Investing

[bwin12]

Can anyone recommend a book or other educational resource on investing? Low level. Like this is what small cap stocks mean and this is what mid cap stocks mean. And this is when you want to invest more in this one compared to the other. Currently my investment strategy is "buy stock in depressed companies that will eventually bounce back" (airlines/Boeing) and "new technology" (online gambling, Tesla in 2017, vaccines). I am doing well, its kind of fun, but I have no clue what I am doing and genuinely feel I am just getting lucky (see Tesla bought in 2017 that is currently up 600%).

I have 401k's through employers and a brokerage account with a retirement account and a Roth that I need to "manage". I feel I am at the point where I have enough money to be dangerous, but not enough to pay someone to handle it. 

 

[Roarbark]

In my own personal experience, investing and finance know-how have been a body of knowledge I slowly build up from a wide array of resources as I do research on how to handle my own money.

Basically As I deal with certain things (E.g. investing decisions, retirement funds, etc., real estate considerations), I slowly add on to that body of knowledge. (And ideally, the practical application of the knowledge helps me actually retain some of it.) Personally, plain 'ol Google has been my best friend in this process, linking to sites like "Investopedia". I have also been drawn to certain financial/investing bloggers who write about strategy. 

With that lengthy intro... I generally follow this blogger's philosophy on investing: How to Make Money in the Stock Market (Mr Money Mustache Blog Link)
This link will probably be a decent read and point to a few other useful resources (Like "A Random Walk Down Wall Street").

My own personal  main takeaway from research/personal philosophy on investing is:
1. There are people that do this ALL DAY, as their FULL TIME JOB, and they do not consistently beat the market.
2. I am not as smart as these people, and do not really want to spend all day trying to figure out what companies are "winners". Therefore.
3. I will not try to beat the market, I will try to match it, and keep my fees as low as possible.

 Good luck! 

 

[mudpuppy]

Take a look at Stocks for the Long Run by Jeremy Siegel.  If you really want to get into the details, read The Intelligent Investor by Benjamin Graham

 

[aog]

The Wealthy Barber, by David Chilton (https://en.wikipedia.org/wiki/The_Wealthy_Barber) is an educational novel with the basic basics of financial planning.  I read it in high school, so it may be lower level than you are looking for.

 

[Road Guy]

Weve stuck to a more boring investment strategy with our 401K, larger portion in the S&P 500. it takes a while but with patience and time it really takes off.

Weve always done our own through basic research, I dont think anyone really needs a "guy/gal" to steal your profits (the government does enough of that), I mean "manage" your account. 

I dont have any books to recommend, I just try and do some basic research and stay away from companies that have lots of debt.  But all those ratios the finance people try and sell are failry worthless in terms of trying to determine the future value of a stock price.

But its crazy.  I got semi-free stock when I worked at Home Depot 25 years ago and held onto it and sometimes I think wow, that little bit of money just sat there and is now a decent number.

I also bought Delta stock after 911 that I later sold for a loss. Ive tried to stay away from airlines. its hard for them to make money even when its not a terrorist season / pandemic /etc..

 

[kevo_55]

Just invest in EB.com. You can't loose!!

 

[Road Guy]

yes I will make you a deal today!

 

[bwin12]

I also bought Delta stock after 911 that I later sold for a loss. Ive tried to stay away from airlines. its hard for them to make money even when its not a terrorist season / pandemic /etc..

This is ultimately what prompted me to ask for a recommendation/education. I had some cash in my brokerage account that was just sitting there. I bought $5k of Boeing stock a month ago with the logic of 1) Covid means planes are not selling, 2) the MAX should be available soon, or at the same time people would be more comfortable flying again. Currently, the stock has gone up 27%. Should I sell? Should I hold? Should I buy more? I have no idea, the only thing I know is I have an unrealized gain of $2,200 (I am pretty sure I used unrealized correctly). Same thing with $4k worth of Southwest, though it only went up 15%. 

So that turned into "do I sell some of these mutual funds that were bought when I set up this account that are only losing?" And "should I buy retirement age target funds?" but I got a booklet in the mail titled "IMPORTANT INFORMATION Including Changes Regarding Your Insperity 401(k) Plan" and see that target funds have a much lower return that mid cap stocks. 

I just ordered Stocks for the Long Run, but I will check out the other books recommended and websites. I will teach my kids this crap to, because clearly it is not part of our education system. My parents primarily invest in land, so they are kind of not helpful. 

The market seems to be going crazy: Covid, election, technology, etc. But I realize probably anyone can make money right now. 

