Investing 102

[Vince@Meanstreets]

Originally Posted by GregWeld

Think about it this way.... Catch a man a fish - or teach him how to fish...

was he asking what stream you like or what fish taste the best?

[barrrf]

Originally Posted by GregWeld

Think about it this way.... Catch a man a fish - or teach him how to fish...

That's a fine way to put it!

What about the guys that day trade for fun? I mean there is The Street, Motley Fool, ect........but it would be cool to hear some thoughts or get speculation from car guys, not from stiffs in suits.

I don't know - prolly

[Code510]

Originally Posted by GregWeld

This has been covered here many times --- and there's really no right answer except to use a "discount broker". Brokerage fees can, and do, affect your returns... so you want to keep those costs low.

Personally I use several - but for different reasons. Some investments I need help with - some I don't. For me personally - I don't want to have too much at any one company - so I spread it around to reduce risk.

But the point is - if you're comfortable with the website - and or just like a particular company - then go with that one. Investing is more about putting money away - INVESTING (not gambling) and reaping the rewards over time.

When you feel you have some time -- go to page one and start reading... it will help you overall and that's what this thread has tried to be about. Not WHAT to do but WHAT TO THINK ABOUT AND WHY....

I do realize that my question was kind of like "What's the best shade of blue?" haha.

That is really smart though, putting your money across multiple channels. For me personally, I have a house and its currently being rented out. For the last two years, that has been my "retirement" fund. I'd actually like to get more houses and rent them out, as I like tangible assets.

On top of that, I've been focusing on becoming debt free. I'm getting close to that(minus the mortgage payments). Now that I have some extra money available, I'd like to start investing some of that into some sort of Roth IRA.

I'll have to start reading all these pages and teaching myself.

[GregWeld]

Originally Posted by barrrf

That's a fine way to put it!

What about the guys that day trade for fun? I mean there is The Street, Motley Fool, ect........but it would be cool to hear some thoughts or get speculation from car guys, not from stiffs in suits.

I don't know - prolly

See -- the thread title is INVESTING 102.... if you go back and read from the beginning you'd see why it's called that... and not GAMBLING 101


Jokers and fools day trade... rich guys get rich because they INVEST.... there is a magnitude of order of difference. If you want to - you can start a Day Trading thread and I'm sure you'd get some followers and plenty of discussion on that topic.

[Vince@Meanstreets]

What Greg is trying to say is you have to understand the tools you are using to get the results that you want.

I don't know anyone that trades for fun. It's about investing and collecting a pay check when you are retired.

Read the thread and you'll soon get the point around page 275.

The tools and advice are there you just have to use them to make the choice of what suites your needs.

[WSSix]

Originally Posted by Code510

I do realize that my question was kind of like "What's the best shade of blue?" haha.

That is really smart though, putting your money across multiple channels. For me personally, I have a house and its currently being rented out. For the last two years, that has been my "retirement" fund. I'd actually like to get more houses and rent them out, as I like tangible assets.

On top of that, I've been focusing on becoming debt free. I'm getting close to that(minus the mortgage payments). Now that I have some extra money available, I'd like to start investing some of that into some sort of Roth IRA.

I'll have to start reading all these pages and teaching myself.

Welcome to the club. Good luck to you too. I have Vanguard for my Roth and Fidelity for company match 401k. I prefer the way Fidelity has their website laid out. I know Greg has said he likes his Schwab account and the tools available to him on the website. So you might want to check out the different company's websites and see which one you like best. The various discount brokerage houses are or should offer Roth IRA accounts with low costs. You can choose your own stocks like I have done or put it into a targeted retirement account which will adjust the risk level through the years as you near retirement age. There's a lot out there so be sure to read and ask questions. You'll quickly learn what you're interested in and what your risk level is going forward. This will help you concentrate on what matters and help keep you from being overwhelmed as the options.

[barrrf]

MMmkay then............I guess back to Investing 102

Question about diversity (just searched and found that Greg likes to be as diverse as possible and like 8 segments). Im in 5 different segements - is that enough? Its the bulk of the paltry $100k I have put away since starting work 10 years ago.

Banking
Energy (solar)
Tech
Industrial (Aerospace Mfg)
Shipping (Rail - not sure if this the right category though)

Looks good? Thoughts on those sectors?

[GregWeld]

Originally Posted by barrrf

MMmkay then............I guess back to Investing 102

Question about diversity (just searched and found that Greg likes to be as diverse as possible and like 8 segments). Im in 5 different segements - is that enough? Its the bulk of the paltry $100k I have put away since starting work 10 years ago.

Banking
Energy (solar)
Tech
Industrial (Aerospace Mfg)
Shipping (Rail - not sure if this the right category though)

Looks good? Thoughts on those sectors?

There is no way to always follow every "rule" -- which really should be thought of as "guide lines" rather than rules...

Owning 5 different sectors is excellent overall.

But what's really important -- is which names you own in each sector.... Do they pay you to own them (do they pay a dividend)?.... and what's the name you own TOTAL RETURN over a longer period of time (5 and 10 years) as compared to the other companies in that sector (in other words - their competitors).

Doing this research yourself -- gets you involved in understanding the possibilities and can affirm (or not - LOL) why you are invested in them.

Investing is about MAKING MONEY.... and MAKING MONEY LONG TERM. So take a look at every name you're invested in - and look at PERCENTAGES more than dollar amounts -- because you can directly compare percentages. Obviously 10% is better than 2% -- but you might have a gain of $10,000 on the 2% earner.... and only a gain of $1,000 in the 10% earner. Obviously you'd be way farther ahead having that reversed!

But what you're really looking for is the TOTAL RETURN on your investments. That's the ultimate metric. That's a combination of the dividend (if any) and the growth of capital. It doesn't make any difference where that total return comes from - as long as it compares favorably to what else you could have invested in.


Just looking at Bank of America (BAC) vs Wells Fargo Bank (WFC) over the last 5 years ---


Total return for BAC -- 33.7%


Total return for WFC -- 131.7%


So both are "Financials" --- one more than doubled your money in 5 years -- one only added a 1/3rd


There is no better comparison than TOTAL RETURN on your investment IMHO. You need to look at everything you own and make these kinds of comparisons and see how your's stack up. Sometimes it's a real eye opener.

[barrrf]

Greg, thanks for all of your input over the last few years here.

How did you get so knowledgeable? Just years of experience and paying attention and learning what the numbers mean?

[GregWeld]

Originally Posted by barrrf

Greg, thanks for all of your input over the last few years here.

How did you get so knowledgeable? Just years of experience and paying attention and learning what the numbers mean?

I have been managing large sums of money for 30 years... and yes... experience is sometimes the best teacher. And yes -- I once day traded for a number of years. That experience will only teach you how to pay the maximum income tax... and how NOT to become wealthy.