Support NeoGAF

[xkramz]

I got into a deep conversation with one of my co worker. He telis me his winnings and losses. And the gamble he has taken buying stocks. He told me he bought a stock for a few dollars and change and almost 15 years later he tripled his money.

Now I know it's easier to just Google. But I want personal input if it's a legitimate way to make a decent income off it, I'm 25 so that mean buying long term stocks are a gamble (sort of)

I know this is a gaming forum, but maybe someone with knowledge could give me some pointers on stuff that other people won't tell u otherwiser?


Sorry for the random thread. Just hope to get some answers

 

[Relix]

Stocks are great, but I stopped investing in them for a year or two now. The reason? The High. The Indexes are so high that a correction will happen and everything will drop sooner or later. Then is the time to buy, but identifying when is the problem. I made a lot of money a few years back with the crisis, but last thing I bought was FB IPO and that kind of backired (no thanks to NYSE not taking my order until 3PM but whatever). I did buy some Burger King (BKW) and made some of that lost FB money back but... meh, I am waiting.

 

[TCRS]

We have a whole community thread dedicated to stocks and shit. one day I'm going to read it and become rich.

http://www.neogaf.com/forum/showthread.php?t=176332

 

[I'm an expert]

It's not a random thread, we have a giant stock-age thread here that I'm too lazy to link. Go there for more people to talk with. I don't know what you need to google to confirm. Myself and others in the stock thread constantly make 4+ figures in the short term from a variety of different investments. Those of us that fucked with stocks like TWTR and AMRS scored huge last week off of being short. There are plenty of longs in there too who invest in a variety of plans and indexes. Head there first, but you basically have to ask yourself two questions if you want this to be more active than passive income:

1. Do you have the commitment to do endless reading and research?
2. Do you have money that you could throw in the garbage right now and not give a shit about?

 

[xkramz]

I asked the guy where's a good place I could start and he said to try mutual funds while I learn more about stocks. What's your personal take on that? Ofcourse I won't go all out since I'm a newb at it. But Im deff overlookedmotivated the on learning more about it

I shall check the thread out. thanks for linking me to the right place

 

[Relix]

I asked the guy where's a good place I could start and he said to try mutual funds while I learn more about stocks. What's your personal take on that? Ofcourse I won't go all out since I'm a newb at it. But Im deff overlookedmotivated the on learning more about it

Read. Learn. Don't jump into this world hastily. This is the way people burn away money. Read and learn my friend or you will crash and burn like millions of other people.

 

[Gallbaro]

It's not a random thread, we have a giant stock-age thread here that I'm too lazy to link. Go there for more people to talk with. I don't know what you need to google to confirm. Myself and others in the stock thread constantly make 4+ figures in the short term from a variety of different investments. Those of us that fucked with stocks like TWTR and AMRS scored huge last week off of being short. There are plenty of longs in there too who invest in a variety of plans and indexes. Head there first, but you basically have to ask yourself two questions if you want this to be more active than passive income:

1. Do you have the commitment to do endless reading and research?
2. Do you have money that you could throw in the garbage right now and not give a shit about?

Don't forgot:

Its all a waste of time unless you are investing in micro (not efficiently priced stocks)because the indexes will outperform you.

 

[teh_pwn]

I got into a deep conversation with one of my co worker. He telis me his winnings and losses. And the gamble he has taken buying stocks. He told me he bought a stock for a few dollars and change and almost 15 years later he tripled his money.

The general market beat his performance. On average the entire stock market returns about 9% average annualized nominal interest. 1.09^15 > 3.0x.

Now I know it's easier to just Google. But I want personal input if it's a legitimate way to make a decent income off it, I'm 25 so that mean buying long term stocks are a gamble (sort of)

It's not gambling unless you have all of your money in stocks when your life depends on cashing out instantly at any point in time. If the stock market goes to 0, then your money is worthless because society collapsed.

