As was foretold, we've added advertisements to the forums! If you have questions, or if you encounter any bugs, please visit this thread: https://forums.penny-arcade.com/discussion/240191/forum-advertisement-faq-and-reports-thread/
Options
Where can I learn about investing?
Klein
Registered User regular
Registered User regular
I'm looking for a reliable source to learn about investing. I know some general rules of thumb such as saving 15% towards retirement, but I am not clear on what things such as mutual funds are or if I should be paying someone to handle my investments. If anyone has good resources I would greatly appreciate them.
Edit: I currently cannot do any investing through my work, but will be able to in the future. I'm primarily looking for advice on outside of employment investing.
Edit: I currently cannot do any investing through my work, but will be able to in the future. I'm primarily looking for advice on outside of employment investing.
Klein on
0
Posts
However if you are looking to personally diversify or are trying to day trade, the first thing you'll need is $10,000, the fees eat you up otherwise, and I recommend any investor or potential investor to find a free stock market simulator, and play with pretend money for 6 months.
There is a free stock trading app called Robinhood that doesn't have any fees for the user for making trades.
The /r/personalfinance wiki and threads have some stuff about that. The portion of their wiki for investing is https://www.reddit.com/r/personalfinance/wiki/investing and is probably a good place to start.
If you are passively investing make sure to check in at least once or twice a year and re-balance.
A pretty easy read for DIY retirement investing.
It's less like day trading, and more long-term investing.
One reason I haven't used it because the companies that get the most returns are piles of geese dung, and the others either don't make money, or make money so slowly that you may as well just put the money into a savings account.
E: (the person who recommended this was deleted it looks like)
A good investment is a mutual fund.
A bad investment is putting all your money on 5 in roulette.
Gemini, CoinBase, GDAX, and CEX are just a few quality, legitimate exchanges for trading fiat currency to BTC or ETH and vice versa. Gemini is the first digital exchange licensed by the state of New York. CoinBase/GDAX/Gemini is federally insured for United States citizens. It is fast, easy, and cheap depending on the exchange you use. Please refrain from spreading FUD in regards to the cryptocurrency space. The fact you automatically conflate Bitcoin with a ponzi scheme demonstrates a concerning lack of knowledge in regards to digital currency and blockchain technology. It is attitudes like these push mainstream adoption of the technology further away.
@Klein I am not a financial adviser and nothing in this post should be construed as financial advice
What are your personal investment goals? Why do you want to invest? Think long and hard on the answers to these questions as they can greatly impact your strategy to reach said goals. You already know you need to be saving at least 10% of your annual income so that is a great start. As others have mentioned it is going to be hard to beat the match from your employer into your 401k. It is basically free money and there is no reason you should not do it.
To answer your question in the OP a mutual fund is basically a pool of investor's money that is used to invest in a variety of assets. A mutual fund can be good because of professional management, diversification, and the ability to create a diverse portfolio without investing individually into each company costing you a lot in fees. There are also a wide range of mutual funds featuring an even wider range of assets they invest in. Some funds are made up of assets that pay a fixed income which would be good if you were retired. Others like index funds are based on stocks you would find in the S&P500 or the Dow Jones Industrial. The downsides to most mutual funds are fluctuations in the fund's return to investors and fees. Fees are a double edged sword because you're paying for that level of professional management, but even in a bad year you pay those fees which can make the losses sting a bit more.
Doing research is an incredibly important part of investing. Even when you pay others to manage your money for you doing your own research is going to be necessary from time to time. Whatever you decide to invest in read the prospectus thoroughly. Take note of fees and whether an instrument is actively or passively managed. An instrument may do gangbusters but it may come at a steep price. Consider speaking to financial adviser even if it just to ask questions. Good luck!
Shogun Streams Vidya
Spreading misinformation, such that Bitcoin cannot be easily exchanged for fiat currency, is absolutely FUD and it is wrong. Regardless this is not a Bitcoin thread and the OP has not asked for advice about it. You have made your personal opinion on the matter obviously clear and I think we should probably steer the conversation back towards what the OP asked about.
@klein Something else occurred to me that is pretty basic but I didn't start doing it until a couple years ago. Do you do any sort of budgeting for your money? I was gifted YNAB4 on steam by a member of these very forums. Once I learned the program and the principles behind assigning all of your dollars jobs more and more of the pieces of personal finance fell into place for me. The bills are always paid, I always know if I have the money for something, and at the end of the year I get lots of details on just how I spent my money.
edit: super bummed to see YNAB was removed from Steam. And the newer YNAB5 moved to a subscription-based model which is even more of a bummer. My apologies. :x
Shogun Streams Vidya
It's better to hear from podcasts the real-world implications of investments than just reading the rote definitions. These are focused more on people who are older, but still have good info (note: I'm nearly 40)
1- Clark Howard
2- Ric Edelman
3- Stacking Benjamins
Listen to them a bit faster than normal speed. I recommend Clark Howard as a start since his episodes are only 30 mins or so, and do a decent job of addressing real life issues based on callers. He has an episode every day but it's not necessary to listen to all of them.
Finally, I highly recommend the Bogleheads link above. They tend to go really deep on subjects, but they are the best resource for getting a better understanding of how various investment instruments work.
Index funds, mutual funds, bond funds are all good for this. Index funds are great because they are not actively managed so your returns closely match the returns of the general stock market. Mutual funds are actively managed and may sometimes get higher returns but also end up with worse returns than the market in some years.
Get a Roth IRA, I wouldn't bother with a 401k unless your employer is going to match you. If your employer is matching you, then you might as well get the 401k as your salary is priced on the assumption you will take full advantage of the employer match benefit. If you don't take it you're leaving money on the table.
The number one book I'd recommend for a new investor is not The Intelligent Investor but rather A Random Walk Down Wall Street. I have read both.
The best management company is Vanguard. They have the lowest expense ratios in the industry and fund managers have a personal stake in the mutual funds they manage. When you get to admiral shares level funds your expense ratios get even lower.
My average returns with Vanguard over the past several years has been about 7.8%. I have several funds that have returned higher than that and some much lower. VFIAX is a good index fund, it has gained me 11% in the past few years I've had it.
I've given strong opinions in this post and made no effort to be unbiased. The above is what I have done and it has worked well for me.
Good luck with whatever you do.