Investing

Discussion in 'Community' started by JesseJames, Jan 1, 2004.

  1. JesseJames macrumors 6502a

    Joined:
    Mar 28, 2003
    Location:
    How'd I get here? How can I leave?
    #1
    I'm really interested in investing my money in some kind of portfolio starting this new year. I want to be smart about it, considering all the disasters of the tail-end of the last century. To start off, I just ordered a U.S. Gold Eagle coin for a little over 400 dollars. I may buy more gold later. That's just to start. I think precious metals - especially gold - is a good investment. It's been called the "bedrock" investment.
    Tell me if I'm wrong for those in the know.
    I was looking into cattle futures also. I know that the Mad Cow scare might have rattled the market but I believe that it's just a passing concern.
    I'm pretty reluctant to get into the regular stock market until I do some serious homework.
    I'll look into bonds and the like; anything with great compound interest.
    To put it simply, I'm tired of working hard for my money. I want my money to work for me for a change.
    Any advice from investing vets out there?
     
  2. Stelliform macrumors 68000

    Stelliform

    Joined:
    Oct 21, 2002
    #2
    Well are you looking to gamble a little with your money or invest for retirement?

    I am investing for retirement. I saw a investment broker and I am invested in 4 different mutual funds ranging from risky to tame. And when I get money to invest I simply break it into those four.

    Not much fun, but from everybody I have talked to it is the safest and most sure method of investment. (And one of the guys I talked to retired at 43 with over a million in the bank. He managed this with frugal living and investing as much as he could afford in mutual funds with guaranteed returns.)
     
  3. topicolo macrumors 68000

    topicolo

    Joined:
    Jun 4, 2002
    Location:
    Ottawa, ON
    #3
    Re: Investing

    Well, if you're afraid of the stock market because of high risk or volatility, you shouldn't even THINK about futures.
     
  4. JesseJames thread starter macrumors 6502a

    Joined:
    Mar 28, 2003
    Location:
    How'd I get here? How can I leave?
    #4
    Thanks for the response Stelliform. Can't believe I only got one response so far whereas a thread like 'Have You Ever Been Drunk?' gets a thousand responses. Funny.
    Since it looks like I'm going to be around for awhile (can't believe I made it to 30) I have to (gasp!) plan for retirement. I'm a little sad, I don't want to get old and decrepit. But having money in the bank should make me feel better.
    I just got a years subscription to Money magazine for just under 10 bucks to start my financial education. I will be seeing an investment broker too when I'm ready. Mutual funds do sound like a good bet.
    Considering that I am a saucy bastard, I'll take a gamble here and there I'm sure.
     
  5. Stelliform macrumors 68000

    Stelliform

    Joined:
    Oct 21, 2002
    #5
    I am about to turn 30 also, I got one of those financial planning in your 20's and 30's for idiots books. It was pretty helpful in finding a direction. I treat my investments as an IRA. I can't invest too much, but I don't have much to invest. ;)
     
  6. absolut_mac macrumors 6502a

    absolut_mac

    Joined:
    Oct 30, 2003
    Location:
    Dallas, Texas
    #6
    Unchanging rules of investment...

    Most companies are in business to make money, not lose it. Unfortunately sometimes unpredictable things happen and companies do occasionally lose money. If that happens often enough, they go bankrupt and usually go out of business or get bought out at a huge loss to investors.

    So stay away from short term risky investments that promise huge profits unless you can afford to lose the money. Besides, Vegas is really a lot more fun for that type of thing, isn't it??

    So the general rule of thumb is stocks for long term investment - 10 years or more - bonds for short term. Real estate is virtually always an excellent long term investment.

    How you divvy your portfolio up depends entirely on what your expectations are, i.e. stocks 80% bonds 20% etc, but NEVER put ALL your eggs in one basket.