Recommended reading:
http://www.amazon.com/dp/0071362363/?tag=neogaf0e-20
http://www.amazon.com/dp/0071494707/?tag=neogaf0e-20

 

[clav]

Your worker is not telling the other side of the story: losses.

You might feel compelled to get into individual stock investing from success stories, but do your reading before you jump in completely.

 

[Hari Seldon]

Don't forgot:

Its all a waste of time unless you are investing in micro (not efficiently priced stocks)because the indexes will outperform you.

Exactly. If you want to *invest*, go for an index fund, with the smallest fee possible. If you want to gamble, then go for single stocks.

 

[ViewtifulJC]

Funny this thread shows up, my dad has really been trying to get us and my siblings into investing. He thinks its really important to have a form of secondary income, or something you can build up over years and have when you retire.

 

[teh_pwn]

Funny this thread shows up, my dad has really been trying to get us and my siblings into investing. He thinks its really important to have a form of secondary income, or something you can build up over years and have when you retire.

He's correct. SS is basically poverty.

Investing into broad index funds with the proper time horizon is not gambling. Stuffing cash into a saving's account is guaranteed hard losses to inflation.

 

[clav]

Funny this thread shows up, my dad has really been trying to get us and my siblings into investing. He thinks its really important to have a form of secondary income, or something you can build up over years and have when you retire.

No one can live off social security. Some people find that out too late.

If your workplace doesn't offer a 401K, then consider opening an IRA.

 

[NYR]

If you're posting a thread on a message board asking for secret tips on how to make money on the stock market and HONESTLY believe it could be summed up in one post, you've already failed. and failed hard.

The only advice you'll get of any value in this format - buy low, sell high.

Committing to learn about markets is no different than trying to learn a language - takes time, practice, commitment.

 

[hipbabboom]

Funny this thread shows up, my dad has really been trying to get us and my siblings into investing. He thinks its really important to have a form of secondary income, or something you can build up over years and have when you retire.

You're dad is a smart man. I met a guy at Starbucks a few weeks back that was really talking up Options Trading and how it changed his life. I recently opened a ShareBuilder account to start dabbling in it. I also have been educating myself on the matter through resources like Khan University online lecture on options. You should get through it in about a couple of hours but you'll probably need to visit it a few times. He also gave my friend tips on stocks to buy (Disney and Starbucks and some Medical thing) that have all been performing well for her. He seems to know his stuff and it was just a passing stranger

 

[clav]

Investing into broad index funds with the proper time horizon is not gambling. Stuffing cash into a saving's account is guaranteed hard losses to inflation.

With interest rates so low, perhaps.

Really depends on the person's age/timeframe to retirement. Everyone's definition of retirement differs.

 

[I'm an expert]

You're dad is a smart man. I met a guy at Starbucks a few weeks back that was really talking up Options Trading and how it changed his life. I recently opened a ShareBuilder account to start dabbling in it. I also have been educating myself on the matter through resources like Khan University online lecture on options. You should get through it in about a couple of hours but you'll probably need to visit it a few times. He also gave my friend tips on stocks to buy (Disney and Starbucks and some Medical thing) that have all been performing well for her. He seems to know his stuff and it was just a passing stranger

Do not begin with options lol. You will be slaughtered.

 

[Zaraki_Kenpachi]

What are you even trying to accomplish? Your posts are extremely vague. Is this for retirement or you want to gamble?

Do not begin with options lol. You will be slaughtered.

Yeah, that's incredibly stupid to do.

 

[Rubenov]

Go to Seekingalpha.com and start reading articles and news. Don't follow recommendations blindly as they're wrong a lot of the time (as are almost all market analysts). But it teaches you the concepts of investing and gets you thinking / learning.

 

[teh_pwn]

With interest rates so low, perhaps.

Really depends on the person's age/timeframe to retirement. Everyone's definition of retirement differs.

I should have noted I had the OP's time horizon in mind (30-45 years). You can grit your teeth and stuff away 500K USD into saving accounts over that time, but it may only be worth 100K in today's USD by then. Not particularly large supplemental to SS.

