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Ask HN: Getting Started Investing

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Re: Ask HN: Getting Started Investing

#91

Post by icedchai »

marketgod wrote: post #90
o-__-o wrote: post #53

Earlier quoted context omitted.

At all time highs? sure investing today will guarantee a return in 15-30 years.. but there are smarter ways to diversify your gains (and losses) USG bonds may be a worthwhile investment over the near term. Invest less in equities right now so you can average down further and faster as the market cools. Or invest outside of the market (there is crowd funding for small businesses like nextseed)

The market is trending will right now we are looking at higher highs. My system suggests it and has been right when everyone was running away from the market in 14/16/18. You should read the worlds worst market timer [1]. For most people the best way is to just put all their money in stocks. Obviously not just SPY, maybe a world index, SPY and bonds. This way you can sell the bonds if the market drops and use that fo…

Whenever the market drops, I put more in. October - December, 2018 was tough, but I invested more. And it paid off. I had months where I've lost, then gained, more than I take home in a year. 2008 - 2009 was bad, but I put more in then, too. The reality is that the "great recession" created the foundation upon which I built a small fortune.

Re: Ask HN: Getting Started Investing

#93

Post by AlchemistCamp »

icedchai wrote: post #88
AlchemistCamp wrote: post #75

Earlier quoted context omitted.

I'm aware of "buy-and-hold index fund investing". I believe it was a good strategy because it was an an unpopular, undervalued asset class 100 years ago and has since become very popular and overvalued. Another important consideration is that companies now go public much later than they did pre-Sarbox. The sad truth is that a company's biggest gains are generally behind them by the time retail investors are allowed i…

100 years ago? Index funds aren't that old.

Stocks are.

A common pitch used to sell people on index funds involves bragging about annualized returns of stocks going back even longer than that, and comparing them decade by decade against other asset classes such as real-estate and bonds. The implicit pitch is, "Look at this upward historical trend of stock valuations. If you invest in a fund that indexes them, you too will see these kinds of returns".

Your point is good, though. Index funds never return quite as much as the underlying assets do since there are management fees. Over time, those fees compound.

Re: Ask HN: Getting Started Investing

#94

Post by icedchai »

AlchemistCamp wrote: post #93
icedchai wrote: post #88

Earlier quoted context omitted.

100 years ago? Index funds aren't that old.

Stocks are. A common pitch used to sell people on index funds involves bragging about annualized returns of stocks going back even longer than that, and comparing them decade by decade against other asset classes such as real-estate and bonds. The implicit pitch is, "Look at this upward historical trend of stock valuations. If you invest in a fund that indexes them, you too will see these kinds of returns". Your poin…

You will see those returns if you're invested long enough. Take a look at any 30+ year chart. Yes, there are periods of little-to-no return (2000-2011...)

Re: Ask HN: Getting Started Investing

#95

Post by o-__-o »

charlesdm wrote: post #69
o-__-o wrote: post #57

Earlier quoted context omitted.

Again way too many barriers to entry. I just need $100k to prove my idea. These funds have billions. They won’t lend 100k because it has a prototype app, a handful of interest, but no investor pitch? But they will give $1m to someone who can pitch a dream with no product? Please come to me with $100k and I’ll offer you simply a guaranteed 0% return (no loss on investment) so I can pad my bank account and make “real”…

Lol dude, "just" $100k. Barriers to entry? Totally honest: I'm an investor and I wouldn't invest $100k in you with a mentality like that. We're all in this to make money. What you need is to prove your idea. No one is going to put $100k (or $100 million for that matter) in an untested idea, unless you have a relationship with an investor. And investing is a relationship business. If a friend whom I trust and I know i…

I have ideas, i have executed on them and I’m up 500k in pure profit. But investors like you are hard to find. But investors wanting to pay $5m to start a mechanics for Uber app when there are several in the market? Everywhere.

So my options are simply do something I don’t want to do to get investors (read: become an employee again), get an SBA Loan at 9%, bank loan at 6% or remortgage my house at 2%. I shouldn’t risk homelessness for cheap money and neither should investors buy let’s get real — $100k is a monthly rounding error for them

Re: Ask HN: Getting Started Investing

#96

Post by o-__-o »

darkteflon wrote: post #70
o-__-o wrote: post #56

Earlier quoted context omitted.

