Trying to be an informed, savvy investor is giving me a headache

Mundane Pointless Stuff I Must Share (MPSIMS)
#1

I’ve inherited a little money, not enough to get excited about but enough to want to be careful about where to stash it. I’m trying to be wise and conservative in dealing with it, and am reading as much online material as possible to educate myself. This includes day-to-day market analysis and economic forecasts.

These pundits are going to drive me insane. Every time the market tweaks a little one way or the other, someone is forecasting doom and destruction or frothing-at-the-mouth prosperity. Then they recant and go hallooing off in another direction with the next edition. Even if some economic writer is honest about his or her inability to time the market, they can write several long-winded paragraphs which realistically boil down to “Huh. Dunno.”

So, so far I’ve just diversified up my investing among CDs, savings and conservative index funds. I did buy a few stocks, but I’m too chicken to risk much at that.

Where’s the Advil?

#2

A smart man once said, “It’s time, not timing.” Pick a good stock and hold it. Keep an eye out to see if there are particular danger signs, but otherwise don’t move your money around hoping to get a better return.

Most pundits aren’t following their own advice, anyway.

#3

If you try to follow investments on a day-to-day basis, you’ll go crazy. Buy something you believe in, and don’t check prices every day. Relax and give it time.

And besides: you’re teela brown! Just buy something and it’ll go up. Guaranteed :smiley:

#4

Great job. You’re done. Go enjoy your life, and ignore the pundits and the market predictions and the idiots on TV. If those people knew what the markets were going to do, the last thing they’d do is tell a bunch of other people about it.

Take some time to read some basic investing stuff, and check back in a year to see how you’re doing.

#5

Don’t listen to the pundits. Read The Intelligent Investor by Benjamin Graham. The pundits can’t agree on much except that Graham is one of the godfathers of investing wisely. Then put your money in a broad index fund.

#6

Agreed, pick a ratio that you think is the right risk reward balance for you (40% stocks, 40% bonds, 20% CDs, whatever it is) and put your money there. Sounds like you did that.

Every so often (no more often than twice a year, no less often than every two years) on a schedule (like July and December), rebalance your portfolio. If you now have 50% in stocks and 30% in bonds, sell the stocks (you are selling high) and buy the bonds (you are buying low).

If you want to take some hobby money and play the stock market, it can be fun. I collect stock like some women collect shoes. But I put money there in individual stocks that would otherwise be spent on shoes (or going out for drinks, or that cute jacket I don’t really need, or a new DVD at Target).

#7

You sound like me. My women friends wonder why I don’t wear a diamond wedding ring or get my nails done or go to first-run movies. I try to explain that I’d rather put $5G in a high-interest CD rather than jewelry, or that contemplating the accumulation of dividends gives me more satisfaction than contemplating the accumulation of a closetful of shoes. They don’t get it, and I don’t want to portray myself as some sort of miser-ess, so I keep quiet.

Yes, I do have a handful of stocks, but their volatility scares me. ETFs are a nice compromise; they combine the versatility of stocks and the risk-spreading of a fund.