Beginner Investment Help

[Muzzle of Bees]

Using a service like Betterment or Wealthfront makes investing in the stock market trivially easy. They handle all the investment choices and they let you invest as much or as little as you want as they support buying fractional shares of individual funds. Their fees are very low and they don't charge commissions for regular account deposits (or withdrawals).

None of the investment firms make it particularly hard to take your money. Fees aside, it is the game that is swayed towards the huge players. People like us make very marginal gains at best. Just when you think you can retire the unpredictability of the market gets you.

 

[AKmoney]

None of the investment firms make it particularly hard to take your money. Fees aside, it is the game that is swayed towards the huge players. People like us make very marginal gains at best. Just when you think you can retire the unpredictability of the market gets you.

I agree, the system is rigged against the little guy. None of us are going to get the inside deals like Gordon Gecko but that doesn't mean we can't enjoy nice gains in the market. The unpredictability of the market is why we need to play the long game. Regular contributions over the course of years (if not decades) is what builds wealth. Avoid individual stocks and buy stuff that's diversified.

 

[JayceeP]

For those saying the market is rigged: have you ever looked at an Andex Chart? The stock market is one of the few ways the average Joe can actually build wealth. Just don't speculate on random tips from random people and buy big blue chip stocks that pay dividends. If you are starting with small amounts or doing monthly contributions, use a mutual fund or an ETF that consists of such companies. A couple examples of an ETF could be the Dow Jones Index, S&P500 Index, or NASDAQ100 Index. You could also find a mutual fund such as a US Equity Fund or US Dividend Fund.

In my opinion: I honestly think a well diversified balanced portfolio is a good place for a newbie to start.

 

[Muzzle of Bees]

The OP is asking for advise. For over a decade I invested between $200 and $300 per month in mutual funds, stocks, bonds, etc. I got tired of not making any money. It did have some money left after 2008. I cashed out and payed off my house. That was the best investment I ever made.

I will let you do the math. As the price of stock increases you have to invest more to get the same amount of shares or you get less shares and less profit. You are also going to pay a fee for managing your money. You can chase your tail for ever and hardly feel empowered by the system.
You have as much a chance at making a profit by researching scratch off games and buying tickets for the games that still have tickets with big prize money available. The stock market = Vegas. If I was able to get in IPO's that were not already bought by big investors and banks I might have a different view.
Do not ever forget the crumbs the market leaves for the vultures is disturbing to say the least.
Three things that will save you from getting desperate. Do not get married. Do not have kids and do not get into school debt from a crappy university.

 

[Victor_inox]

Three things that will save you from getting desperate. Do not get married. Do not have kids and do not get into school debt from a crappy university.

:crybaby:

 

[AKmoney]

The OP is asking for advise. For over a decade I invested between $200 and $300 per month in mutual funds, stocks, bonds, etc. I got tired of not making any money. It did have some money left after 2008. I cashed out and payed off my house. That was the best investment I ever made.

The market tanked in 2008 but it's literally doubled in value since then. If you sold everything in 2008 you would have missed out on enormous gains.

I will let you do the math. As the price of stock increases you have to invest more to get the same amount of shares or you get less shares and less profit. You are also going to pay a fee for managing your money. You can chase your tail for ever and hardly feel empowered by the system.
You have as much a chance at making a profit by researching scratch off games and buying tickets for the games that still have tickets with big prize money available. The stock market = Vegas. If I was able to get in IPO's that were not already bought by big investors and banks I might have a different view.

I disagree. This isn't how compound interest works. For example, starting with a balance of $0, if I were to invest the IRS' maximum-allowed $18,500 per year into a 401k plan at an average return of 6% annually, after 24 years I've got over $1M.

Three things that will save you from getting desperate. Do not get married. Do not have kids and do not get into school debt from a crappy university.

Now this is definitely something we can agree on

 

[Muzzle of Bees]

The market tanked in 2008 but it's literally doubled in value since then. If you sold everything in 2008 you would have missed out on enormous gains.



I disagree. This isn't how compound interest works. For example, starting with a balance of $0, if I were to invest the IRS' maximum-allowed $18,500 per year into a 401k plan at an average return of 6% annually, after 24 years I've got over $1M.



Now this is definitely something we can agree on

Let me put this terms you might understand. I studied photogrammetry and business in school. I am no stranger to math. No one I know gives 18k a year to these theives. And I would never wait 24 years for that to materialize. Your compound interest goes away too if it's reinvested in the same funds.
My point is that I have no intention of ever contributing into a system that is deliberately controlling markets for their own gain, while not giving a shit about my contributions. What's the benefit of being a good investor and contributing only to see it vaporize to half its value just when you need it? Some people will make out riding the coat tails of rich and powerful. Most won't. I am just not interested in giving them the opportunity. You can, the OP can too. I don't care. I know I am done with those people.

 

[HerT4R]

Let me put this terms you might understand. I studied photogrammetry and business in school. I am no stranger to math. No one I know gives 18k a year to these theives. And I would never wait 24 years for that to materialize. Your compound interest goes away too if it's reinvested in the same funds.
My point is that I have no intention of ever contributing into a system that is deliberately controlling markets for their own gain, while not giving a shit about my contributions. What's the benefit of being a good investor and contributing only to see it vaporize to half its value just when you need it? Some people will make out riding the coat tails of rich and powerful. Most won't. I am just not interested in giving them the opportunity. You can, the OP can too. I don't care. I know I am done with those people.

Thats a very interesting strategy, and you're kind of wrong in any case (per boglehead proven investement methods).

you can do it your way and it may work for you. but most of us don't want to play the real estate market with our whole pension, which can be just as volatile or more so.

OP asked for beginner advice and i think real estate is not for beginners, you may disagree and so may he, but thats where we all do something different.

i think diversification is where you missed out. also you, and you alone select the funds that you populate your IRA and even your 401k with, so if you chose wrong you should have mixed it up and tried again, but not too often as you are in it for the long run in an IRA, HSA, and 401k.

Thats what you may be missing is the ability to play the long game. Its proven. And yes so is real estate and the stock market if you play it right, its just harder IMO, YMMV.

Basically you putting on your tinfoil blindfold and earmuffs to the other methods doesn't make them wrong or bad, it just makes it not for you. Just like your methods arent for me.

 

[Victor_inox]

What are you people arguing with each others. We all need beginners to take their money in fair trades.
Let them be, we welcome all money to the pit.

 

[AKmoney]

And I would never wait 24 years for that to materialize. Your compound interest goes away too if it's reinvested in the same funds.

I really don't follow you here. 24 years is a completely realistic time frame when discussing a retirement savings plan. Even 30 years is totally acceptable, especially when getting started early in life such as in your 20s. I also don't get what you mean by compound interest going away.

All OP needs to do is invest in a highly diversified ETF or mutual fund through something like Betterment or Vanguard. The fees are very low. Let the market take care of the rest.

 

[taxmanX]

FleckensteinCapital
High Tech Strategist - Fred Hickey
Gloom Boom Doom Report - Marc Faber

Now is a very difficult time to "learn" investing. Central Bankers around the globe have distorted the market. The above references will help you. Good Luck.

 

[jimday1982]

I skimmed through this entire thread and saw a couple mentions of Bogleheads.org and I wanted to just quickly +1 that recommendation.

Joining this group and following their savings and investing mantras has quite literally been one of the best things I've ever done. The sheer amount of time-tested, proven and practical advice available (free of charge) here is simply amazing and I credit our financial success 100% to this community.

Interested? Start here and then dive deeper as needed.

Any questions? Their forum has you covered.

Best of luck to all.