Author Topic: New To Investing Thread  (Read 327239 times)

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Offline scottwildcat

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Re: New To Investing Thread
« Reply #175 on: April 16, 2013, 10:01:14 PM »
My advisor has averaged close to 10% for 3 years, is this a ponzi?

Two years ago, maybe....now, not unlikely.  Cash out, and buy an S&P index fund.  Pay super low (next to none) fees, and "match" the market every year.  Retire happy and play botche ball with me and drink little old man beers.

Pete gets it.

Offline GoodForAnother

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Re: New To Investing Thread
« Reply #176 on: April 16, 2013, 10:04:45 PM »
my 401 is in a vanguard target fund, vfifx. it's done really well for me, especially over the last year (13.44%).
emaw

Offline Dugout DickStone

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Re: New To Investing Thread
« Reply #177 on: April 16, 2013, 10:05:40 PM »
My advisor has averaged close to 10% for 3 years, is this a ponzi?

Two years ago, maybe....now, not unlikely.  Cash out, and buy an S&P index fund.  Pay super low (next to none) fees, and "match" the market every year.  Retire happy and play botche ball with me and drink little old man beers.

New question, how do I maximize my safe harbor  match?

Offline sys

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Re: New To Investing Thread
« Reply #178 on: April 16, 2013, 10:08:04 PM »
also, someone rename this thread as personal finance for recent grads and start an investment thread.  in that thread, someone explain bonds to me.  not like i'm a six year old, like i'm really smart.

Bonds, or bond funds?  Very different.

Lot of people who just buy bonds look at "par" values and rates of return and that stuff, but that's missing the point.

Bond fund mangers focus on what they call "credit tear downs."   They focus all of their energy on trying to figure out if a given debtor can pay their bills.  Their goal is to find firms who are regarded as credit risks by the general public, but who actually have the cash/assets to pay their bills and service their debt.

So, if you want to really understand bonds, you need to under stand balance sheets and credit tear downs....just like the bond fund guys do.

bond funds.  i'm pretty overconfident, but not so much that i'm going to invest in distressed credit by myself.
"experienced commanders will simply be smeared and will actually go to the meat."

Offline Dugout DickStone

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Re: New To Investing Thread
« Reply #179 on: April 16, 2013, 10:14:54 PM »
Lots of investing iq here, glad I pay someone to do this for me.

Offline Pete

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Re: New To Investing Thread
« Reply #180 on: April 16, 2013, 10:17:30 PM »
My advisor has averaged close to 10% for 3 years, is this a ponzi?

Two years ago, maybe....now, not unlikely.  Cash out, and buy an S&P index fund.  Pay super low (next to none) fees, and "match" the market every year.  Retire happy and play botche ball with me and drink little old man beers.

New question, how do I maximize my safe harbor  match?

I can't help you on that one.

However, to reiterate my belief in index funds, the smartest guy I have ever met told me that the worst thing that his finance/accounting people could do was to try and make him richer...instead just match the market at super low fees.  He said he'll focus on getting rich on doing what he knows how to do (focusing on his occupation).

A mutual friend of LSOC and I who now owns a private equity fund was once a HUGE disciple of John Bogle, founder of Vangaurd who wrote "Truth about Mutual Funds." http://www.amazon.com/Bogle-Mutual-Funds-Perspectives-Intelligent/dp/0440506824

This friend was ADAMANT that the best way to realize a healthy return was index funds..........


......but then, he decided to create his own fund.  He joined the other side....and he now reaps the rewards.


He interviewed for a Wall Street analyst job once, for an equity fund, and the portfolio manger told him that he decided to be a fund manger because he couldn't sing (couldn't be a rock star) and wasn't an athlete (couldn't play pro ball), so managing funds was the next most profitable gig.

Offline Pete

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Re: New To Investing Thread
« Reply #181 on: April 16, 2013, 10:21:06 PM »
also, someone rename this thread as personal finance for recent grads and start an investment thread.  in that thread, someone explain bonds to me.  not like i'm a six year old, like i'm really smart.

