over 10 years.

You can get GICs with returns almost as good as that (with zero risk), and at least when I did the research, there were very few mutual funds that were actually hitting that 3-5% return over 10 years. Of the ones that had been around pre-9/11, most of them were fairly stable, showing dips during recessions, but never quite recovering, or tracking the market. Why would you expect a fund manager to make YOU money? Their job is to get as many people as possible to buy their fund so they can receive the fees and make themselves money. That doesn't require successfully making anyone money, it just requires making it look like if you invest with them at any given moment, you'll make money (that might even include purposely losing money every so often so it looks like a "buy low-sell high" opportunity).

All the stuff I read seemed to say that if you wanted to try to make a better return, index funds would be the way to go (funds that are designed to track major indices), so that if the DOW or NYSE is up 10%, and you sell, you make a 10% return. But even then, that's not a guarantee (markets are so volatile right now, you'd be crazy to buy into a fund tracking indexes).

Anyway, I'm still skeptical, I don't think it's 1 in 4 who are making decent money with stocks, and I didn't mean to imply that that's what I thought it was. Maybe I should reword my original statement this way: I would be very surprised if more than one in 14 million people make enough money investing in stocks to justify the risk.

[Hokahey]

I would like to set up a small fund of money I can afford to lose to play with. If I make money, keep it in that fund. Never adding anything beyond my original investment. If I crap out then that would be that.

[Hype]

I would like to set up a small fund of money I can afford to lose to play with. If I make money, keep it in that fund. Never adding anything beyond my original investment. If I crap out then that would be that.

I thought about doing this also. I think one way to do it would be to take a significant amount of savings (say 10-25,000), if you have it, put that in a GIC for 5-10 years, which should net you at least a thousand, and perhaps a couple thousand, in interest. Then take the interest and invest that in stocks just to see what happens. Nothing's really lost, except the meager guaranteed gains you just spent 10% of your life accruing.

[Hokahey]

I would like to set up a small fund of money I can afford to lose to play with. If I make money, keep it in that fund. Never adding anything beyond my original investment. If I crap out then that would be that.

I thought about doing this also. I think one way to do it would be to take a significant amount of savings (say 10-25,000), if you have it, put that in a GIC for 5-10 years, which should net you at least a thousand, and perhaps a couple thousand, in interest. Then take the interest and invest that in stocks just to see what happens. Nothing's really lost, except the meager guaranteed gains you just spent 10% of your life accruing.

I'm talking about just taking like $1-2,000 and playing with it in pure stocks. Probably not enough to do much with but maybe over a few years it could turn in to a little stash.

[creep]

as the internet has advanced it has made the stock market a pretty risky way to make money. it's so reactive now....any sort of news about anything concerning the economy makes people react. now that you can buy and sell stocks from your phone on your own for a few dollars a trade makes everyone react. you can still make a lot of money day trading but that is really risky. there was an interesting story on 60 minutes on these super computers that are set up to day trade.

http://www.cbsnews.com/video/watch/?id=6945451n

[chaos]

I opened a Pax World Balanced Fund two years ago. This particular mutual fund seems pretty low risk. It has earned much more than a cd or savings account ever could.

Pax World is known for being environmentally and socially conscious, and seems to be designed for people who want to start investing in small sums. You can open an account with as little as $250.00.

[Hype]

I opened a Pax World Balanced Fund two years ago. This particular mutual fund seems pretty low risk. It has earned much more than a cd or savings account ever could.

Pax World is known for being environmentally and socially conscious, and seems to be designed for people who want to start investing in small sums. You can open an account with as little as $250.00.

It's an interesting fund: http://www.paxworld.com/our-products/pa ... anced-fund

The 1-year return is VERY high, but look at the 10 year (avg. annual). It's 3-5%, like I said. "Since Inception" isn't very useful, since you need to know when it started (if it started during a recession, of course it would make sense to see 8-9% return there... but you haven't owned the fund since inception.. so the 10 year is more accurate). You're not planning on holding onto it for 40 years, right? (Inception of the main fund was 1971... FYI: http://en.wikipedia.org/wiki/Nixon_Shock )

3-5% return *is* better than most/all GICs/savings accounts, but you're not guaranteed that if you invest now, that's just what it's done historically (it would be an inductive fallacy to conclude that you are likely to see the same rate 10 years from now).