    As for gold, just remember that those that bought gold for $800 an ounce in the early eighties are going to have to wait a loooong time just to recover their losses :(
     
  7. jefhatfield Retired

    jefhatfield

    Joined:
    Jul 9, 2000
    #7
    good luck with investing

    recent history has shown us that being conservative with your investments is not just a point of view, but a necessity and no matter who pushes investing or how it gets acceptance into our mainstream culture, realize that investing is a form of gambling and invest only what you can afford to lose

    long term investments is more safe for most than short term investments and realize that many people who have become financially independent did it without funds and stocks
     
  8. yamabushi macrumors 65816

    yamabushi

    Joined:
    Oct 6, 2003
    #8
    The safest investment is actually US Treasury Bills. Their annualized return will generally get you just above inflation. This inflation protection is what makes T-bills safer than cash under your mattress. Your investment will be safe as long as the United States continue to exist.

    The safest stock investment isn't a mutual fund exactly, it is an index fund tied to as many stocks as possible. If the stock market market goes up, you win. Mutual funds are safer than investing in single stocks but still carry serious risk. The problem with mutual funds is that you are relying upon the fund managers foresight and skill to beat the market (or an index fund). Few are able to do this on a consistent basis over many years.

    Stay away from futures - they are best for professional investors only. Bonds are okay but are not as safe as most believe and tend to give only a little better return than you could get from T-bills. Precious metals are also best for professional investors.

    The best investment strategy you can have is to reduce your consumption of things you don't need, put that away in a safe investment and reinvest all of your money as securities mature. Buying, maintaining and improving upon a single family home that you live in is also an excellent investment.

    I caution that I have not yet earned my CFA or CFM. I advise you to always seek the advice of a professional when making any investment decision.
     
  9. jefhatfield Retired

    jefhatfield

    Joined:
    Jul 9, 2000
    #9
    what you say makes the most sense of anything i have read on this thread

    one question, are precious metals really that tricky? i don't really know anything about them but i know that the people i know who lost their asses where i live, south of san jose area, got killed in high tech stocks and stock options...even vegas looked better:p
     
  10. gwuMACaddict macrumors 68040

    gwuMACaddict

    Joined:
    Apr 21, 2003
    Location:
    washington dc
    #10
    Re: Re: Investing

    no doubt... don't mess around with that till you know exactly what youre doing... i dont know how old you are, but mutual funds would be a great way for you to enter the market. mutual funds take your money, and their managers buy lots of different stocks... this way your money isn't all in one basket. check out funds from janus, they have been doing particuraly well lately. also, roth IRA accounts allow you to invest money tax free... you ought to double check with a broker about this, but i think you can invest up to the ammount of money you claim for taxes in to a tax free account if you do it right... i did this a few years ago.

    if you dont know much about the market, and dont care to, go with a good mutual fund. and dont invest in too much in gold and the like, the market is a much better place to keep your money in my opinion- better growth, etc. but having some gold around would be safe too i suppose...

    hope this helps- best wishes :D
     
  11. yamabushi macrumors 65816

    yamabushi

    Joined:
    Oct 6, 2003
    #11
    Precious metals have moderate risk for a couple of reasons. First, while it can be psychologically reassuring to possess a bit of gold, metals fluctuate in value just like anything else. While the metal you own is likely to retain some value regardless, you could still lose a big chunk of your nest egg. Another problem is that the price you usually pay to purchase a physical piece of metal is rarely very close to the best market price. You also may have trouble selling the metal at the price you see in the newspaper. This is partly because you are dealing with relatively small amounts of the stuff.

    Also note that when you puchase metals in the form of coins or jewelry, you are actually puchasing a collectible item that happens to be made out of something precious. The difference is that if you later wish to unload the item you will have to sell it as it is in order to retain the most value and get the best price. You could sell it as scrap gold or whatever, but you will lose perhaps 90% of the value, depending upon the item. Therefore, you have to sell it to someone who wants to buy that particular coin or piece of jewelry (an online auction might help). Otherwise you may be forced to sell it to a pawn broker and again likely suffer a loss. Trading in collectibles therefore is best done by someone with experience and knowledge related to that particular type of item.
     