Bonds, or bond funds?  Very different.

Lot of people who just buy bonds look at "par" values and rates of return and that stuff, but that's missing the point.

Bond fund mangers focus on what they call "credit tear downs."   They focus all of their energy on trying to figure out if a given debtor can pay their bills.  Their goal is to find firms who are regarded as credit risks by the general public, but who actually have the cash/assets to pay their bills and service their debt.

So, if you want to really understand bonds, you need to under stand balance sheets and credit tear downs....just like the bond fund guys do.

bond funds.  i'm pretty overconfident, but not so much that i'm going to invest in distressed credit by myself.

Good.

Here is the catch.  You need to rule out the cowboys.  Most of them are cowboys. They all want to be the "smart" one who is the leader in finding the gems.  I worked for a mutual fund company for a time, in corporate accounting, so we saw all the blood and guts of what happened when those guys mumped up.

eff that.

Find the fund mangers who have the most consistent returns. 

Offline sys

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Re: New To Investing Thread
« Reply #182 on: April 16, 2013, 10:33:36 PM »
Find the fund mangers who have the most consistent returns.

i need more basic than that.  like why/when would i want to put money in bonds instead of stocks?  why are returns so variable if the underlying securities return fixed %s?  i just don't understand the whole market.
"experienced commanders will simply be smeared and will actually go to the meat."

Offline Rage Against the McKee

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Re: New To Investing Thread
« Reply #183 on: April 16, 2013, 10:39:30 PM »
I've always been told that bond prices rise when interest rates fall.

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Re: New To Investing Thread
« Reply #184 on: April 16, 2013, 10:40:03 PM »
I've always been told that bond prices rise when interest rates fall.

So if interest rates are at all time lows....
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Offline Rage Against the McKee

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Re: New To Investing Thread
« Reply #185 on: April 16, 2013, 10:41:41 PM »
I've always been told that bond prices rise when interest rates fall.

So if interest rates are at all time lows....

Yeah, seems like a bad investment, if true.

Offline michigancat

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Re: Re: New To Investing Thread
« Reply #186 on: April 16, 2013, 10:46:06 PM »
my 401 is in a vanguard target fund, vfifx. it's done really well for me, especially over the last year (13.44%).

I think my Roth is on the same fund, but i literally had no idea how it was performing until you posted that. I mean, I knew it was growing, but i had no idea on the percentage.

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #187 on: April 16, 2013, 10:49:19 PM »
All this big boy investment talk has my head spinning. Ben ji, you're not doing anything too. Crazy with my money right?
I think what my friend Mitch is trying to say is that true love is blind.

Offline kostakio

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Re: New To Investing Thread
« Reply #188 on: April 16, 2013, 10:51:47 PM »
Find the fund mangers who have the most consistent returns.

i need more basic than that.  like why/when would i want to put money in bonds instead of stocks?  why are returns so variable if the underlying securities return fixed %s?  i just don't understand the whole market.

Several things can impact the price of bonds but mostly they flucuate with the movement of interest rates and with the credit ratings of the companies that issued them.  A simplified rule of thumb is you want to be in bonds when interest rates are higher and in stocks when they are lower.   Bonds move the opposite direction of interest rates so now really isn't a good time to be in them because there is pretty much only one way for rates to move and that is up.  When that happens bond values will fall and already have started to in anticipation of this.  Low interest rate environments are generally good for stocks because the cost of capital is low and margins tend to be high.

Offline EMAWmeister

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Re: New To Investing Thread
« Reply #189 on: April 16, 2013, 10:52:32 PM »
Find the fund mangers who have the most consistent returns.

i need more basic than that.  like why/when would i want to put money in bonds instead of stocks? 

