Investing 102

[hifi875]

been pondering my next move. got my statement on one of my investments the other day and wow it made me 10% in one month. i was like, this is awesome, then i remembered it lost about 5% the previous month. oh well. glad i don't need it now. want to buy some more stock, just trying to figure out what.

[GregWeld]

Originally Posted by hifi875

been pondering my next move. got my statement on one of my investments the other day and wow it made me 10% in one month. i was like, this is awesome, then i remembered it lost about 5% the previous month. oh well. glad i don't need it now. want to buy some more stock, just trying to figure out what.

Investing is like that -- it's not a straight line up -- it's a two steps up - one step back - one step up three steps back but that's why I always ask you guys to go back - when in doubt - and look at the charts (3 and 5 years) and see what that tells you....

The average is about 11% a YEAR.... so to go up 10% in a month means you're going to get clubbed somewhere along the line. Trust me - it's REAL REAL hard to beat those "averages". There are pros on Wall Street that get paid millions per year to try to do that and most don't!

[Bucketlist2012]

Originally Posted by GregWeld

Investing is like that -- it's not a straight line up -- it's a two steps up - one step back - one step up three steps back but that's why I always ask you guys to go back - when in doubt - and look at the charts (3 and 5 years) and see what that tells you....

The average is about 11% a YEAR.... so to go up 10% in a month means you're going to get clubbed somewhere along the line. Trust me - it's REAL REAL hard to beat those "averages". There are pros on Wall Street that get paid millions per year to try to do that and most don't!

Last year was a true test of staying the course...400 and 500 point swings..

several days of drops... but in the end, where are we ? Up and dividends got paid..

I think it again is TIME and the gains over time because you picked the better or best...

i certainly don't pick the asset with the worst 3 or 5 year average...And by picking the one with the better average, even when you take big hits, you still come out on top..In fact, buy more when things have a correction.

7 to 10% is a lot ,once you have enough working for you.

[GregWeld]

Totally agree with you .... and that dividend being paid is what carries you over the lows... that cash just keeps going ka-ching!

EEEEEEEEEHHHHHHHAAAAAAA

[Bucketlist2012]

Originally Posted by GregWeld

Totally agree with you .... and that dividend being paid is what carries you over the lows... that cash just keeps going ka-ching!

EEEEEEEEEHHHHHHHAAAAAAA

Yes Sir...And You are right on not being too invested in one area..

I try to be ready to weather the downs and also keep enough liquid assets, not cash, to buy at those depressed times. I believe that as in 2008, I am not in a panic position to need to sell..Money management in personal life really helps..

I could have made a lot more money in the last few years, but I wanted to just keep the income stream going rather than swing for the fence..

Hindsight says it was the best move, and not buying dirt in the mid 2000's , turns out to be genius..

[Flash68]

I've used this thread to get my IRA back on track with a diversified allocation -- some income, a good chunk of growth and some speculative stocks (a couple biotechs).

And I've enjoyed getting back into this and spending quality time each day researching and reading. I forgot how much I enjoy it. These damn car forums pull me away from these essentials too much sometimes.

Originally Posted by GregWeld

To take a quote from a great movie --- "big mistake! HUGE!"

Pretty Woman?

[GregWeld]

^^^^^^^^ Winner!!


I'm still in Texass boys! 4 days here for one day of running in the rain... but off to Phoenix this afternoon...

[ErikLS2]

Originally Posted by GregWeld

The average is about 11% a YEAR.... so to go up 10% in a month means you're going to get clubbed somewhere along the line. Trust me - it's REAL REAL hard to beat those "averages". There are pros on Wall Street that get paid millions per year to try to do that and most don't!

This is a very imporant point Greg and one I don't think has been brought up in here yet. I'm wondering if you regularly compare your portfolio to some sort of benchmark, be it the Dow, S&P, or other various indexes? I always think it's good to know if all the research one puts into buying individual stocks pays off over just buying an index ETF for a corresponding industry.

[GregWeld]

Originally Posted by ErikLS2

This is a very imporant point Greg and one I don't think has been brought up in here yet. I'm wondering if you regularly compare your portfolio to some sort of benchmark, be it the Dow, S&P, or other various indexes? I always think it's good to know if all the research one puts into buying individual stocks pays off over just buying an index ETF for a corresponding industry.

Erik --

I think that's been my point of this entire thread --- i.e., it really doesn't take that much "research" to find 20 great stocks to own... it takes a matter of a few minutes really -- particularly if you stick to best of breed stocks and then just diversify to cover different sectors. Investing is really really simple. A guy can try to make it complicated and onerous but then he'd be a stock broker!

The point of exposing my own holdings etc has been to show that if it works for someone with millions to invest - it certainly should work for those with slightly less.

[MoparCar]

Again what an awesome real life thread. It's inspired me to do a lot of research and learning. I think I'm spending as much time researching stocks and investments (if not more) than cars right now. As mentioned before, this really should be taught in high school and by every parent. What a difference in life it could make.

Any chance the mods can update the sticky PDF on the first page periodically to list all the pages? This thing has grown substantially since the last PDF.

Wes