Thread: any investing experts here?

hey you guys is this considered a good or a poor time to invest money in things like IRAs and stocks? or..what IS the best way to invest leftover money right now (we dont want to buy a house right now)

sorry i'm still a bit loopy from percocet so hope my question is clear enough

I'm not an expert by any means (my undergrad wasn't in finance and I'm only just about 1/3 through my MBA), but here are my 2 cents...

Now is a great time to look at investing in IRAs or stocks in businesses that will not crash with a recession (i.e. - nothing trendy like pet rocks... think more staying power than that). Yesterday I believe the stock market was within 10 points of "bear" range, which causes widespread panic and dumping of stocks so prices, even on good stocks that will increase hugely after this slowdown, will tank. So, if you want to go the stocks route, the best thing to do would be to do your research on several companies (usually financial statements for the past 10 years are readily available on any major corporation's site), trends, future plans, and then when you hear that the stocks have dropped to the point of hitting "bear market" range, buy after everyone else is selling and then wait because you should get great ROI when things pick up again.

For a little less risk, you may want to look into international companies that don't do much business with politically instable areas, and make sure that their liquidity ratio is good and they put sufficient amount into R&D and have something to show for it.

Personally, we are investing in Roth IRAs through our bank with a moderate risk level and only made a small foray into investing in the stock market on our own.

I'm not sure that helps... hopefully a finance person will step in with lots of good info. :)

thank you so far:)

Again - I am not an expert, and I am in a different economy to yours. However I would say that investing in a broad spread of sectors is better - a FTSE 100 fund, or your equivalent the top 100 Dow Jones companies. Researching companies is both time consuming, and is sort of like learning a lot about a horse you want to back in a race. For some people it's fun, and they don't care if their horse looses. Instead, you sort of want to bet on the top 100 horses at once, if you see what I mean, that way some of them are bound to win over time.

Also, whether you invest now depends on your attitude to risk (what would happen if your investment went down instead of up), and when you need to see returns (what would happen if it took 8 years for you to see good returns). A good financial adviser should be able to look at your attitude to risk and recommend a route for you. It could be better to pay off any debts before you think about saving or investing, your adviser should be able to tell you.

I have found [ame="http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0471730335"]The Bogleheads Guide to Investing[/ame] a fantastic resource for developing and asset allocation strategy.

I'm no expert, so you can take my advice with a whole shakerfull of salt -- but I have had success as a small-scale investor.

The whole point of investing is to buy low and sell high, and stocks are very low right now. Many, many people lose money in the market because when stock prices are falling, they get scared and want to sell, and when stock prices are rising, they get excited and want to buy. It takes a lot of intestinal fortitude to do the opposite, but it's how you make money in stocks.

The trickier bit is choosing WHICH stocks to buy and knowing when to sell them. I suggest getting some kind of professional help with that, there's no one foolproof strategy. Or read a lot of books & magazine articles on the subject so you thoroughly understand what you're doing.

shame you dont live in the UK as I work for a stock brokers!
Here right now is a god time for ISAs but as for stocks...eveything is pretty poor right now :(

My first advice would be to wait until you are off Percocet before your decide where to invest your money.

Second advice, dont put all your eggs in the same basket . so diversify in 2 or 3 places so you dont risk loosing all if something goes wrong. Especially in the US ,banks are going bankrupt often, big cmpanies are unpredictable, lots of financial scandals.

Stocks need to be followed on a regular basis. they require some reasearch before you buy , while you have them , and know when is a good time to sell. If you dont follow financial news on a regular basis , or if you dont know anything about the companies you are buying from you are taking a big risk. ok, if you have lots of money to play around with, but not if you have a little to invest. Stocks of big companies sumetimes plummet when a scandal comes or they hide info and then boom they cut 2000 employees and stock start going down at a fast pace.
Financial advisors or brokers sometimes are a waste of time, they eat a chunk of your money with sometimes high comissions. and over here some barely have any training almost anyone can improvise themselves financial advisors. so unless someone recommends a good one your better off doing lots of reading and getting the info yourself.

sometimes mutual funds are ok , again if you take time to choose, shop around there are a lot of those. Less of a risk , cause your risk is spread out, as long as the mutual fund company is a honest one.

For the more conservatives choices you can buy governement bonds or municipal bonds , you capital is garanteed , lower interests but in Canada and many european countries they are 100% safe options.

a mix of conservative investment + mutual funds could be a good option if you dont want to take a risk.

Stocks can make you win or loose a lot so think about it first.

lol they switched me to Vicodin can i study now? lol j/k

Will be doing lots of reading..it's another interest of mine, I do like the idea of an adviser but I'd really like to learn how it all works myself too. We have no debt and no mortgage on either place and i'd like to do some conservative stuff and then maybe a bit of riskier things. I always thought it would be fun to learn about options but i hear you can lose your ass.