 

[ViewtifulJC]

Ha, well, I'm only 23 in my last semester in college. I'm not much for gambling, but it would be great to have saved a decent amount of money later in life. Just put some money away and let it build over time. Its something I wanna do early, but I don't know where to start.

 

[clav]

Ha, well, I'm only 23 in my last semester in college. I'm not much for gambling, but it would be great to have saved a decent amount of money later in life. Just put some money away and let it build over time. Its something I wanna do early, but I don't know where to start.

Usually this site is a good place to begin for that kind of thinking.

http://www.bogleheads.org/wiki/Bogleheads®_investing_start-up_kit

Also a Random Walk Down Wall Street is highly recommended: http://www.amazon.com/dp/0393340740/?tag=neogaf0e-20 Your local library will probably stock it.

Read teh_pwn's suggested books, too, as they are also great material.

Recommended reading:
http://www.amazon.com/dp/0071362363/?tag=neogaf0e-20
http://www.amazon.com/dp/0071494707/?tag=neogaf0e-20

 

[teh_pwn]

Ha, well, I'm only 23 in my last semester in college. I'm not much for gambling, but it would be great to have saved a decent amount of money later in life. Just put some money away and let it build over time. Its something I wanna do early, but I don't know where to start.

Read the books I linked to earlier. Incredibly safe and efficient way to invest long term assuming you don't need to cash out instantly at any moment.

Inflation will ravage your savings account. Seriously, its not an option.

 

[hipbabboom]

Do not begin with options lol. You will be slaughtered.

What are you even trying to accomplish? Your posts are extremely vague. Is this for retirement or you want to gamble?



Yeah, that's incredibly stupid to do.

Granted I'm not trying to get into Arbitrage opportunities and puts are shorting is scary but are you saying calls here in the US are any more risky than stocks?

 

[Zaraki_Kenpachi]

Granted I'm not trying to get into Arbitrage opportunities and puts are shorting is scary but are you saying calls here in the US are any more risky than stocks?

You have to pay for options, yes, there's always more risk with options.

Edit: I should reword this.

Both have risks. Options protect against downside potential but it's most likely harder for you to know how to value them to beat the spreads so you actually make money. The downside in stocks in you have a downside, the stock could theoretically go to zero but the odds of that happening in an instant are slim. Why are you even investing in options/individual stocks? Do you already have a well funded retirement? Is this money you can lose with no reprucussions? If the answer to any of those is no then you have no business being in individual stocks OR options.

 

[Erehtih]

Granted I'm not trying to get into Arbitrage opportunities and puts are shorting is scary but are you saying calls here in the US are any more risky than stocks?

I'd say calls are riskier than stocks due to the premium loss. If strike price isn't hit, then premium is gone and even if it's in the money, it has to be well above to compensate for the premium.

Edit: OP, I really think index funds are the way to go. Unless you're willing to dedicate a large amount of your time into equity research, then just let the money sit in index funds.

 

[Piecake]

You should invest in low cost index funds for the long term - meaning retirement. Investing for retirement is what the vast majority of people should be focused on for their investments. You can take advantage of that with such things as 401ks, Roth IRAs, and Traditional IRAs (tax advantage retirements vehicles)

These are the funds I Like

https://personal.vanguard.com/us/funds/snapshot?FundId=0085&FundIntExt=INT

https://personal.vanguard.com/us/funds/snapshot?FundId=0113&FundIntExt=INT

I am in favor of a 60/40 split between those two funds. Lot of people like to include bonds as well, but I don't think those are necessary until 10 years or so before you retire

Why do it this way? Because the data consistently shows that no one can consistently beat the market. Do they sometimes? Of course, but when you take into account the higher fees it simply makes no sense to invest in an actively managed fund. You will lose out. Data shows that you will be far better off simply following the market

Why not stocks? Well, I think investing in stocks is more risky, a lot more work, and requires a lot more of your time. The benefit of this is that you can just invest in those two funds (or three with bonds), invest in those ratios, and forget about it. No thought required. No stress too (which is a huge plus)

Why invest at all? Well, inflation. If you don't invest your money will be worth less than it is now. Basically if you don't invest you are losing money. Also, retirement. You need to invest, and have a pretty sizable retirement fund to actually have a comfortable retirement. If you don't invest and only rely on social security, you will be living in poverty.

