Finance/Investing ITT

[nando]

I never said you have to start with a lot to grow your wealth. I'm just saying you won't be making much at first. And it might not turn into anything. Of course you can keep making small amounts and wait for it to add up, then invest in something else.

It's not the little bit at a time that matters, it's the little bit at a time compounded over 30+ years that is so powerful. You don't have to make huge amounts overnight; it's the get rich quick mentality that gets people into trouble. The rewards more than outweight the risks in the long term, and seeing how most people here are less than 25, they're the ones who can benefit the most. There are no gaurantees in anything, otherwise you couldn't make any money out of it. You could get shot tomorrow and die. Better not go outside I guess?

Of course it doesn't beat the stock market. It also doesn't have the risk of the stock market. And you get a house out of it. Which you can probably sell later and buy a similar house and have enough left over for a car thingy.

are you really saying there's no risk in real estate, after the huge bubble that just imploded? Even regular people who didn't over extend themseves are faced with owing more than their house is worth. they are expecting 48% of home owners will have negative equity in a year or two. That seems like risk to me. 80% of sub prime borrowers will have greater than 10% negative equity. Nobody with a brain would continue to make payments in that situation, even if they could.

it's not even that it doesn't beat it, it doesn't really make you anything. Yes, you should buy to have a place to live. That makes sense, you have to live somewhere and why pay somebody else's mortgage for them. But you aren't going to be able to retire based on built up equity in your home, unless you get extremely lucky.

Buying when things are low is good, except if the company goes out of business. So basically your options are to have a little more risk right now, or to make very low returns. Both options suck if you ask me.

so don't buy junk. There are tens of thousands of high quality companies that pay dividends with solid balance sheets that you can own. Buying Citi or Ford for $1 a share was risky, but how likely do you think it is that wal mart, mcdonalds or intel will go bankrupt in the near future?

And if you think 50% return overall in 5 months is low, I don't know what else to tell you. Even with the highest quality "low return" stocks you could have made an easy 10-20% just because people were selling more out of fear than because the underlying value of their stocks were low. And that doesn't even count dividends.

[Surtr]

no you don't, lol. if you think you have to start with a lot of money to grow your wealth you will always be poor.

I never said you have to start with a lot to grow your wealth. I'm just saying you won't be making much at first. And it might not turn into anything. Of course you can keep making small amounts and wait for it to add up, then invest in something else.

housing is still going to fall further.. historically, housing only returns about 7% a year. Except you're paying interest over that period, and inflation is about 3%. So in the end you basically break even. You buy a house because you have to live somewhere, to diversify your assets, or even to rent out, but not because the investment return beats the stock market. You'd be better off with an all bond porfolio.

Of course it doesn't beat the stock market. It also doesn't have the risk of the stock market. And you get a house out of it. Which you can probably sell later and buy a similar house and have enough left over for a car thingy.

Now is the BEST time to invest. I feel bad for anyone who's missed out on the 50% run from march because they were afraid.

Buying when things are low is good, except if the company goes out of business. So basically your options are to have a little more risk right now, or to make very low returns. Both options suck if you ask me.

[87e30]

I wanted to get into this. Then I bought a motor swap. Fuck.

When I have cash I'm getting my ass into this.

Interesting thread.

[Alkasquawlik]

why wait for it to come back? you will just miss most of the rally. actually it's already been mostly missed. Waiting for a pullback right now.

I'm not waiting, my statement was more geared towards getting a job in finance once I'm out of school.

I get paid on Friday, and I will be opening a Scottrade account. Only reason I haven't already is because I have no cash flow right now. Gas and food are killing me.

[nando]

why wait for it to come back? you will just miss most of the rally. actually it's already been mostly missed. Waiting for a pullback right now.

[Alkasquawlik]

I'm hoping by the time I'm out of college, the economy will be back in an upswing and I can hop on.

A friend of mine started investing in June this year with $500, and as of today, he has made over $6k. That fuck. I need to hop in, I want an E46 M3.

I'm not ignorant, and know there is a ton of risk involved, but I'm young and willing to take some chances.