So buying low i understand that but if you buy low right now and they keep going lower, you are losing money right? or is that just considered losing if you pull out right away as opposed to if you buy low and sit tight and wait for it to swing back up? that was my basic understanding ( i know there's more to it than that) but to buy right now while it's low and wait it out

Originally Posted by jesennia

lol they switched me to Vicodin can i study now? lol j/k

..l;, maybe Mish Mish has some advice ....

Originally Posted by jesennia

l

So buying low i understand that but if you buy low right now and they keep going lower, you are losing money right? or is that just considered losing if you pull out right away as opposed to if you buy low and sit tight and wait for it to swing back up? that was my basic understanding ( i know there's more to it than that) but to buy right now while it's low and wait it out

Exactly. Which is why you never put money into stocks that you think you might need in the next 5 years or so -- you don't want to have to pull out prematurely.

I invest pretty often but like most here am no expert. The best place IMO is to max out your Roth IRA every year before doing regular investing in stocks traditional IRAs or what have you! If you haven't put anything in that invest there first. I think the max per year right now is $3500.
Happy nest egging!!
xoxo,
-NJ

I have a financial adviser who oversees my portfolio and I cop a lot of flack about paying someone a commission (usually from boyfriends who are full of good advice but have never saved or invested a cent themselves. Grrr). But I use an advisor because I don't have the patience to oversee all my investments and make all those decisions myself. I get all enthusiastic and read up on things at the start, but it's the ongoing overseeing that makes my eyes glaze over. And I hate making important decisions without some advice. It's just too stressful for me to do it 100% myself. So for me, an advisor is a good option. By using one, I've been able to spread my investments over a very diverse range of instruments, which have stood up well to market fluctuations (except right now when everything's crap!). It would have been way too complicated for me to make up such a diverse portfolio by myself.

Having said that, I think it's really important to understand investing yourself, so that you don't feel like you're following an advisor blind, you can question everything they do (and understand the answers) and even say no to their recommendations. I have also invested in cash and shares outside of my managed portfolio, so I feel comfortable that I'm not totally beholden to my advisor, and good that I am making some idependent investment myself.

And I think it's important to take time choosing an advisor - really chat to them and see if you feel comfortable that they understand you and respect your own wishes, that they communicate clearly and don't just try to baffle you with their brilliance (ie: bulldust). I spoke to advisors from a stockbroking firm, a bank and several independants before committing to one.

(PS - I just made an offer on a house.....arghhhh! Totally scary!)

Originally Posted by miriamgamal

Personally, we are investing in Roth IRAs through our bank with a moderate risk level and only made a small foray into investing in the stock market on our own.

So what is the advantage of a Roth IRA? Why would that be a better choice? We had someone else tell us that as well but elements of it just did not seem practical.

Lisa

Originally Posted by jewelbellydance

I have a financial adviser who oversees my portfolio and I cop a lot of flack about paying someone a commission (usually from boyfriends who are full of good advice but have never saved or invested a cent themselves. Grrr). But I use an advisor because I don't have the patience to oversee all my investments and make all those decisions myself. I get all enthusiastic and read up on things at the start, but it's the ongoing overseeing that makes my eyes glaze over. And I hate making important decisions without some advice. It's just too stressful for me to do it 100% myself. So for me, an advisor is a good option. By using one, I've been able to spread my investments over a very diverse range of instruments, which have stood up well to market fluctuations (except right now when everything's crap!). It would have been way too complicated for me to make up such a diverse portfolio by myself.

Having said that, I think it's really important to understand investing yourself, so that you don't feel like you're following an advisor blind, you can question everything they do (and understand the answers) and even say no to their recommendations. I have also invested in cash and shares outside of my managed portfolio, so I feel comfortable that I'm not totally beholden to my advisor, and good that I am making some idependent investment myself.

And I think it's important to take time choosing an advisor - really chat to them and see if you feel comfortable that they understand you and respect your own wishes, that they communicate clearly and don't just try to baffle you with their brilliance (ie: bulldust). I spoke to advisors from a stockbroking firm, a bank and several independants before committing to one.

(PS - I just made an offer on a house.....arghhhh! Totally scary!)

Agree!
My financial advisor is amazing.
May also want to check out "Smart Couples Finish Rich" by David Bach. Very easy to understand and doable ways to invest.

Originally Posted by Lisa Michelle

So what is the advantage of a Roth IRA? Why would that be a better choice? We had someone else tell us that as well but elements of it just did not seem practical.

Lisa

I have been looking at a blog lately that had a bullet-list of info about IRAs.
How to Start a Roth IRA (and Where to Do It) ∞ Get Rich Slowly

goign back to the thing abot a financial advisor, I have always been intimidated by the idea that you need a lot of money to get started. Probably that is not the case, but can anyone say how much of a nest egg a person needs to book an appointment with an advisor?