As for why I don't invest in bonds and plan on investing in them when I am 50 or so. If you are in your 20s or 30s, you should be concerned with growth. Who gives a shit if 10 years from now the market crashes? That doesnt impact you. You only get loses if you sell, and since you have 20 more years to invest, the market will bounce back.

When youre 55 or so, start investing in bonds because if the market crashes when you retire and you need to sell your investments to survive, well, you definitely want to sell your bonds instead of your stocks. That reason being is that the bonds are far less variable than stocks, so if they go down, they wont go down much. Stock market crash though? Well, you would be forced to sell at a super low price, and that is not good for your retirement

 

[clav]

As for why I don't invest in bonds and plan on investing in them when I am 50 or so. If you are in your 20s or 30s, you should be concerned with growth. Who gives a shit if 10 years from now the market crashes? That doesnt impact you. You only get loses if you sell, and since you have 20 more years to invest, the market will bounce back.

When youre 55 or so, start investing in bonds because if the market crashes when you retire and you need to sell your investments to survive, well, you definitely want to sell your bonds instead of your stocks. That reason being is that the bonds are far less variable than stocks, so if they go down, they wont go down much. Stock market crash though? Well, you would be forced to sell at a super low price, and that is not good for your retirement

What's your take on i-bonds?

 

[Piecake]

What's your take on i-bonds?

I never really looked into them because I really didnt want to bother with the hassle of owning individual bonds

When I start investing in bonds when I am 55 or so I will probably do a 50/50 split between TIPS and total bond fund. I like TIPS a lot because they are inflation protected, exactly what bonds are weak against and stocks are strong against. So basically you keep your inflation hedge with TIPS while devesting out of stocks.

Total bond because, well, why not. Might as well invest in every bond (or at least as much as you can in one fund) since you don't know which one will do better

 

[Deleted member 17706]

Interesting stuff. As I gradually approach 30, I've often seriously thought about jumping into stock trading. I've always just been afraid of the commitment that a serious endeavor would require. I can totally see it consuming me, where I'm spending all of my free time (and money) on reading and investing and trading.

It really does make sense as a way to make money long-term, though, because as people say, savings accounts are jokes. If you're not spending your money, you're losing it.

edit: also, this is a dumb question, but why is it that a normal individual can not buy and sell stocks on their own without going through a broker? If you study to become a licensed broker, could you then manage your own stock buys and sales?

 

[Zaraki_Kenpachi]

Interesting stuff. As I gradually approach 30, I've often seriously thought about jumping into stock trading. I've always just been afraid of the commitment that a serious endeavor would require. I can totally see it consuming me, where I'm spending all of my free time (and money) on reading and investing and trading.

It really does make sense as a way to make money long-term, though, because as people say, savings accounts are jokes. If you're not spending your money, you're losing it.

You should be contributing to retirement accounts, not stock trading. They aren't the same thing.

 

[Onion_Relish]

I think the most important things to remember about stocks are that you should really only invest in things you know quite a bit about, and you should set goals and do your best to stick to them. I made about $1000 from may to dec from my original 5000 investment simply because i knew quite a bit about the stocks i was purchasing and did some good research. I have an arts degree.

 

[Deleted member 17706]

You should be contributing to retirement accounts, not stock trading. They aren't the same thing.

I don't intend to do anything until I read up enough to at least somewhat know what I'm doing.

I may have specified stock trading, but I meant to speak more generally about investing in something that can yield a return. I'm sure there are plenty of ways to do that, but a standard savings account is not one of them.

