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Investing for noobs.

By GlocknLoad follow GlocknLoad   2021 Mar 20, 10:37am 487 views   23 comments   watch   nsfw   quote   share      


I consider myself to be a new investor as far as being active. I have invested in many things but not as an active participant in 401k/stocks. I am struggling with understanding terms, types of funds, acceptable fees and strategies. Is there a comprehensive but not overly confusing book/website you suggest I get started reading?
1   Fortwaynemobile   ignore (3)   2021 Mar 20, 10:49am     ↓ dislike (0)   quote   flag        

I use Fidelity.com it’s pretty easy and there are no fees most of the time. I don’t day trade.

I buy and hold stocks with dividends. This has worked for me. You can also invest in IndexFunds. IF is just diverse preselected mix of stocks to reduce risk. It’s easiest way to invest.

My rule of thumb is if I see product flying off the shelf, I buy their stock.
2   stfu   ignore (0)   2021 Mar 20, 3:58pm     ↓ dislike (0)   quote   flag        

Spend a couple hours at bogleheads.org You'll save 10's of thousands.
3   clambo   ignore (5)   2021 Mar 20, 4:28pm     ↓ dislike (0)   quote   flag        

Herewith a summary
1. mutual funds are the essence of investing
2. buy mutual funds with no middleman, rather directly from the company.
3. Use Vanguard, T. Rowe Price, Fidelity, Primecap Odyssey, Dodge &Cox; forget the rest
4. stock funds are to appreciate capital
5. some stocks pay dividends, and funds exist which own them exclusively
6. Index funds are extremely low cost, and often very tax efficient compared to other stock funds
7. trading funds is ineffective (sell a fund to buy a hot fund)
8. Emerging market funds and specialty funds are not so great
9. mutual funds also provide income; they say this in their objective. Bonds and dividend stocks provide income.
10. use tax deferred accounts first.
Roth IRA, SEP-IRA for self employed income, Health Savings Account are great.
Individual stocks are fun to own but buy them after you have a lot of dough in mutual funds.
4   WineHorror1   ignore (1)   2021 Mar 20, 4:48pm     ↓ dislike (0)   quote   flag        

clambo says
Health Savings Account are great.

I have one of these also. I can invest this also?
5   clambo   ignore (5)   2021 Mar 20, 5:25pm     ↓ dislike (0)   quote   flag        

Winehorror,
You can invest your HSA in mutual funds.

I like Fidelity HSA for ease of opening the account and all Fidelity funds are available to invest in your HSA.

I used Fidelity Contrafund.

I recommend do not use the HSA as intended, rather, just max it out and then after 65 it’s like an extra IRA.
6   Patrick   ignore (1)   2021 Mar 20, 8:47pm     ↓ dislike (0)   quote   flag        

Again, I think mutual funds are always a mistake.

Buying mutual funds means giving away fees you could keep for yourself simply by buying the underlying stocks in the fund and holding them.

Think of mutual funds like a casino: if the lights are on, the customers are losing money.

If the mutual fund exists and is paying "fund managers", the customers are losing money.

The good news is that it's trivial to look up which stocks a fund holds and just buy all those stocks yourself.
7   WineHorror1   ignore (1)   2021 Mar 20, 9:06pm     ↓ dislike (0)   quote   flag        

Patrick says
The good news is that it's trivial to look up which stocks a fund holds and just buy all those stocks yourself.

That's an interesting idea but, how do you know the weighting?
8   Blue   ignore (0)   2021 Mar 20, 9:11pm     ↓ dislike (0)   quote   flag        

Patrick says
Buying mutual funds means giving away fees you could keep for yourself simply by buying the underlying stocks in the fund and holding them.

True, but most of the folks are not able to pick the right stocks and timing to buy/sell. At lease pick the low cost vanguard funds is a good way of investing for average folks.
9   WineHorror1   ignore (1)   2021 Mar 20, 9:17pm     ↓ dislike (0)   quote   flag        

Blue says
most of the folks are not able to pick the right stocks and timing to buy/sell

I thought mutual funds were "set it and forget it".
10   Patrick   ignore (1)   2021 Mar 20, 9:20pm     ↓ dislike (0)   quote   flag        

WineHorror1 says
That's an interesting idea but, how do you know the weighting?



They prospectus usually tells you the weighting, but that's all pretty arbitrary anyway.

Blue says
most of the folks are not able to pick the right stocks and timing to buy/sell.


They don't have to pick. Just copy the mutual fund you were going to buy. Buy the underlying stocks.

Timing is also easy: buy now and don't sell. OK, sell when you need the money in retirement.
11   mich   ignore (0)   2021 Mar 20, 9:40pm     ↓ dislike (0)   quote   flag        

Depends if your more into fundamentals then Phil Town is a good resource or Technical Analysis stan weinstein book on stage analysis is excellent and covers trading or investing. https://www.investors.com/ is both - I read the big picture every day to understand what's going on.

