31–40 of 172 posts
I may be crazy but I rather invest in myself that in a company I have no control over. When the time will come, I'll sell it and get most of my money out of it. Maybe reinvesting in another and make more out of a better initial investment.
I already created thousands of dollars from an initial 500$ investment and time.
Does someone else here thinks like that?
Step 1 was digging myself out of the hole, which didn't take too long -- paid off the cars and the CC debt.
I use EmigrantDirect for a Savings Account, they pay 0.9% on balances currently, generally they are very competitive. Transfer are easy.
I use an EmigrantDirect Mastercard for all my purchases. If you maintain a greater than $10,000 balance in your savings you get a 1.4% cash back on all purchases. Doing this is a nice way to handle things, all your bills are consolidated, and you get cash back. Of course pay it off in full each month, treat it like a charge card, not a CC.
I do not currently get a match on my 401K, and I do not like the investment options much, therefore I do not use it -- I instead max out a Roth IRA, and put money into a taxable account.
I tried very hard during the downturn to push as much money as I possibly could into stocks, ignoring whatever fear I felt. As things have rebounded I am sitting on a portfolio with very nice paper returns. I favor companies with high ROE and what appear to be sustainable cash flows. I favor international exposure. And I like dividends.
I am however finding it difficult to find that much to invest in currently, my money has been going into cash for some time.
I'm not really sure what comes next...I still consider houses overpriced relative to rents, tho depending on what inflation may do, it might make sense to purchase one. Still pondering that one.
Although, I haven't gotten around to implementing it, I think there could be a powerful concept, which I'll personal hedging. The idea is to think of your investment as a hedge against the costs of things you want to buy in the future. So, suppose you are investing to retire. 1) Track your expenses 2) Figure out what your expenses will be when you retire. 3) Buy proportional share of the value chain for all the companies you will buy stuff from. Presumably, you want it waited to cover all your expenses. Now, this can get tricky because you may spend a lot of money with companies that aren't public, and some industries may be in a bubble. Further, you will have to shift your investments to reflect industry shakeups. For example, if you change your mind about what products you like, you would also change your portfolio. Industry changes would also affect, who in the value chain gets the profits, and conglomerates or weird capital structures can make this a bit tricky, but I think it is a powerful concept.
Individual stocks, although I'm thinking of switching to just index funds (e.g. if dow jones index go up I earn money.) since constantly researching on companies become quite time consuming.
Also, you'd probably want to go with a more broad-based index than DJIA or S&P500. Many fund companies have a "total stock market" funds where they attempt to literally buy a piece of every US stock, weighted by market cap, so you'd effectively be owning "the US stock market", rather than just large companies. There are also total international funds which do the same thing for all non-US stocks.
Also also, you should include bonds if you aren't already. Like with stocks, there are total bond market index funds for this.
In fact, if you just picked an allocation across "total stock", "total international" and "total bond" you'd pretty much be set. This is what Vanguard does for their target retirement funds: https://personal.vanguard.com/us/funds/vanguard/TargetRetire...
I own a lot of physical gold and I bet a lot on sports. On reflection, that's not as "normal" an investment strategy as I was thinking.
I don't buy bonds or CDs -- I'm young enough that short-term loss is a non-event, since nothing short of "my children are starving on the street" will induce me to touch the Roth ahead of schedule. Wild volatility doesn't matter because I only check the account about once a year anyhow -- the only concern is maximizing expected 40-ish year returns.
I generally try to keep a few thousand in cash to cover unexpected expenses, although my discipline with that has left something to be desired as of late. (I'll say this for being a salaryman: I never had to deal with wild swings in my paycheck, and haven't quite mastered the trick of doing so yet.)
I mostly invest in the s&p500 ETF (IVV) and high dividend yielding stocks. I also have AAPL and GOOG from long ago that I'm still invested in. Unfortunately I didn't buy very many shares of those. I have other individual stocks. I'm not a trader, I hold onto those stocks for a while.
I have a 30year mortgage for my house. I'm not in a big hurry to pay it off, even though we pre-pay a little. I rather use the money to put it into my savings or investment accounts.
A good person to read up on is Vanguard's founder John Bogle. He's the champion of low-cost/low-fee index funds. I'm pulling this straight from his wikipedia page: "Bogle argues for an approach to investing defined by simplicity and common sense. Below are his eight basic rules for investors: - Select low-cost index funds - Consider carefully the added costs of advice - Do not overrate past fund performance - Use pas…
Could you explain "Don’t own too many funds"? Is that just because of fixed per-fund costs?
Additionally, if you're at a fund company with different share classes based on balance, you also get higher expenses by dividing things up too much. Eg Vanguard's Admiral shares reward you with a lower expense ratio for having more money in a given fund, since it lowers their own overhead.