Reply to Give me your best monetary advice

Forum Index » Money and Finances

Reply to "Give me your best monetary advice "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]FYI, I find the CNN/money personal finance 101 series to be pretty helpful-- covers things like insurance, not just investing.

Also, don't try to beat the stock market and don't put money in the stock market you need in the next 5 years-- just look for a low cost index fund and leave the money there during ups and downs.[/quote]

Surely, it is fine to purchase some diversified ETFs like VTI and VWO, however you will benefit from owning individual corporate equities. The best way to learn to play soccer, poker, or the stock market is to be in the game. Index Funds are sure and steady and perfect for individuals who don't have the time or the interest to closely follow the economy and the stock market. Index funds like VTI, own shares in 500 different corporations which creates stability. At any given moment in time the price of some of those corporations will be increasing and some will be decreasing. On average your wealth will increase by roughly 5% annually.

For the disengaged investor that's fine. You're not getting rich but your not losing money either. At retirement you'll be comfortable, but not rich.

The problem with this approach is that you're not really in the game. You're not learning how the investment game is played. If you are not investing whatsoever in individual companies you have no vested interest keeping track what companies are going up or down and why these changes are taking place. If you allow and even pay someone else to make you investment decisions for you, you are essentially putting on blinders to opportunities that regularly appear in the stock market.

If you are to busy or not interested in the stock market, then by all means you should buy nothing but index funds. However, if you are watching the world around you and you are conscious of macro economics and the consumer goods you and others are buying then you have the innate skills individuals need to generate vast wealth in the stock market over a period of several decades.

Start by buying shares in well established companies which have increased their dividends annunually for decades. Automatically reinvest your dividends to purchase more shares. During these future years as an engaged investor you will develop an innate sense about the successfulness of your equities and other that you do not own as well. It's like being a Nats fan, but also having a sense as to how the Braves are doing as well.

Now and then for unforeseen reasons there will be instances when good well established companies will miss their projected earning numbers and the price of their shares will be crushed. Sometimes these companies are doomed, but in other instances there are other explanations like weather, supply chain disruptions, or even the banking crisis.

"Contrarians" are able to spot rapid stock price declines cause by temporary business anomalies.

For those who are engaged in the market huge quantities of wealth can be gained by contrarians when they spot these temporary price disruptions. If you are so inclined you can accumulate generational wealth in the stock market, but for those who lack this potential, interest, or skill set required the learn they should buy index funds.[/quote]

This is terrible advice. Its wrong on so many levels. I'm not going to criticize every crap idea here, but here's one that I can't let stand: Picking stocks isn't a skill. It is luck only, no different than playing roulette. [/quote]

NP here - I disagree with the roulette/luck comment and generally agree with the long-winded post about the benefits of investing in stocks.  I have learned a ton over the years from researching individual companies and making targeted investments.  I would never put a huge portion of my savings at risk, but it's fun and rewarding it to have a small individual stock portfolio once you have are set with an emergency account plus other savings.

It's not random luck either.  My stock investments have performed spectacularly, as have those of most people I know to really get into the research.

[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics