Investing

Read books and websites about investing before you invest. The way you phrased your question makes me think you might need to learn the ins and outs before you make your decision.

I use TDWaterhouse for taxable investments and have an old 401k with Vanguard and my current 401k with Fidelity.

If you're talking about investing in stocks and mutual funds, look into how much you want to invest compared with things like commissions. Is availability of mutual funds important to you? Do you want to do options? blah blah blah... learn before you plop down money.

 

If you're a newbie, do some experiments first to see how you do with real money. Buying stocks (which I assume you're doing, and not just giving the money to some stranger to invest for you) is a lot like gambling, you need to know when to quit (sell).

Myself I use ScottTrade since they charge the lowest commission

p.s. Stay away from any Chinese stocks. They're unstable as hell

 

First, What company, do you use to invest your money?

Are you looking for a broker dealer? Like Fidelity?

Are you looking for a someone to invest your money for you?

 

I use Morgan Stanley, but it is more about the broker than the company.

I was with him at UBS, and he switched to Morgan Stanley and me and my money switched with him.

He has consistently picked winners, and right now he has me in 2 developing market funds that are absolutely KILLING.

DD

 

Just look around and find the brokerage firm and broker that you think is best for your tastes. Some are more conservative and some are bigger risk takers with potential for higher rewards. Depends on your personal taste for that type of thing.

The most important thing is to diversify your money. You can do that by investing directly in companies that you research, (online services by companies like fidelity, etrade, morgan stanley, merril lynch, etc.. are really good tools) companies that your broker may recommend (i personally dont use one but some people really like to have one to consult), and finally mutual funds that diversify for you. There are other things like options and what not but I think you can figure that stuff out later.

 

DD, do you mind sharing the name of your broker? I hear advice like that all the time, and was wondering if you could provide the name.

 

I am no investment guru, but I can tell you the above statement is a myth. The safest investment is high-yield bonds. Mutual funds can be very volatile. If you decide to investment, you need to ask yourself some important questions such as 1) are you an aggressive or conservative type, 2) are you in the long term or short term, 3) if short term, how much time can you allocate daily to monitor the market. If you are in for long term, diversification is the golden rule.

 

Remember me in your will ...

The Coffeehouse Investor

FRANK ARMSTRONG'S INVESTMENT STRATEGIES FOR THE 21ST CENTURY

http://www.radicalguides.com/

http://www.ifa.com/

The Coffee House investor portfolio is

40 percent Vanguard Total Bond Index (ticker: VBMFX)
10 percent Vanguard Index 500 (VFINX)
10 percent Vanguard Large Cap Value (VIVAX)
10 percent Vanguard Small Cap (NAESX)
10 percent Vanguard Small Cap Value (VISVX)
10 percent Vanguard International (VGTSX)
10 percent Vanguard REIT (VGSIX)

which is a fine place to start. That is 7 funds, each with a $3K minimum (I am guessing here), so that might be priced out of your ballpark. You could pick a balanced fund (Vanguard has those too) or you could buy ETFs (Vanguard calls theirs VIPERs) if you have less than $21k to start.

By following the coffe house strategy you beat 90% of the investors with little or no stress.

 

High yield bonds? Given the context of your statement I'm going to assume you weren't trying to be sarcastic. High yield bonds are far from the "safest" investment.

 

Just remember....

(Are you listening TJ?)

Psychopaths Make the Best Investors, Research Shows (Update1)


Sept. 19 (Bloomberg) -- ``Functional psychopaths'' make the best investment decisions because they can't experience emotions such as fear, a study by researchers at Stanford Graduate School of Business showed.

Fear stops people from taking even logical risks, meaning those who have suffered damage to areas of the brain affecting emotions, and can suppress feeling, make better decisions, the report showed. The ability to control emotion helps performance in business and the financial markets, the researchers found.

``Many CEOs and many top lawyers might also share this trait,'' Antoine Bechara, a professor of neurology of the University of Iowa, said in a statement on the Stanford Graduate School of Business Web site. The study was carried out by Stanford, Carnegie Mellon University and the University of Iowa.