[nando]

Buy a house. Then sell it when the market comes back up. When I was your age I was totally stoked about getting into the stock market. The problem with the stock market is you have to have quite a bit of money (and be willing to lose it all) to make a good return. And even when you know what you're doing, there's still a certain amount of luck involved. I've since lost interest.

http://www.getrichslowly.org/blog/

Investing kinda sucks dick right now. If that's what you want to do with your life, I hope it gets better by the time you're ready.

no you don't, lol. if you think you have to start with a lot of money to grow your wealth you will always be poor.

housing is still going to fall further.. historically, housing only returns about 7% a year. Except you're paying interest over that period, and inflation is about 3%. So in the end you basically break even. You buy a house because you have to live somewhere, to diversify your assets, or even to rent out, but not because the investment return beats the stock market. You'd be better off with an all bond porfolio.

Now is the BEST time to invest. I feel bad for anyone who's missed out on the 50% run from march because they were afraid.

[Surtr]

Buy a house. Then sell it when the market comes back up. When I was your age I was totally stoked about getting into the stock market. The problem with the stock market is you have to have quite a bit of money (and be willing to lose it all) to make a good return. And even when you know what you're doing, there's still a certain amount of luck involved. I've since lost interest.

http://www.getrichslowly.org/blog/

Investing kinda sucks dick right now. If that's what you want to do with your life, I hope it gets better by the time you're ready.

[Alkasquawlik]

anyone need or want a Scottrade account please pm me. I recommend someone we both will get 3 free trades. Not much but hey.

I'll take you up on this in a week or so.

I heard ZENG is about to take off today.

[nmlss2006]

They had a lot of their own company invested in those high yielding sub prime funds and they took a bath. I am not going to invest my money in a company that is not stable. E-trade being one of them.

As I thought, then. I would perhaps advise you to doublecheck the above, by the by. But I'll stop here.

[Vedubin01]

...dark past? No, I would not recommend etrade either, but because they're expensive. What dark past?

They had a lot of their own company invested in those high yielding sub prime funds and they took a bath. I am not going to invest my money in a company that is not stable. E-trade being one of them.


As for the banking stocks.

Ive been watching FAS since it was in the low teens, today its sitting at or around $77 per. 52 week high was $293+. I have some free cash and thinking of trying to pick up about 50 shares and ride whats left of this banking run. Im just looking for a pull back. Stock is up $7 today alone.

[nmlss2006]

E-trade has a dark past. Stick with something solid. Scottrade will allow you to start an account with only $500 and with $7 trades.

...dark past? No, I would not recommend etrade either, but because they're expensive. What dark past?

[Saul325is]

That's neat. Thanks for the link.

No problem! I actually made a huge return with that game in Spring of 2008 when Apple, Visa, and Halliburton sky rocketed...too bad I didnt invest real money :(

[John Rocker]

I picked up GE when it was at 9 and today its sitting at 14. Up until this last rounds of dividends GE paid out around 10%. Not that bad of an investment. The GE Finance is whats holding them back. But as banks recoup so will GE Finance.

Thats a nice take. That would be a good trade to hold onto. My strategy has been to buy bank shares cheap, keep buying, wait for TARP to be paid off, then dividends will rise above the $.01 dividend cap. Im taking some off the table though at the moment because the BKX (bank index) has taken a pretty sharp run-up within the last 2 weeks. Some people I know are going purely cash right now, expecting a downturn.

Has worked thus far, Im assuming the same strategy can be used with GE, minus the whole dividend cap thing (unless they received TARP funds).

[John Rocker]

Stick with Scottrade. Nice platform, maybe not the best (I have not tried others), but lots of good tools. If you are starting small, you dont want to go with a bigger brokerage and get fucked with $15+ per trade, etc. $7 is the cheapest of the big boys. Ive seen other places offer $1 or $3.50 per trade, but they are brokerages I would never deal with. If you are daytrading on a small amount, a round trip (buy, then quick sell) is going to cost you $14 at scottrade, maybe $30 somewhere else. Do that a few times and it really starts to errode your takehome profit. Then after taxes your gain may be close to zero. Cheaper trades are better.

That and you can go into a Scottrade office near you and talk to a live body. Most brokers there have helped me out with stuff at no charge.