If you had a moderate sum of money to invest in the current climate, what would you do with it? Stocks? Mutual funds? ETFs? Real estate? Something else?
Ask HN: What are some good ways to invest?
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Re: Ask HN: What are some good ways to invest?
#2Depends on your situation. This is essential first reading imo: https://en.wikipedia.org/wiki/The_Intelligent_Investor
If you still had questions and more money than the average bear, find a financial professional.
Re: Ask HN: What are some good ways to invest?
#3Depending on your time horizon, I recommend 3 pots:
1) Need in the next 1-2 years - Money market account
2) 3-7 years - value funds (either ETF or Mutual funds)
3) 7+ - growth funds (either ETF or Mutual funds)
Individual stocks take effort to watch. Make sure you do not buy just before a dividend (you will pay tax on the money they give back to you). Watch for bad news, so you can pull your money before they go bankrupt.
ETF are lightly managed, your money grows as that segment grows. Which is not a bad idea.
Mutual funds - someone is actively watching it. Which can hopefully mean it avoids a bad turn, but it can burn money being churned.
Safest bet is an EFT that tracks the S&P 500
I expect Real Estate funds to take a gut punch when things open up and the businesses fold and they have no rent coming in. So I plan to put money there, after it falls.
Re: Ask HN: What are some good ways to invest?
#4Depending on your time horizon, I recommend 3 pots: 1) Need in the next 1-2 years - Money market account 2) 3-7 years - value funds (either ETF or Mutual funds) 3) 7+ - growth funds (either ETF or Mutual funds) Individual stocks take effort to watch. Make sure you do not buy just before a dividend (you will pay tax on the money they give back to you). Watch for bad news, so you can pull your money before they go bank…
Thanks for your comments--I'm curious about real estate funds and have been looking into REITs, but your point about what happens when things open up is a good one. I've been looking at Fundrise and similar services but I have such a knowledge gap about real estate that I'm not sure I could make smart decisions on individual funds. I'm willing to tolerate some risk, but need to get smart on the involved issues first.
Re: Ask HN: What are some good ways to invest?
#5Depends on your situation. This is essential first reading imo: https://en.wikipedia.org/wiki/The_Intelligent_Investor If you still had questions and more money than the average bear, find a financial professional.
Thanks! I've officially added it to my reading list, along with Rich Dad Poor Dad and The Richest Man in Babylon. I wish I had done more to become financially literate earlier on--I don't think anyone ever talked to me in school about financial literacy and now I'm in catch up mode.
Re: Ask HN: What are some good ways to invest?
#6Bogleheads has a lot of advice about investing in a low cost, relatively low risk, relatively simple way:
https://www.bogleheads.org/wiki/Getting_started
If you sign up for the Bogleheads forum & follow the template to describe your financial situation you will likely get some reasonably good feedback & ideas.
Re: Ask HN: What are some good ways to invest?
#7The most important rule is: buy low, sell high. If you don't do that you just spending money.
In order to accomplish that rule you have to generally do the opposite of what is popular, but in a meaningful way.
When the market began crashing I sold shares from my healthy mutual funds and bought a lot of stocks in airlines and cruises. People aren't going to stop flying. Eventually those markets will recover and I recently bought shares at about 25-33% of their recent value. Now I just have to wait out the pandemic and for business to return to normal.
Re: Ask HN: What are some good ways to invest?
#8The most important rule is: buy low, sell high . If you don't do that you just spending money. In order to accomplish that rule you have to generally do the opposite of what is popular, but in a meaningful way. When the market began crashing I sold shares from my healthy mutual funds and bought a lot of stocks in airlines and cruises. People aren't going to stop flying. Eventually those markets will recover and I rec…
Are you concerned that the airlines might end up declaring bankruptcy? Or do you think the government will bail them out? As of right now, it's my understanding that they're operating at unsustainable losses, absent some kind of intervention.
Re: Ask HN: What are some good ways to invest?
#9The most important rule is: buy low, sell high . If you don't do that you just spending money. In order to accomplish that rule you have to generally do the opposite of what is popular, but in a meaningful way. When the market began crashing I sold shares from my healthy mutual funds and bought a lot of stocks in airlines and cruises. People aren't going to stop flying. Eventually those markets will recover and I rec…
Are you concerned that the airlines might end up declaring bankruptcy? Or do you think the government will bail them out? As of right now, it's my understanding that they're operating at unsustainable losses, absent some kind of intervention.
It's lottery, not math. So even if the parent answers this or that a diversified portfolio, might save some skin but no one really knows what's going to happen - and if someone does, it's most likely illegal.
Re: Ask HN: What are some good ways to invest?
#10The most important rule is: buy low, sell high . If you don't do that you just spending money. In order to accomplish that rule you have to generally do the opposite of what is popular, but in a meaningful way. When the market began crashing I sold shares from my healthy mutual funds and bought a lot of stocks in airlines and cruises. People aren't going to stop flying. Eventually those markets will recover and I rec…
Are you concerned that the airlines might end up declaring bankruptcy? Or do you think the government will bail them out? As of right now, it's my understanding that they're operating at unsustainable losses, absent some kind of intervention.
The cruise industry has it even worse. I am betting that at some point in the future business will resume and people will travel. There will still be airlines and its less disruptive to keep the current players in operation than to float new ones over the corpses of these giants. It takes an astonishing level of liquid capital to spin up an airline that is more than merely a regional player.