 

[PastorOfMuppets]

I made bank in college trading derivatives. No joke. I did it during the housing boom and was making money off primary industries - mostly mining and oil.

It's definitely possible but to sustain it over a long period is very difficult.

 

[nullset2]

I've been also interested in investing and stock in a fashion similar to OP, but yeah, it is quite the lifelong venture. It takes time and endless research and education, but I'll get there over time.

For now, though, OP, while you wait and learn, get entertained with this little relevant ditty that Terry Cavanaugh of VVVVVV fame created some time ago.

http://ded.increpare.com/~locus/american_dream/

 

[Discordian_taco]

I day trade options. Get ready to burn money. Practice with paper trading first, investopedia has a decent simulator. If you're looking to invest then invest in index funds like SPY.

 

[Stronty]

He's correct. SS is basically poverty.

Investing into broad index funds with the proper time horizon is not gambling. Stuffing cash into a saving's account is guaranteed hard losses to inflation.

Heh, sounds like we should have jacked interest rates up to 15-20% not lower them to 0, the pain would been over quickly. I remember seeing a 1982 chevy ad on youtube and the loan rate was 18%. Cheap money is theft.

 

[Cyan]

You should invest in low cost index funds for the long term - meaning retirement. Investing for retirement is what the vast majority of people should be focused on for their investments. You can take advantage of that with such things as 401ks, Roth IRAs, and Traditional IRAs (tax advantage retirements vehicles)

Yep. Broadly speaking, everything in this post is solid advice that most people should follow.

The only reason to invest in individual stocks is if you have some special knowledge about the stock (and you don't--if you actually do have special knowledge, you're insider trading and going to get arrested ), or if you're just in it for the fun. In which case you should invest in index funds and gamble with individual stocks.

 

[Deleted member 17706]

I think you should seriously consider not posting and inquiring about these matters when the answers are obvious and available to you if you look for them elsewhere.

Just get out and research. Anything you read here is nothing but a blanket statement that may or may not be applicable to your situation. If everyone followed what anyone here has to say regarding specific strategies, getting rich would be easy.

EDIT: Start small. Go to www.investopedia.com and start reading. use this as a launching pad and not as a final destination.

The first rule of fight club, eh?

But, yeah, I don't plan on jumping into the game after reading a bunch of posts here. As I posted earlier, if I do get in, I plan to do plenty of research ahead of time.

The broker question was just something that I was curious about since I always see people complaining about fees.

 

[Cyan]

Sorry, I know I shouldn't call it gambling since the hallmark of gambling is a negative E(R) and individual stock investing has a positive E(R), even if the volatility is much higher than I'd like.

What I'm trying to say is that most people are going to be better off just plopping their money in index funds, unless they particularly enjoy the act of stock trading, which can be fun and interesting in a similar way to gambling, though more likely to actually earn you money. Does that seem more fair?

 

[Zaraki_Kenpachi]

For sure, I was not trying to disregard your intent and I knew what you had meant, but when virgin eyes read this stuff and cannot put things into context due to low level or lack of any knowledge, we have to be careful. We want to empower, not frighten

I take this shit too seriously as you can tell. for better or worse.

Yeah, we also want them to understand the risks involved too. A lot of people were using terms like "trading" or "trading stocks" instead "investing" which seemed to indicate people thought you should just be looking for random individual stocks to pick and retire with instead of a diversified portfolio.

 

[RustyNails]

Ok so pot is going to sell out in Colorado and people are expecting more demand than supply. Any publicly traded IPOs stockgaf has in mind to get on the reefer madness?

 

[Piecake]

Ok so pot is going to sell out in Colorado and people are expecting more demand than supply. Any publicly traded IPOs stockgaf has in mind to get on the reefer madness?

I'd imagine that market is going to be very volatile since I don't think any big companies are swooping in. Seems like too big of a gamble, but I am rather risk averse when it comes to individual stocks