Thanks for the links Dax and js, this’ll give me something to chew on (proverbially speaking).
Thanks for all the input guys.
There is only one certain way. Go to the Stock Exchange. Kill someone.
Mild emphasis:
Yearly investing in noload mutual IRAs is as certain a path to wealth as you can find. It’s not a path to Kennedy-style wealth. That takes a focus I don’t have. I envy people with that talent, but I’ll never ride that train.
I want a comfortable retirement, where I can travel a bit, play with the grandkids, kick back and not worry about money. That takes about a million bucks. Two million is better. If you put the max in IRAs for 30 years, you’ll get there.
If you’re not approaching 50, you have to kiss off social security. You’ve gotta do the IRA thing. Poverty sucks.
jsleek I agree with the gist of what you have to say. However, I would argue that you need 1-2 Million dollars of today’s money. I’m 28. By the time I retire, I doubt that would be enough to buy much what with inflation and all that.
Yeah, inflation is drag. I’ve taken some big hits. The crash of the last couple of years set me back a bit. Then the recovery of the last few months helped until the dip of a month ago.
It goes up and down. Always before it went up a little more than it went down. You have to wait it out and hope it will keep going up more than it goes down.
How I wish I’d bought Microsoft back then. Instead I bought IBM. And when I decided to get out of the market after 9/11, I discovered I’d come out fine because I had bought it years before. (spcifically, I sold for 139 what I bought for 25).
It’s not like a genius. I’m a bus driver, in fact. But I’m on track to retire in a few years, retire to Sussex and raise bees. And I’ll have Social Security.
Young guys won’t get Social Security. It can’t happen. You guys have to stash away in IRAs. Peruse Vanguard.com and others like it. You have some time. You can make that time work for you.
Remember, it’s no-load mutual IRAs to start. After that it’s less obvious.
Duckster mentioned dollar cost averaging, but didn’t say what it was.
Suppose you have $1000 to invest. You put $100 in. Wait a while. You do it again. You keep doing it, up or down, rain or shine. The idea is that the market is going to vary. Sometimes you hit it right and sometimes wrong, but if you keep doing it, eventually you come out.
He’s saying the same thing I’ve been saying, but in a more compact way.
I’m currently reading a book entitled “How the stock market really works” (check up Amazon - should be there).
Combined to this I now have a few starting ideas.
Time to implement them.
My philosophy is “You can’t beat the pros.” Not only have they studied for years, they spend all day, every day, thinking about stocks. THEY are the ones who have a hope of making a killing, and most of them don’t. If you manage to make a killing micromanaging your portfolio, it’s luck.
Put your money in a solid set of mutual funds. Vanguard is great because their fees are so low. You get the benefits of diversification, without having to be rich.
If you want to play Junior Stock Broker, feel free to take part of your holdings and trade them. If you do well, that’s great, if you do poorly, at least it’s only part of your money.
You think so, huh? Most “financial advisors” spend all day on the phone cold-calling. They make a killing by you buying stocks, not by predicting the market. The reason that institutional investors can make a lot of money is because they are dealing with amounts large enough and diverse enough that they can mitigate some of the risk.
A friend of mine who is a trader put it this way - “people ask me about the market all the time because I work on Wall Street. If I know what the market was going to do, do you think I would drag my ass to work every day or sit at home buying and selling stocks?”
WHat js_africanus has touched upon is that you can’t predict the future of the market or of individual stocks by analyzing the past.
Real estate is probably one of the best investments you can make (ie buy a house, don’t rent. It’s a tangible asset, it always seems to appreciate and worst comes to worst you can always live in it.
Too true, msmith, your average broker needs churn to make money, and has to sell sell sell. I’m thinking more of the market as a whole. There are plenty of people out there using tools and skills that most of us don’t have analyzing stock looking for the diamond nobody else has seen. All of the public data available on any given company is likely already incorporated into the price of the stock.
I imagine that big institutional investors, mutual fund managers and the like are on the lookout for good deals, and have resources far more vast than a guy reading some charts while watching Wheel of Fortune. If there is a deal to be had, they will find it before you or I. They are also the guys on the leading edge when an earnings report or news flash is particularly good or bad. I think we agree that there is little good reason for an average Joe to try and knock himself out analyzing stock.
Real Estate is definitely a good deal. With the apartment I’m currently selling I’m making a 60% return on my investment over 3 years, and I had a place to live at a rate below market rents.
I disagree. Yes, your typical $500,000,000 - $1,000,000,000 manager has some more resources available to him than you or I, there’s no reason for the little guy not to get involved. If Soros spots a great deal and he buys, the price will go up. If I also recognize the value of the stock, I will buy it too. Depending on where you get in, the price will rise as Soros is buying several orders of magnitude more than I am. The price goes up for us both. Hell, even if Soros doesn’t buy, but myself and a thousand other little guys buy the stock, the price will go up.
You’re going to need the proper tools, and knowledge, to make a killing on the stock market. I recommend ‘The Motley Fool’ online. Great free tools and advice.
However, the number one thing you need to make money on the stock market is money. Lots of money. If you have lots of money, you can make lots more money on the stock market.
Turn back the clock 25 years and lay it all on WMT:
Sure, you might choose the same stock as a brilliant stock picker, and I might be able to pick the winner of a horse race. Thing is, guys like Soros know what to look for, they have vast experience and knowledge about the market, business in general, and what makes stocks valuable. You don’t. If you pick the same stock as him, that’s luck, not skill.
What criteria do you think you would use to choose the stock? I highly doubt it’s the same criteria that Soros would use. Similarly, if I choose my winning horse because I liked the name, does that mean I could be as successful as a guy who really knows horses? Pick one stock, you may win, but over the long haul, you will pick more dogs than an expert, and likely won’t do any better than the market.
Can you pick a winning stock? Yes. Can you pick winning stocks reliably enough that it should be your investment strategy? No.