Originally Posted by lotus

goign back to the thing abot a financial advisor, I have always been intimidated by the idea that you need a lot of money to get started. Probably that is not the case, but can anyone say how much of a nest egg a person needs to book an appointment with an advisor?

You don't need a nest egg to book an appointment with an advisor - you can make an appointment to speak with them about your spending, your long range financial goals, and short range goals. They can help steer you towards savings, how much to invest, what to invest in, your debt, etc.

If anyone does intimidate you or make you feel like you don't have enough money, run out of there!

Often, credit unions offer financial advisor services with an independant financial advisor for free. So that's a great option to check out if you'd like to meet with an advisor but are a tad unsure.

Originally Posted by Lisa Michelle

So what is the advantage of a Roth IRA? Why would that be a better choice? We had someone else tell us that as well but elements of it just did not seem practical.

Lisa

We chose a Roth IRA because we are just starting out and hope to be well into a higher tax bracket at retirement. Because we put after-tax dollars into a Roth, the government cannot tax the earnings of the IRA and so any withdrawals in retirement are tax-free, which will help since assuming the higher tax bracket thing, we'd be paying a larger percent on any earnings.

A Roth IRA is a wrapper on an investment portfolio. You invest any after tax monies, any earnings made on that money can be withdrawn tax free.
Vs a traditional IRA or 401k where you invest pre-tax wages and get taxed on ALL of it, original investment and any earnings, once its withdrawn.
I love it!

I've said it once here and I will say it again, check out suzeorman.com or watch her show on cnbc on Saturday nights. She always has advice on investing. Becareful of fees you pay to brokers and for specific accounts. She always suggest using dicount brokerage firms and doing as much on your own as possible because nobody will care about your money more than you. I have had problems with brokers not investing my money properly and costing me thousands. Always diversify your funds!!! European markets are good investments right now and Suze also suggest some Middle Eastern market, unfortunately I don't remember what it was called. You should always have money in a retirement account, that shouldn't even be considered as an investment of your available funds. I liked Palmier's advice above, go read what she says again! Good-luck!

i'd like to 'teach' my 12 year old about this as i'm learning..is there a website out there that teaches you really simple stuff ?

seems at one point someone told me about a site where you can learn about stocks and then you get 'play money' to practice with before doing the real thing..i'd love to get him going on that so he can learn 'safely' without real cash

I think if you want to teach him about personal finance, stock market simulators are probably not the best place to start. Most people have very little need to ever invest in individual stocks, and it won't teach him much that is really all that applicable. I don't know of any 401K/home-down-payment-savings-account simulators out there! ;)

I have bought many, many copies of [ame="http://www.amazon.com/Wealthy-Barber-Updated-3rd-Commonsense/dp/0761513116"]The Wealthy Barber[/ame] for friends of mine when they needed a good genera basic introduction to managing their finances - but even that is perhaps too much practical advice for a 12 year old who is probably not trying to decide whether to buy a house or life insurance just yet. ;)

I love this thread! Thanks everyone for the good info.

I also love Suze Orman, as does my sister. She puts things into simple terms and gives you a step-by-step program about what to do.

Good luck!

If you're really new to the whole world of investing, I think those 'xxx For Dummies' or 'Idiot's guide to xxx' books can be a good place to start. They will provide a broad, simple overview, which gets you familiar with the different investing instruments and terms used. Then you'll have a better idea of what specific things you need to know more about, and can follow up with more current analysis and talking with experts.

I just gave myself a crash course in buying a house (contract being signed tomorrow woo hoo!) using a 'For Dummies' book, and I really appreciated that it took me from having no clue (and therefore being too afraid to start) to feeling confident that I at least knew what I need to know (and could start chasing it all up).

It's not cheap, but for teaching financial management to kids I LOVE the board game associated with the Rich Dad, Poor Dad books. Adults can learn an awful lot from it, too. It doesn't teach investing exactly, it teaches how to think about money.

Lauren i just picked it up... CASH FLOW FOR KIDS ...we have to wait until jr goes to bed but it just arrived and I'm looking forward to teaching Moki (and myself) about it

I have "Cash Flow for Kids"...and honestly, it's great for young kids, but those who are closer to their teens will probably learn more with the regular game.

Cash Flow 101 and 102 have really made a big difference for me. Love it.

My husband has written a 32-page document on what he thinks is happening with the U.S. economy and what it means with respect to investing strategies. If anyone wants a copy, send me a private message telling me what your email address is and I'll send it. It's in the form of a Microsoft Word document.

Warning: it contains a lot of detail. It'll take some time to digest it all.