This Wonderful Market!

[MRT144]

So I got to thinking there are not enough goddamn threads about the stock market, wall street, etc etc. on poly. I know DanS posts economic data from time to time but I believe thats mostly out of his bright eyed optimism and political leanings. I want to talk about equities, bonds, interest rates, your picks, your portfolio, your feelings on where the market is going.

My situation as it stands. I recently became ****ing frenzied like a rabbit on crack cocaine about investing and trading. I think it started with reading "Liar's Poker" by Michael Lewis after reading "The Blind Side" also by him. I changed the way I looked at the market from this obtuse monolithic game I would never be able to participate in, 401(k) or otherwise. But I made it my sole objective to save up enough money to invest in 5 stocks, 500 dollars worth each, and see where it takes me. Im still short 1.5k

This led me to reading 2 books by Jim Cramer; "Real Money" and "Confessions of a Wall Street Addict". It was interesting to see his strategies, and his personal life as it was affected by his career choice. I don't think I can ever be as loudmouthed as him but his enthusiasm is alluring and I am all about enthusiasm.

Anyway, here I am wanting to get poly involved in this desire to learn more. If theres anything that Ive learned in life, it's this; I love learning. So let it all out. Everyone and Anyone!

[Rufus T. Firefly]

All my investment money is in boring mutual funds right now. I'd love to play the market someday, but with my daughter approaching college, every spare penny (aside from what I'm tithing to my retirement fund) is going to her 529. But I'd be eager to hear the wisdom accumulated here.

edit: My brother-in-law invests by picking a bundle of stocks, holding until they increase 20% in value, then selling -- regardless of how high he thinks they could go, he disciplines himself to that 20%. Is this some sort of common strategy, or just his quirk?

[MRT144]

Originally posted by Rufus T. Firefly
All my investment money is in boring mutual funds right now. I'd love to play the market someday, but with my daughter approaching college, every spare penny (aside from what I'm tithing to my retirement fund) is going to her 529. But I'd be eager to hear the wisdom accumulated here.

edit: My brother-in-law invests by picking a bundle of stocks, holding until they increase 20% in value, then selling -- regardless of how high he thinks they could go, he disciplines himself to that 20%. Is this some sort of common strategy, or just his quirk?

Well Im only 22 (almost 23!) and I figure that the earlier Im in the market, the better!

As for the 20% My Dad has a similar philosophy but sells half his position when he hits a predetermined limit and then rides it some more. I think the sole reason is he doesnt want to miss out on some larger gains on the stock, which is understandable. The reason I think the BIL does it is because he's afraid of holding something too long and not getting out at top. Better to sell too early than too late.

Although it makes me wonder, what happens if it never hits 20% or if it takes a looooong time (2 years?) to do that?

I just can't wait to have $2500. I just dont know where to put it, and I dont really feel like I will most likely be comfortable enough putting it in anything till I know more. And that should be around 4-5 months from now (coincidentally when I have $2500 based on savings)

[Rufus T. Firefly]

Originally posted by MRT144


Well Im only 22 (almost 23!) and I figure that the earlier Im in the market, the better!

That's the truth. Jane Bryant Quinn published an excellent Personal Finance book about 10 years ago that laid out the differences bewteen investing early and investing late. (I'm sure there are plenty of books that do this, but I read and liked hers). It's a real eye-opener.

Of course, it's also the case that you should be in the market early in order to buy, hold, and grow slowly. Playing the market is a different matter altogether, as I understand it.

[Saras]

best advice you'll ever get: 80% (global) index tracking, 20% non-correlating assets (hedge funds, principal protected notes, etc.).

[MRT144]

Originally posted by Rufus T. Firefly


That's the truth. Jane Bryant Quinn published an excellent Personal Finance book about 10 years ago that laid out the differences bewteen investing early and investing late. (I'm sure there are plenty of books that do this, but I read and liked hers). It's a real eye-opener.

Of course, it's also the case that you should be in the market early in order to buy, hold, and grow slowly. Playing the market is a different matter altogether, as I understand it.

well thats where some of this cramer philosophy kicks in. He reasons that the younger you are, the bigger the risks you should take (note that this doesnt mean taking only risks). The idea behind it is, the gains you can make while youre young are pretty good while if you lose it, you still have time to make it up.

[DanS]

Originally posted by Saras
best advice you'll ever get: 80% (global) index tracking, 20% non-correlating assets (hedge funds, principal protected notes, etc.).

Dear Saras--

I'm heavy into China (iShares Trust FTSE/Xinhua China 25 Index), because I'm investing for the very long haul. The problem I have is that it's tough to know whether I'm getting shafted by the dirty commie gov't.

What should I do?

Signed.

Bettingonasurething

[pchang]

If you want to play

then read up on a strategy called Dogs of the Dow. If you want to save, then look at the following families of mutual funds:
Vanguard Target Retirement X
Fidelity Freedom X
Where X is the year closest to the one you expect to retire at

[pchang]

Originally posted by DanS


Dear Saras--

I'm heavy into China (iShares Trust FTSE/Xinhua China 25 Index), because I'm investing for the very long haul. The problem I have is that it's tough to know whether I'm getting shafted by the dirty commie gov't.

What should I do?

Signed.

Bettingonasurething

BTW - you are getting shafted by the Commies. You can make good money anyway. Just make sure you are not the last one out.

PS - See references to the "Greater Fool Theory"

[Colonâ„¢]

Sell dollars, sell stocks, get out of India, get out of commodity-producing countries. Cash is where it's at.

[MRT144]

Originally posted by Colonâ„¢
Sell dollars, sell stocks, get out of India, get out of commodity-producing countries. Cash is where it's at.

can you explain why? this would only make sense if you were expecting a bear market. are you?

[KrazyHorse]

US economy is headed for a slowdown. Commodity prices have already dropped somewhat, but will probably drop more. India's overpriced due to a ridiculous runup over the last few years.

[DanS]

Does anybody have a source for the overall market cap for India?

[Dinner]

The US market has been slowing down greatly and around 1/3 of economists are predicting a reccession. Combine that with the dollar falling (to much government spending, a bad trade balance, and just international investors not liking Bush) so I'd find a nice mutual fund which has exposure to places outside of the US. China looks good though go for the Red Chips (well established Chinese companies) because they're more secure.

[KrazyHorse]

Don't buy mutual funds. Buy index funds. Mutual funds do not beat the market on average, the performance of a mutual fund is uncorrelated from period to period and the management fees represent an additional tax on your money.