I'm investing and trading just using stage analysis. Sometimes I'll use IBD to scan the stocks. For investments, I'm more focused on what's cheap or cyclical moves and major trends. i.e. Uranium supply crunch, Fertilizer - supply issues and stagflation. It's working out nice - hope that helps ;)
12   Blue   ignore (0)   2021 Mar 21, 2:03am     ↓ dislike (0)   quote   flag        

Few years ago I rolled over my IRA to a place who is working with all value investing. All stocks looked great in my broker managed account but unable to beat indexes. One day just moved out.
13   clambo   ignore (5)   2021 Mar 21, 6:23am     ↓ dislike (0)   quote   flag        

I am confused how a fund which has a management fee (expense ratio) of 0.05% (Vanguard index fund) is somehow expensive.
For a million dollars invested, the fee would be 500 bucks.
The fee for Vanguard Equity Income is 0.19%
For a million dollars invested, that’s $1900 for Wellington in Boston to manage your money and they are one of the original managers of money; the founder of Vanguard worked here and learned the business.
Recall that Fidelity has a “zero fund”. with no fees of any kind. I own this one but don’t have a lot of money in it.
14   WineHorror1   ignore (1)   2021 Apr 15, 6:07pm     ↓ dislike (0)   quote   flag        

I asked my Merrill Lynch advisor for a list of low fee Index Funds to choose from. He sent me 3 suggestions.
1) Vanguard Russell 1000 Growth ETF
2) Vanguard Financials ETF
3) Vanguard Russell 1000 Value ETF

I do not see the word "Index" in these names. Any advice on what to look for in the marketing materials he sent me?
15   clambo   ignore (5)   2021 Apr 15, 6:18pm     ↓ dislike (0)   quote   flag        

I like index funds rather than ETFs usually.
I own Vanguard Index funds as follows:
Vanguard Total Stock Market Index
Vanguard Extended Market Index
Vanguard High Dividend Yield Index
Vanguard Mid-Cap Growth Index

I've got too many but I can't sell them without large capital gains taxes so I'll let them ride.
16   WineHorror1   ignore (1)   2021 Apr 15, 6:45pm     ↓ dislike (0)   quote   flag        

clambo says
I like index funds rather than ETFs usually.
I own Vanguard Index funds as follows:
Vanguard Total Stock Market Index
Vanguard Extended Market Index
Vanguard High Dividend Yield Index
Vanguard Mid-Cap Growth Index

I've got too many but I can't sell them without large capital gains taxes so I'll let them ride.

I find it interesting that my advisor did not do as I asked. I asked him to send my choices of Low Fee Index Funds.
17   just_passing_through   ignore (9)   2021 Apr 15, 9:59pm     ↓ dislike (0)   quote   flag        

WineHorror1 says
I find it interesting that my advisor did not do as I asked. I asked him to send my choices of Low Fee Index Funds.


The companies I work for transfer my 401K (just the one they have) to new brokerages an average of every 1.5 years for the past 7 years. Every time I give specific instructions for what I want it put into and they ALWAYS ignore that and put it into other shit.

Then I have to log in after the transfer and fix that shit.

Then they charge ridiculous fees for it just being there in a money market even. So I always transfer to my personal brokerage asap when I quit. No fees there for it hanging around not invested.

Fucking scammers.
18   clambo   ignore (5)   2021 Apr 16, 1:49pm     ↓ dislike (0)   quote   flag        

wine horror,
Take a gander at Vanguard website.

They have a list of their funds and ETFs with "fund profile" and other information.
19   Misc   ignore (1)   2021 Apr 17, 3:26am     ↓ dislike (0)   quote   flag        

The funds he sent you were a list of were "index" funds.

The populous has been marketed to for over 20 years that "index" funds are how smart people invest.

Wall Street has responded by creating a plethora of "index" funds. There are now more "index" funds than there are stocks trading on the NYSE.

Happy hunting.

I would recommend doing your own research even in regards to "index" funds, as they may not have investments you would find worth while.
20   clambo   ignore (5)   2021 Apr 17, 8:04am     ↓ dislike (0)   quote   flag        

I am beating a dead horse here.

Index funds are fine, and have a few small advantages to ETFs, which are also index funds which trade like stocks. An index fund is preferred to an ETF for long term investments.

The key to an index fund is it will not underperform the stock market because it’s a representation of the stock market. Some managed mutual funds fail, and are worse than the index.

I prefer managed funds for retirement accounts.

I was just on the phone to my ex girlfriend of 1983. She now has some bucks.
She’s paying an “adviser” for her investments. The fee is 1%.
She said she now has $900,000
“So, you’re paying someone $9000/ year (and rising) to do nothing, that’s like burning 9 grand in the street.”
She’s still working!

She resists figuring it out or letting me help her.
21   just_passing_through   ignore (9)   2021 Apr 17, 12:15pm     ↓ dislike (0)   quote   flag        

I'm considering buying into an index or ETF for commodities with divys for a very long term hold. Very long.

Like food or something.
22   Hircus   ignore (0)   2021 Apr 18, 12:05pm     ↓ dislike (0)   quote   flag        

just_passing_through says
I'm considering buying into an index or ETF for commodities with divys for a very long term hold. Very long.

Like food or something.


Are you thinking kinda like as a replacement for the stability portion of your portfolio, like how bonds have been historically used? Or more as a growth story, betting on rising food costs?
23   just_passing_through   ignore (9)   2021 Apr 18, 12:12pm     ↓ dislike (0)   quote   flag        

Hircus says
Or more as a growth story, betting on rising food costs?


Food and materials like Uranium. Uranium would be a 3 year hold. I'm pretty much an amateur when it comes to commodities though. I'm also shit when it comes to understanding expense ratios and stuff like that. I need to read a bit more.

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