That said, I hope when you're ready to cash it in, you make a decent amount. (This also means I hope the management fees and such aren't too high...)

[SR]

Mine is a legacy issue.

The market makes money. I'm not looking for a lottery......just sound, basic information on the rudiments to get a better understanding.

However, there have been "lottery" moments.




Granted, I skimmed here just now....but the talk of 2% returns with no allowance for longevity scares me (as far aas advice goes). This portfolio is looking at long term growth.

[SR]

I have a decent knowledge of the market and would suggest reading any of Peter Lynch's books...anything you can pick up by Buffet of course...Lynch gives the BEST introduction to the deeper workings in layman's terms you'll find...If memory serves I started with Beat the Street...in my personal experience I've actually followed a number of companies that if I'd invested in them 5 years ago they'd have paid off 3x what I bought em for, but I became aware of them thru tips more than my actual instincts...imo stocks are ehhh...total gamble imo...everything can be golden on paper and one piece of bad press or a bad quarter can make kill the stocks...

Buffet's reaction to the downturn in the markets for the last 5 years is nothing short of genius. He has the inimitable "magic touch". It helps that he acts as a de facto chair much like Greenspa did inasmuch as his word and confidence goes along way to assure the masses.

He retrofitted the market yesterday.

[Hype]

Read what I said more carefully. Also, we're none of us Buffetts.

Modesty ftw.

[SR]

Read what I said more carefully. Also, we're none of us Buffetts.

Modesty ftw.

OK.

[SR]

Read what I said more carefully. Also, we're none of us Buffetts.

Modesty ftw.

OK.

Btw, who is AS? Newbie or newly labeled? The latter I think.....

[Pandemonium]

Read what I said more carefully. Also, we're none of us Buffetts.

Modesty ftw.

OK.

Btw, who is AS? Newbie or newly labeled? The latter I think.....

He's Hypersonic.

[Hype]

I didn't mean the previous post to come across as saying that anything I said was all that great, I just really honestly think that since this is real money, life-savings, etc., that we're dealing with, that people ought to think *very* carefully, research extremely thoroughly, and *be* very cautious about how they invest.

It's my own attitude toward money, I guess, in that I don't even like to see people spend $5 a week on a lottery ticket (that's $110 a year they could be saving, donating to charity, or spending on their kids, or whatever), and it's *much* easier to lose much more than $110 by rushing into investments (esp. mutual funds), once you've started. The standard tactic the fund-sellers use to assuage your fears about this is "diversification", and in Canada, they require an "investor profile" before they'll allow you to invest at all. But the "profile" is BS. It *asks* you how much risk you're willing to take, and then won't allow you to overload your portfolio with funds that are outside that range. But that doesn't actually accomplish anything. "Low-risk" funds lose money all the time.

Going for individual company stocks, unless you get them for free, or are insider trading... seems worse than a crap shoot to me.

[esqfool]

I once had a "tip" from a person I work with, that I wouldn't put much trust in to get an order at McDonald's right much less a stock tip. The stock was at 80 cents, 2 years later it was at $80. Oh well, live and learn. I even had $3,500 to invest at the time. Still kick myself to this day over it, but I know I'd have got to probably $10 and been like HELL YEAH and cashed out.

[Hype]

I once had a "tip" from a person I work with, that I wouldn't put much trust in to get an order at McDonald's right much less a stock tip. The stock was at 80 cents, 2 years later it was at $80. Oh well, live and learn. I even had $3,500 to invest at the time. Still kick myself to this day over it, but I know I'd have got to probably $10 and been like HELL YEAH and cashed out.

I guess the problem is that everyone has friends with "tips", and almost none of them end up giving you a 100-fold return on your investment, but when they do, your brain goes: "FUCK! I COULD'VE HAD THE FLUSH IF I HADN'T FOLDED!".

[Hype]

For some reason my brain partially mistook $5 for $2... $5 a week for a year is $260, not $110.