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Ask HN: What kind of personal financial investment do you do?

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Re: Ask HN: What kind of personal financial investment do you do?

#51

Post by sachinag »

patio11 wrote: post #37

A Roth IRA, maxed every year, is my main form of "real" investment. I try to put about 75% into index funds and 25% into handpicked stocks, which are my concession to desire to gamble. 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 becaus…

You should absolutely max your Roth first every year, as you can use the account for a first home purchase and qualified education expenses in addition to retirement. (We'll have a lot of this sort of stuff on Blueleaf as we get closer to launch. If there are specific questions, we can write answers/articles for them.)

Re: Ask HN: What kind of personal financial investment do you do?

#52

Post by spinlock »

I have an IRA, Roth IRA, private account, and a large investment in my business. I just hired a portfolio manager to handle the private account this summer. That has been great because it is now invested in individual equities (which is great for tax purposes) except for an emerging markets ETF. The IRA and Roth IRA are managed individually by me and I've decided to put them into an S&P index fund and forget it. I'd actually like to manage the 3 accounts in tandem to avoid paying taxes. The idea would be to load up the non-taxable accounts with the higher risk/return investments - which should outperform over time - so that I'm selling them without taking a tax penalty when it comes time to rebalance. The problem is, my portfolio manager won't touch them because they don't meet his minimum.

Re: Ask HN: What kind of personal financial investment do you do?

#53

Post by jalada »

pragmatic wrote: post #44

1. Get an decent amount in _cash_ savings ($10K) 2. Payoff all debts (including house and student loans) 3. Only invest in stock market through IRA's where there is a tax advantage. 3.1 Only invest in company 401(k) to get the match. 3.2 Invest the max in Roths (if you qualify) 3.3 Find an index fund and forget it. You've got better things to do then worry about stock picking. (I suggest Vanguard, it's investor owned…

I know your comment was all in dollars and this is probably generally an American topic. But regarding number 2, in England a student loan is the lowest interest loan you will likely ever get, so it's naive to pay it off in bulk; you might need to take out a real loan one day so keep the money, and even in today's climate you can probably put that money to good use.

Re: Ask HN: What kind of personal financial investment do you do?

#54

Post by arthurdent »

bradshaw1965 wrote: post #45
patio11 wrote: post #37

A Roth IRA, maxed every year, is my main form of "real" investment. I try to put about 75% into index funds and 25% into handpicked stocks, which are my concession to desire to gamble. 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 becaus…

...I don't buy bonds A lot of people would argue that even for a young person a portfolio with a small bond allocation is actually less risky with higher returns then a 100% allocation to stocks.

1. a lot of people argue for things without backing it up.

2. it depends what you mean by "risk". arguments claiming bond allocation in your portfolio are less "risky" describe risk as "volatility of returns", which in finance are measured over shorter intervals than 40 years.

patrick is specifically accepting short term volatility in return for the higher EV of returns.

the marketplace prices debt instruments (especially US treasury issued) over the long term with cheaper expectations for returns specifically because it has lower variance of returns.

Re: Ask HN: What kind of personal financial investment do you do?

#57

Post by arthurdent »

dan_sim wrote: post #31

I'm building a company and investing in it. 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?

yep. i like betting on myself better than betting on most other people.

its sort of an "all your eggs in one basket" strategy, but if you're going to put all your eggs in any particular basket and you're good at what you do, you're as good a bet as any (and you can make sure your investment manager isn't slacking)

Re: Ask HN: What kind of personal financial investment do you do?

#58

Post by spinlock »

rorrr wrote: post #24

* 401k (from an old job) and an IRA (maxed out). I also trade for my wife's IRA. * I have a Zecco trading account (it used to be nice, cheap trades) * I pick individual stocks only, doing my own research. Mutual funds and ETFs are OK for long term investment. I've looked at at stock recommendation sites like covestor.com, kaching.com and collective2.com, and they do have some amazing traders, so you can just mirror t…

>they do have some amazing traders, so you can just mirror them (I'm kind of hesitant to do that, not sure why).

I'd be hesitant to do that because even a broken clock is right twice a day. I haven't looked at covestor in a while but, IIRC, you couldn't see what the other guy was invested in until you committed capital. If I can't see his investments or perform other due diligence, I have no idea what kind of risks he's taking to generate those returns. I'm much happier with my portfolio - which is designed to track the MSCI World Index and reduce risk - than I would be with some crazy trader gambling with my money. I beat the MSCI by 3 points last year which is an acceptable return and I sleep like a baby :)

Re: Ask HN: What kind of personal financial investment do you do?

#59

Post by encoderer »

jalada wrote: post #53
pragmatic wrote: post #44

1. Get an decent amount in _cash_ savings ($10K) 2. Payoff all debts (including house and student loans) 3. Only invest in stock market through IRA's where there is a tax advantage. 3.1 Only invest in company 401(k) to get the match. 3.2 Invest the max in Roths (if you qualify) 3.3 Find an index fund and forget it. You've got better things to do then worry about stock picking. (I suggest Vanguard, it's investor owned…

I know your comment was all in dollars and this is probably generally an American topic. But regarding number 2, in England a student loan is the lowest interest loan you will likely ever get, so it's naive to pay it off in bulk; you might need to take out a real loan one day so keep the money, and even in today's climate you can probably put that money to good use.

That goes likewise for his "pay off your mortgage" advice. If your note is 4.5% and here in the US mortgage interest is tax deductable making your nominal interest rate even lower.

So the calculation becomes... paying off that mortgage is like getting a guaranteed 4% return on your money. But there are many low-risk vehicles that can eclipse that.

It's possible that you'd want to take that guaranteed 4%, but it's not the type of thing that, IMO, is just a given.

Re: Ask HN: What kind of personal financial investment do you do?

#60

Post by akg_67 »

I do and have all the things you listed

* 401k maxed out to IRS limit every year primarily for tax benefit and retirement saving. Don't qualify for Roth and IRA.

* Two non-retirement investment accounts. Our expenses are lot less than income so all savings go to one investment account.

* One investment account has managed and index mutual funds and ETFs. Another smallish one is a 'play' account primarily with individual stocks, typically use quantitative trading strategies and macroeconomic trends.

* A saving account with emergency funds (six months net pay)

* No debt other than a smallish mortgage.

* We drive 10 year old cars. May buy a new one in late 2011.

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