 

[Roarbark]

This is ultimately what prompted me to ask for a recommendation/education. I had some cash in my brokerage account that was just sitting there. I bought $5k of Boeing stock a month ago with the logic of 1) Covid means planes are not selling, 2) the MAX should be available soon, or at the same time people would be more comfortable flying again. Currently, the stock has gone up 27%. Should I sell? Should I hold? Should I buy more? I have no idea, the only thing I know is I have an unrealized gain of $2,200 (I am pretty sure I used unrealized correctly). Same thing with $4k worth of Southwest, though it only went up 15%. 

So that turned into "do I sell some of these mutual funds that were bought when I set up this account that are only losing?" And "should I buy retirement age target funds?" but I got a booklet in the mail titled "IMPORTANT INFORMATION Including Changes Regarding Your Insperity 401(k) Plan" and see that target funds have a much lower return that mid cap stocks. 

I just ordered Stocks for the Long Run, but I will check out the other books recommended and websites. I will teach my kids this crap to, because clearly it is not part of our education system. My parents primarily invest in land, so they are kind of not helpful. 

The market seems to be going crazy: Covid, election, technology, etc. But I realize probably anyone can make money right now. 

Here's an additional resource on "Timing the Market", an issue you're grappling with above. 

Timing the Market: The Absolute Worst vs Absolute Best vs Slow and Steady
https://imgur.com/gallery/BlK4jzM

The graphic talks about an index fund (e.g. @Road Guy's beloved S&P500), but the principle holds (even more-so, perhaps) for individual stocks like Boeing. Frankly it's hard (and probably a matter of luck for us) to time the market twice (know when to buy, and when to sell.)

The almighty *Data* says buying early, often, and consistently is a better strategy than waiting for market crashes to buy and peaks to sell (even IF you knew the future and could pinpoint when the peaks and troughs were).

 

[Road Guy]

If you are not looking to hang for the long term then I would use the same rules I follow when playing craps, if I ever end up  close to 50% "winnings" I pack it up. But ive never really looked too much into short tem investing- I have lots of friends that do the shorter game (less than a year) and most seem to do about as well as I do playing craps (but I do love playing craps!)

But Ive tried to follow the advice my grandfather used- when he got back from WW II my grandmother was mad he was investing in some sugar drink known as The Coca Cola Company.  Although they are relatively flat, they split so many times over the years and even though he helped start a ME Company way back in the day he didnt really have a retirement plan at work, but he told me he made enough on Coke Stock alone to live off the dividend checks, for a while..  Ive actually still got a decent chunk that he gave me for birthday gifts and such ( from middle school / high school days)

He tended to buy things like Railroads, GE, J&J, later Home Depot, etc and while those routes have a longer pay off they do tend to pay off. Thats what I have tried to do as well.

In that graphic it does show the market always goes up (eventually) weve been running the slow and steady plan for 20 something years, it didnt really start to really add up for us until about year 15.

 

[snickerd3]

we try to avoid short term stocks, IL has a killer tax rate of 25% on everything sold that was held for less than a year.  We aren't quite savvy enough to make the tax slaughter worth the effort.  We have gotten burned on some oil and gas things, but longer term is where most of ours is or things that pay healthy dividends.  disney, verizon, etc.  We invested in Netflix at the right time.  We cashed out the initial investment and everything now is strictly profit.  

 

[snickerd3]

A good college friend's college education was paid for by her grandma's keen investment in a young man named John Deere.

 

[Road Guy]

I invested $100 in etoys.com back when the stock price went to 0.00000001 - I figured even if it came back to $1.00 a share I would be up. And well lets just say I wasnt up!

 

[bwin12]

we try to avoid short term stocks,

I am only doing this in my brokerage account, so if I make anything I am still not seeing it until I am 65. The short term stuff is limited to Blackhawk (I will check the craps table for @Road Guy) and that damn Fanduel Sports betting app in my phone. 

Everyone always talks about putting in as much as you can when you're younger, which I wholeheartedly agree with. I guess I am struggling with maximizing the return. I should probably quit while I am ahead... 

But if anyone has any hot stock tips throw them up here... 

 

[Violator]

The 737 Max got the FAA approval today so maybe Boeing will rebound.

I think I trust the vaccine more to be honest though 

 

[bwin12]

Agreed. 

They also landed a large defense (I'm pretty sure) contract last week, and they get a big boost when favorable vaccine news comes out. 

Halfway trough the day the stock price started falling. I assume because people still are not flying...

If I have learned anything with this endeavor- the stock market is weird. 

 

[pbrme]

Anyone watching the GME/Reddit explosion?

 

[envirotex]

Anyone watching the GME/Reddit explosion?

TO THE MOON!!!

 

[Roarbark]

WSB is sorcery, but those sure are some gorgeous green numbers.

 

[Supe]

I think the one guys investment was up to what, $20M plus? I'd have to cave at that point regardless of Reddit principles. I'm offloading at least half of that, buying a million dollar home, and living off some interest/dividends for a while.