The 41 participants in the study were given $20 to play a gambling game. At the beginning of every round, they had to decide whether to risk a $1 stake on a toss of the coin, for a $2.50 return if they won. While any player could decline to take part in a round, the financially ``logical'' approach to the game was to participate at each stage because the ``potential return'' outweighed the risk of loss, according to the research.

Fifteen of the players had suffered damage to the areas of the brain that affect emotions. They finished on average $3 richer than the others and invested in 84 percent of the rounds, compared with 58 percent played by the rest, who let ``fear'' govern their decisions, the study showed.

`Premium Puzzle'

The researchers used ``control'' players, who had brain lesions in areas that aren't involved with emotions, to aid the study's precision. Those patients behaved similarly to the ``normal'' participants.

The results help to explain the ``equity premium puzzle,'' or why more people invest in bonds than stocks, when equities historically offer a higher average return, the report said.

``Investors are not behaving in their own best financial interest,'' co-author Baba Shiv of the Stanford Graduate School of Business said. ``All research suggests that, even after taking into account fluctuations in the market, overall people are better off investing in stocks in the long term.''

Many successful investors may be so-called ``functional psychopaths'' because they lack or can suppress emotions, according to the study.

Still, Shiv said emotions aren't all bad. Those who can't experience feelings tend to make ``disadvantageous'' social decisions, losing their jobs and their friends, the report said.

The study was published in the journal Psychological Science in June, according to the statement on the Web site. The Times of London today reported the findings.

http://www.bloomberg.com/apps/news?pid=10000103&sid=awwkzNbi2cBE

 

I use Duke & Duke Commodities Brokers

 

High yield bonds are aka JUNK bonds. MId-term investment grade corporate and government notes are safer. Bond market for the return on long term bonds is currently not matching reward with return; i.e. there is little or no return premium for buying a 30 yr bond versus a 10 yr bond (or note).

The "safest" investment strategy is to hold a full diversified, multi-asset portfolio, like the Coffee House Portfolio that I mentioned above. You basically do not put all of your eggs into one basket.

Bonds may appear to be safe but they are susceptible to inflation. Stocks and real estate are more inflation proof. If you read about asset allocation, you will even see how adding 10 % stock position to a portfolio of bonds actually has the same return but lower risk. I recommend reading _The Intelligent Asset Allocator_.

This is very good advice. One must always start with a goal in mind, or any path will do.

 

Read magazines related to investing. Read websites like moneycentral.com, cbs.marketwatch.com, bloomberg.com, etc. to get ideas about what's hot, what's not, and what's a safe ride. Microsoft's moneycentral.com site has a hell of a screening tool that can help you narrow your choices down whether it be funds or stocks you're looking for.

 

From what you posted earlier, it sounds like you should use Vanguard or similar large mutual fund company. Starting out, you should probably invest in broad based mutal funds, S&P, etc to get a feel for how "investing" works. To research various funds, you can check out Morningstar, BusinessWeek usually has a funds issue every quarter or so, the Journal has a funds section one Monday per month/2 months.

I would say to invest in broad based funds for 1-2 years minimum while you're researching/learning about markets. It would probably be hard to get a good feel on analyzing different funds strategies other than looking at past performance results.

Another option would be to go with a full-service broker(Merrill, Morgan Stanley, UBS,etc.). Downside here is its more expensive, upside is someone does most of the legwork for you. If you're just starting out, its probably a better idea to just invest with a Vanguard,etc.

 

Yep, that was an idiotic claim by me. I was actully thinking something else when I typed it. Thanks to nycrocket and No Worries for pointing it out.

 

I definitely don't recommend it for first-timers, but I use InteractiveBrokers, and I trade strictly public stock options. Extremely risky, extremely short-term, but also potentially extremely profitable. (InteractiveBrokers charges $1 commision, which is definitely the lowest you'll ever find)

That said, get some experience elsewhere first.

 

Fidelity is another mutual fund company like Vanguard that has a large array of funds to chose from. A plus for Fidelity is that they have offices in Houston.

 

I should say that I also have a more conservative Roth IRA, which is totally the way to go if you're looking to save up some retirement money. I use IDEX (Transamerica) personally, because I have found that it has performed very well over a sustained period of time.

http://www.idexfunds.com/site3/;jsessionid=ETSMOYBC3BGEVIT1MT3SCUVCPNSPUHKS?_requestid=79999