  12. kidA macrumors regular

    Joined:
    Jul 22, 2002
    #12
    A few pointers, some of which have already been covered, but always need to be reiterated:

    1) look for unmanaged (read INDEXED) mutual funds tied to a real trusty and hardy group of stocks like the S&P 500. that, without a doubt, is the best place to start. Vanguard, Fidelity, Schwab, Mass Financial, among many many other companies all have them.

    2) don't even try to dabble in individual stocks unless you really know what you're doing.

    3) stay far, far away from anything that says "futures" in it. futures are about as risky and complicated as it gets. they are for well-trained, experienced professional investors with lots of money (like a comapny's money, or something like it). not for average joes investing for retirement.

    4) yamabushi is right, US T-Bills are the safest investment. however, they won't get you anywhere.

    5) gold can be stable, but as has been noted, it was at over $800 in the 80s. so it can be volatile too.

    6) for short term investment, look for thing like CDs at your bank--right now they're not that great, but nothing is. with a CD, you can't touch the money until the CD matures every 3, 6, or 12 months, depending on the terms you define, but you will get a much higher interest rate than with a simple savings account. higher rates for longer terms, too. these are a good way to save up for a car, a baby, or some sorts of emergencies--they are pretty liquid as you have access to the money every 3 or six months or so. plus they are be FDIC/NCUA insured at less than $100,000.

    7) don't invest for the short term. if you want, as you say, money in the bank, because it will make you feel more secure, invest safely and don't invest for the short term. CDs, indexed mutual funds are great, great places to begin.
     
  13. mactastic macrumors 68040

    mactastic

    Joined:
    Apr 24, 2003
    Location:
    Colly-fornia
    #13
    Not very exciting or terribly profitable, but safe guaranteed returns.

    iBond

    And no, it's not an Apple product.:D
     
  14. JesseJames thread starter macrumors 6502a

    Joined:
    Mar 28, 2003
    Location:
    How'd I get here? How can I leave?
    #14
    Hey Arn, this has turned into an awesome thread. Lots of good advice here.
    How about a little section on page 2 for investor discussion?
    Think about it, open a CD with 1000 dollars and let it mature and you'll be able to afford that awesome new Mac down the road. Or just let the darn thing grow!
     
  15. Dont Hurt Me macrumors 603

    Dont Hurt Me

    Joined:
    Dec 21, 2002
    Location:
    Yahooville S.C.
    #15
    Hope this isnt to far off the thread but the best investment you can make is your home and land. This is really the best investment advice i can give.
     
  16. scem0 macrumors 604

    scem0

    Joined:
    Jul 16, 2002
    Location:
    back in NYC!
    #16
    I've been lurking around in this thread, but haven't posted anything because Investing is totally foreign to me.

    Would it be unwise for someone of my age (I'll be 17 in April) to think about Investing? I have almost $2000 to my name. That $2,000 is every cent I've ever earned since I was a baby. I am very tight about my money; I think I've only spent about $50.00 of my own money for my own things my whole life. Everything I own are gifts, things my parents buy me out of love, and things my parents buy me out of necessity :).

    Unfortunately I don't get an allowance. Many of my friends get $8.00-10.00 a month, (Let's see... If I had gotten an allowence for the past 6 years of $10.00 then I'd have: 10 dollars * 12 months * 6 years = another $720).

    Anyways, I'm not planning on spending large amounts of money any time soon. I was going to buy a new G5 with all that money, but I've decided to hold off. 1) I don't NEED that kind of power, but with the amount of time I spend on the computer, it would not only save time, but it would make everything a lot easier. 2) Its hard to justify spending a life's savings on something which could very well be obsolete in 2 years. 3) My Dad got a new 1Ghz 17" widescreen iMac from my Mom for christmas.

    So I'm going to use the new iMac for as long as I can stand it.

    So, how, when, and where should a person of my age invest their money?

    Thanks ahead of time,

    scem0
     
  17. mactastic macrumors 68040

    mactastic

    Joined:
    Apr 24, 2003
    Location:
    Colly-fornia
    #17
    That is so true. In my area the annual return on investing in a house has been close to 20% per year since 1998. And this is while the markets have tanked and investors have lost their shirts!

