Wanting to Begin Investments

Just wanted to add a couple more books to the thread. I have read (listened to, audio books, a great thing for road trips or on your way to work, small tid bits of info at a time) these books and was happy with the information.

If you a looking for a basic passive way to invest with very, very low fees.
The Bogleheads' Guide to Investing

The Four Pillars of Investing: Lessons for Building a Winning Portfolio

Anyone who does a lot of driving I recently joined Audible. For years I thought it was very expensive so I didn't join. Did some more investigating and found out you can pay $22 a month for 2 books. PLUS you get at least 20% off of all other books. This has really helped advance my knowledge in investing.

 

Here is my advice, and please keep in mind that it's worth every bit of what you've paid for it. If I were you As an 18/19 y/o college student I would focus on my education first, but not just studying and making good grades. The decisions you make regarding your college education are not unlike some of the decisions a business owner makes. Business owners make decisions and invest in their businesses, because they plan on making even more money off those investments. As long as you're in school, then your spending money not making it. Stay focused, and at least graduate on time if not earlier. Keep your expenses as low as possible, and avoid student loan debt. Personally, I didn't go to college to party, network with others, find my true self, become an educated man, or any other idealistic crap. I went to college for one specific purpose. It was a means to an end. I wanted a family. I wanted my Wife to be able to stay home with our children. I wanted a nice home, and good cars to drive, and I didn't want to break my back and body to accomplish it all. The decisions I made during my time in college helped me achieve all those things. I've went on this rant about college, because so many young people waste so much precious time, and huge sums of money (often accumulating massive debt) earning a degree that in some cases may not be worth the paper it's printed on. I think if I were in your shoes, then I would not worry about investing right now. Go to a bank. Open up a checking account and a money market account. Use the checking account for your expenses, and transfer any extra funds over to the money market. Also, sign up for a credit card. Pick something simple and useful like the Amazon Visa. This will help you start building credit. Save as much as you can during the summers. It's difficult to invest at this stage of your life, because a lot will change for you over the next few years. If you haven't already, then you're probably going leave home, then maybe meet a girl, get married, need to buy a house, etc, and all these things take money. If your cash is tied up in IRA's, then it's difficult to access quickly and without penalty. Wait till later in your twenties when things should start to settle down, then meet with a financial advisor and have at it. Again, just my $0.02. Good luck, and study hard!

 

The best thing at your age is to get with a financial planner. The last thing you want to do is trying to make money in the stock market on your own. Stock picking, trying to time the market to pick stocks or buying stocks based on track records is gambling. You would be better off taking your money to a casino and gambling there. You want to build a portfolio based on the amount of risk you are willing to take, be diversified and re balance your portfolio as the world dictates. I see your are from Memphis, I'm from Pittsburgh, Pa. but work with a financial planner in Jackson Tenn. my daughter lives in Jackson so I am down here a lot. When I am back home and I need to talk to him I use Skype. If you are interested in his name let me know and I can pass on the information and you can make up your own mind. Not sure how far you are from Jackson, because he holds classes that you could sit in to gather more info.

 

Ended up going with Robinhood as a way to start with stocks, Great phone application, would highly recommend it to anyone, free trading is probably the best perk. Worst draw down is not having web access or computer software to utilize to trade. Would highly recommend to anyone else looking to invest to start with Seeking Alpha if you believe stocks are what you want to do. Decided to go away from the retirement account starting now, didn't have the income this summer that I had last summer, so I felt my best utilization was for the near term growth. Did a lot of research and took me about 1 year of research and reading, then 6 months of portfolio backtesting and risk aversion. But after all of that I have had an account for about 4 months now, nothing to call myself a professional, but great asset allocation that i know I can sleep easy at night and have huge upside with limited risk.

 

Also had started at first when I first opened my account with a lot of ETF's and while they are great for those who feel they need to diversify or just pick a total market etf, just understand your risk with this because just like Japan has experienced, the stock market doesn't always have to go up, just because it has in the past.

 

Your best returns will be trading crypto currencies. BTC went from around $300 to nearly $3000/btc in about 5 years time.

 

Have a hard time with the crypto currencies, the volatility is horrendous and a 50% drop in value in less than 2 months is enough to make anyone thing twice about investing in a non-regulated market.

 

I would highly recommend not going long on stocks right now. They are very overvalued. Daytrade is fine, but buying and holding is no bueno when the market keeps making record highs pretty much every day.

 

So with stocks its ok to only hold onto an investment for one month to another?

 

It depends on your philosophy. Conservative folks believe in buy and hold. There is also a school of thought that says your portfolio should be a large number of stocks--fifty or more. Otherwise, mutual funds are a good way to go. My personal experience has been with mutual funds. I retired early 15+ years go, rather comfortably. I avoided currency and precious metals--I figured that is speculation (gambling), not investing.

 

Vanguard Index funds...lowest cost. If you do research very few stock pickers beat the market over the long term. Even Warren Buffett has touted low cost Vanguard Index Funds. Look it up.

 

See, this is why I love TacomaWorld; it's not JUST about Tacomas.

I was just talking to a friend last night about Acorns! It's an awesome app! I don't have to think about it, and it takes such a little amount out of my bank account that I really don't notice it very often. Even after a few months time, the account can grow really big! I seriously recommend it to anyone.

And, of course I highly recommend people become financially educated.

 

Well that's all fine and yes, you will make money.

Invest in coke. That's all I am going to say now.

 

A somewhat new trend that's easy to get into and out of are robo advisors. Services such as Wealthfront and Betterment are examples of these. When you create an account they ask you questions to determine what they believe is your risk tolerance, which determines what types of instruments into which they'll invest your money. With Wealthfront (and I would imagine the others) you can raise or lower their risk assessment if you don't agree with it.

Last February I opened a Wealthfront account. Even though I have a low risk score, it's doing substantially better than my actively managed brokerage account and for a lot less in commissions. Look around on Mint, or a financial advisory website, and you can get up to $15,000 managed for free at one of these services.

 

...like, the soft drink company, or the "fun-time-in-a-bag" the guy in the back alley has???

 

Neither, like in the international distribution business side of it. Hope that helps clear things up.

 

I personally disagree. Stocks were in essence flat between December 2014 and mid 2016. That serves as a correction. I think we won't ever see "high" interest rates again. With lower future interest rates P/E multiples should be higher. Either way though I'm on a 40 year horizon. I buy when it's up, buy when it's down, and buy when it's sideways.

 

VERY few people beat the market. Like you have to be in absolute genius territory. Active management is a bad deal. You are much better off in a low expense self managed portfolio that just tracks the market. Secondly, I don't know how old you are, but if you are younger than 50 you may want to rethink your risk appetite. I understand that the recession is still fresh in everyone's mind, and it probably will be for life honestly, but low risk tends to only work well for retirees.