Do you know anyone who fancies themselves a savvy investor?

[Anonymous]

And acts like their way of investing is the only way - but then they invest in questionable stuff?

I don't talk to people about money in real life bc it's personal, but I have a friend who talks about her investments constantly. She and her DH view themselves savvier than the rest of us "peons who just invest in index funds." Their words. But then they'll tell you they gave 100k to some out of state financial advisor who put it all in energy w/o even talking to them and now he isn't even beating the S&P. Or they'll decide one weekend that they should have an investment property and then go put an offer on one in an over developed area without any real research re is it rentable, how much would it rent for etc and then they'll consider buying said property with an exotic mortgage product so that the property debt isn't just secured by the property itself but also by their other assets. In a way it's impressive that they can throw 100k here and there but in another way it's like - really - are these good investments or just a way to tell friends about your wealth? Anyone run into this?

[Anonymous]

Everyone who has ever read this board knows plenty of people like that, yes.

[Anonymous]

Confidence is often inverse of actual skill or ability.

[Anonymous]

I liked reading Benjamin Graham's "intelligent investor" because it showed me how much hard work it was to be an investor like this. I doubt your friends would be convinced by all the arguments for index funds. Maybe recommend that book to them.

[Anonymous]

It takes luck to beat an index fund over the long term, and just about nobody gets that lucky year after year after year after year after year...

[Anonymous]

I kind of feel this way about people who buy "investment properties."

[Anonymous]

My mother's cousin married a guy who really is a great investor, but he was investing throughout the 90s when everything was going up up up and he was already a dermatologist so he was going to end up with a ton of money anyway. Plus he had been working his whole life and did not take wealth for granted.

[Anonymous]

When 80% of actively managed funds perform worse than the index funds, why bother? To be a really good "savvy" investor, is for many people a full-time job, or at least requires several hours a week.

I'd rather passively invest in index funds, and spend those extra hours playing with my kids or relaxing.

[Anonymous]

Me I have only invested in a few companies and flipped a home before the crash of 2007.

I don't brag about it though.

Even though if you read below it's BRAGGING.
People ask how are you able to build a new home in Arlington now?

I say dumb luck and I am frugal with certain things.

I invested in a company called Apple a while back sold my shares at around $700.

Took that money invested in renovated Arlington SFH, waited 2 years and sold the home by myself for over $100K Gain.
Took that money bought the largest lot OLD Arlington SFH I could qualify for in 2007.
Also, 2007 I reinvested by retirement funds went all in Small Index.

I feel I am lucky and practical. But by no means RICH and would love to get some advice from someone who invests for a living.
My new neighbor mentioned they have family home in Maine. That is subtle way to say I have generational wealth. I would like to pick his brain but need establish trust first.

In terms of giving advice, I try to ask basic questions.
Why do you want to INVEST now outside of Retirement?
What's the motivation?

[Anonymous]

Anonymous wrote:I kind of feel this way about people who buy "investment properties."

Not always true. If you are buying an investment property bc you have decided that yours is the next hot area and values will double in 2 yrs -- yeah -- that's hit or miss and chances are you don't have the same knowledge and savvy that a full time real estate developer would have. BUT if you're buying an investment property in a reasonable area where it'll always be rentable, after having done your research and not expecting that YOURS is the property that'll command $5000 rent when every place else in the area is at $2000 -- then you are building equity over the long term and setting up an income stream that you'll have later in life.

[Anonymous]

Anonymous wrote:Me I have only invested in a few companies and flipped a home before the crash of 2007.

I don't brag about it though.

Even though if you read below it's BRAGGING.
People ask how are you able to build a new home in Arlington now?

I say dumb luck and I am frugal with certain things.

I invested in a company called Apple a while back sold my shares at around $700.

Took that money invested in renovated Arlington SFH, waited 2 years and sold the home by myself for over $100K Gain.
Took that money bought the largest lot OLD Arlington SFH I could qualify for in 2007.
Also, 2007 I reinvested by retirement funds went all in Small Index.

I feel I am lucky and practical. But by no means RICH and would love to get some advice from someone who invests for a living.
My new neighbor mentioned they have family home in Maine. That is subtle way to say I have generational wealth. I would like to pick his brain but need establish trust first.

In terms of giving advice, I try to ask basic questions.
Why do you want to INVEST now outside of Retirement?
What's the motivation?

Did you read the question or just want to brag?

[Anonymous]

They sound insufferable and are clearly losing money on some of their ventures. I hope for them that the rest of their investments compensate for their mistakes.

We have shared with our close friends that we don't rely on our meager research scientist salaries alone to fund our lifestyle, and that some lucky investing in stocks have helped us along the way. We are considering diversifying in real estate as well. However, beyond that initial information, we have not talked about it.

[Anonymous]

yeah, I think if you have a 40+ year time horizon, do DRIP for as long as you can, and don't pay fees/taxes double-dutching individual stocks, products, etc. then you've got a good chance.

but even the very rich and the wealthy have a bunch of losing trades in their past. They just have the money to cover them up.

[Anonymous]

Anonymous wrote:
They sound insufferable and are clearly losing money on some of their ventures. I hope for them that the rest of their investments compensate for their mistakes.

We have shared with our close friends that we don't rely on our meager research scientist salaries alone to fund our lifestyle, and that some lucky investing in stocks have helped us along the way. We are considering diversifying in real estate as well. However, beyond that initial information, we have not talked about it.

I think some smart people think passive investing via index funds is boring. They think -- well ANYONE can do that, and I'm smarter than just anyone. That's when they start putting their money into more "interesting" things -- whether it's stock picking; or giving money to an investment manager who they are sure is "in the know" etc. I have a colleague like this. We work at a place where we're somewhat limited in what we can invest in (though practically any fidelity/vanguard fund/ETF is fair game) and she constantly complains about how she's missing out on TONS of private placement opportunities bc she is working there.

[Anonymous]

Define savvy.

A lot of very good investors believe that investing in index funds and being disciplined enough to let it sit there avoiding the temptation to "chase the dragon" is a very savvy move. You tend to avoid outsmarting yourself.