    I know a guy whose parents bought a house for him here when he went off to college. Him and his 3 friends lived there for 4 years and fixed the place up instead of paying rent (they were all construction management students). After 4 years his parents sold the house and after paying for their kids entire college education and 3 of his friends rents for 4 years, they still made over $100,000 from the deal.
     
  18. JesseJames thread starter macrumors 6502a

    Joined:
    Mar 28, 2003
    Location:
    How'd I get here? How can I leave?
    #18
    Man, I would love, absolutely LOVE to own property. Ideally, I'd like to own maybe 2 nice townhouses and just collect the rent off of them.
    How do you get the capital to actually get property? Are those late-night infomercials worth a crap? Like Carlton Sheets?
    Owning property is the best way. I know. But where do you start?
     
  19. Dont Hurt Me macrumors 603

    Dont Hurt Me

    Joined:
    Dec 21, 2002
    Location:
    Yahooville S.C.
    #19
    best place to start is to get your credit in good standing and go buy a small home or chunk of land from there its just a matter of playing monopoly sort of, keep it,fix it up, rent or sell it and do it again, expand etc. also if you are ever to retire its a good idea to own your home so you are not paying anyone after all usually for most folks a home is their biggest outlay of money. just my 2 cents.
     
  20. mactastic macrumors 68040

    mactastic

    Joined:
    Apr 24, 2003
    Location:
    Colly-fornia
    #20
    Trying to meet the 20% down payment is my problem right now. With the median house price hovering around $400,000 that means I need to have about $80,000 cash in hand to buy. Plus I am looking for something to fix up and sell, so I would also need some x-tra money for improvements. Get youself set up with excellent credit, and get a good real-estate agent. Those are your best tools for getting a good deal on a house. Buy the crappiest house in the nicest neighborhood you can.
     
  21. 7on macrumors 601

    7on

    Joined:
    Nov 9, 2003
    Location:
    Dress Rosa
    #21
    Land doesn't need a House. You could always buy a plot of land, there's plenty of it in the US midwest. Prolly could build a couple of houses then or rent to farmers to plant.
     
  22. rainman::|:| macrumors 603

    rainman::|:|

    Joined:
    Feb 2, 2002
    Location:
    iowa
    #22
    several of my ancestors have done this, purchased great amounts of land in the midwest in the 1800s, then rented it and managed it and passed it down the family. unfortunately it'll be a long time before i ever get my hands on any of it...

    paul
     
  23. tpjunkie macrumors 65816

    tpjunkie

    Joined:
    Nov 24, 2002
    Location:
    NYC
    #23
    Ok, so I don't have a ton of experience with investing, but i did just finish a winter internship with wachovia securities (today was actually my last day). The advice thats been given out here is pretty solid, the only thing I'd like to add is that investing in gold, while a fairly safe investment, is not going to yield very much growth at all, particularly when taking inflation into account. 1 dollar invested in gold in the year 1800 would be worth slightly over 11 dollars today. The same dollar in the stock market would be worth a few thousand dollars.
     
  24. JesseJames thread starter macrumors 6502a

    Joined:
    Mar 28, 2003
    Location:
    How'd I get here? How can I leave?
    #24
    Either way, it'll be cool to actually own a chunk of solid gold.
    Considering I'll never sell a half-million records or win an Olympic event.
     
  25. jefhatfield Retired

    jefhatfield

    Joined:
    Jul 9, 2000
    #25
    if you put down that eighty grand, which is a lot of money in other states, you prolly can get your house payment mortgage down to 2500 to 3000 a month...in monterey county, it's one percent or 4000 a month for a house that's 400,000 dollars and that is kind of nuts since there are no jobs that pay that here

    it's inherited money which rules the country and in high real estate areas like sf, sj, santa cruz, and monterey co., it's very hard to work a job and make enough to buy a house...so a lot of rich outside people buy up the property like playing cards and leave them vacant

    ...the local high schoolers, who are very bored, have found it a great hobby to party in these houses on the weekends, but very quietly as not to alert the police
     

Share This Page