The nutshell answer is that investing in debt is safer than investing in equity. Worst case scenario, you recoup some of your original investment. Best case scenario you get a fairly low % of steady growth over the life of the bond.

Offline sys

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Re: New To Investing Thread
« Reply #190 on: April 16, 2013, 11:07:23 PM »
A simplified rule of thumb is you want to be in bonds when interest rates are higher and in stocks when they are lower.

i get that, but i think it is overly simplified.  some guys seem to make money (in bonds) in all markets.
"experienced commanders will simply be smeared and will actually go to the meat."

Offline Pete

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New To Investing Thread
« Reply #191 on: April 17, 2013, 06:57:06 AM »
A simplified rule of thumb is you want to be in bonds when interest rates are higher and in stocks when they are lower.

i get that, but i think it is overly simplified.  some guys seem to make money (in bonds) in all markets.

Again, it's all about the credit worthiness of the debtor.  They make money in all markets only when they can pay their bills.  Most bonds are a fixed percentage for the life of the bond, so you are guaranteed that return as long as the debtor doesn't go bankrupt.

If you don't need your money for quite a while, I wouldn't invest in bonds. 

Look at the historical returns.  Large cap equities are at around 10% since WW2, and bonds are maybe 6% or lower, IIRC.

I know I sound like a broken record, but buy an S&P index fund and sleep well.

Offline steve dave

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Re: New To Investing Thread
« Reply #192 on: April 17, 2013, 07:25:28 AM »
sddad is, like, a railroad gambler on commodities.

Offline steve dave

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Re: New To Investing Thread
« Reply #193 on: April 17, 2013, 07:26:15 AM »
also, Pete is like the most smart investment market understander guy I know.

Offline Emo EMAW

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Re: New To Investing Thread
« Reply #194 on: April 17, 2013, 08:19:32 AM »
For finance based calculations, what do you guys figure for rate of appreciation for residential real-estate in a upper middle class Johnson County neighborhood?

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Re: New To Investing Thread
« Reply #195 on: April 17, 2013, 08:26:21 AM »
For finance based calculations, what do you guys figure for rate of appreciation for residential real-estate in a upper middle class Johnson County neighborhood?

somewhere around 0%

Offline ben ji

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Re: New To Investing Thread
« Reply #196 on: April 17, 2013, 08:28:21 AM »
All this big boy investment talk has my head spinning. Ben ji, you're not doing anything too. Crazy with my money right?

Got a great opportunity now, you may need to double down on original investment. Will PM more deets.

Posted from my Fishing Yacht "Strung up and out" in The Cayman Islands

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #197 on: April 17, 2013, 08:40:49 AM »
All this big boy investment talk has my head spinning. Ben ji, you're not doing anything too. Crazy with my money right?

Got a great opportunity now, you may need to double down on original investment. Will PM more deets.

Posted from my Fishing Yacht "Strung up and out" in The Cayman Islands

 :excited:
I think what my friend Mitch is trying to say is that true love is blind.

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #198 on: April 17, 2013, 08:41:58 AM »
Also, I'd like to note that much like insider information with K-State football, this is a safe place to PM steve dave insider trading information.
I think what my friend Mitch is trying to say is that true love is blind.

Offline Rams

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Re: New To Investing Thread
« Reply #199 on: April 17, 2013, 08:48:55 AM »
My advisor has averaged close to 10% for 3 years, is this a ponzi?

Two years ago, maybe....now, not unlikely.  Cash out, and buy an S&P index fund.  Pay super low (next to none) fees, and "match" the market every year.  Retire happy and play botche ball with me and drink little old man beers.

New question, how do I maximize my safe harbor  match?
it depends.  the basic match is 100% up to 3% and 50% from 3% to 5%.  but they could be using an enhanced matching formula.  it all depends on how the plan was designed.

edit: go to your hr person and ask for a "summary plan description" of the 401k.  the match rules are outlined in that in pretty plain language.  or just ask your hr person how to max out your match.
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