Very weird time we are in right now. US Markets at all time high, stronk us economy, faltering global outlook, plus tariffs. Market may go to the moon, or it may collapse. That ratio needs to be tweaked at least monthly maybe bimonthly through the rest of this year (lots of uncertainty coming up)

The times are always weird. You’ll be perpetually waiting if you’re waiting for stuff to get “normal”. Absorbing the essential truth of this is part of the zen of indexing. Nobody knows what outcome you’ll get, but indexing is a solid process. That’s all you can do - maximise the quality of your process. Anything else is noise.

We’re at all time highs, is the market going up or down? You have an increased risk here because the wrong decision can be decimating (short the market and it continues to rally, or buy the market and we’ve hit the top). Nope I would wait for a confirmation signal and act on that. Even long term investing, you should have an edge never invest and withdraw blindly.

Re: Ask HN: Getting Started Investing

#97

Post by o-__-o »

badfrog wrote: post #67
o-__-o wrote: post #54

Earlier quoted context omitted.

Put money in Uber. Hedge with money in Lyft. Uber goes hockey stick, you’re golden. Lyft goes parabolic while Uber is still trying and now losing? Hedge. Taxi industry may fail entirely? Sell puts on car max because market will soon be flooded with depreciating assets (cars) from drivers who no longer taxi. Hedge. Hedging is not an inverse, it is protection on your original investment. A lot of the times this is simp…

> Taxi industry may fail entirely? Sell puts on car max because market will soon be flooded with depreciating assets Why would you do that? When you sell puts, your upside is limited to the premium and the downside is close to unlimited (the full value of all the shares at strike price). Whereas if you were to buy calls, your downside is limited and upside is unbounded. And FWIW, speaking in layman's terms, I would c…

I don’t follow, are you saying two longs could be a hedge? Because you are corrext

Re: Ask HN: Getting Started Investing

#98

Post by o-__-o »

icedchai wrote: post #91
marketgod wrote: post #90

Earlier quoted context omitted.

The market is trending will right now we are looking at higher highs. My system suggests it and has been right when everyone was running away from the market in 14/16/18. You should read the worlds worst market timer [1]. For most people the best way is to just put all their money in stocks. Obviously not just SPY, maybe a world index, SPY and bonds. This way you can sell the bonds if the market drops and use that fo…

Whenever the market drops, I put more in. October - December, 2018 was tough, but I invested more. And it paid off. I had months where I've lost, then gained, more than I take home in a year. 2008 - 2009 was bad, but I put more in then, too. The reality is that the "great recession" created the foundation upon which I built a small fortune.

The Great Recession was an epic transfer of wealth that we will not witness again in our lifetime

Re: Ask HN: Getting Started Investing

#99

Post by darkteflon »

o-__-o wrote: post #96
darkteflon wrote: post #70

Earlier quoted context omitted.

The times are always weird. You’ll be perpetually waiting if you’re waiting for stuff to get “normal”. Absorbing the essential truth of this is part of the zen of indexing. Nobody knows what outcome you’ll get, but indexing is a solid process. That’s all you can do - maximise the quality of your process. Anything else is noise.

We’re at all time highs, is the market going up or down? You have an increased risk here because the wrong decision can be decimating (short the market and it continues to rally, or buy the market and we’ve hit the top). Nope I would wait for a confirmation signal and act on that. Even long term investing, you should have an edge never invest and withdraw blindly.

Unless you are a PhD in finance working at one of a handful of the world’s top money managers, I guarantee that what you confidently refer to as your “edge” is gonna end up poking you in the eye. Age and experience will teach you that if you let it.

Re: Ask HN: Getting Started Investing

#100

Post by o-__-o »

darkteflon wrote: post #99
o-__-o wrote: post #96

Earlier quoted context omitted.

We’re at all time highs, is the market going up or down? You have an increased risk here because the wrong decision can be decimating (short the market and it continues to rally, or buy the market and we’ve hit the top). Nope I would wait for a confirmation signal and act on that. Even long term investing, you should have an edge never invest and withdraw blindly.

Unless you are a PhD in finance working at one of a handful of the world’s top money managers, I guarantee that what you confidently refer to as your “edge” is gonna end up poking you in the eye. Age and experience will teach you that if you let it.

Or maybe age and experience has seen this before and went balls deep in ITM calls after the market washed out 100+ points. I mean if you reread what I said, it’s spot on to what happened over the last few days

But keep thinking a paper giving you a title with some mixed case letters makes you a top money manager and that no one could have possibly avoided a 40% loss during 2008

Also an edge can simply be moving averages which has a proven backtest but there are a lot more analytical tools that exist today

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