Yeah, I know what you mean.

Also, pretty funny that you go on a rant about how you need to save everyone from themselves b/c of your superiority and then end by saying this:

That has to be a level, right?

sickfade, is there any way you (or varacross) would be held accountable should I or anyone on this forum pm you and start taking your specific advice and end up losing money? Who regulates the advice you give in private?

I don't doubt that money can be made trading, although I have not met a trader who didn't have his own downs inbetween his ups. Some point of this marketing strategy has to be to get your own assets, correct? Any competent trader I know would much rather manage someone else's money and have them as a client rather than tell them their strategy for free.

Also, Varacross, you're really telling people to stay away from long-term investing?

How can i be held accountable for telling someone to read a book and how to read a chart and indicators on a stock??? I dont EVER say "buy this stock" I say what I see and its up to the individual to make a decision on their own. What are you smoking dude? Is this for real?

As far as you saying any competent trader YOU know would rather manage someone else's money...haha. All Ill say to that is if they arent willing to trade with their own $$, they arent very good. Period. Why not make 100% of the profits with your own $$ if you are a "competent" trader. You totally contradict your own statement by saying that.

Com-pe-tent: Adjective: Having the necessary ability, knowledge, or skill to do something successfully.

Not even going to respond to the 1st set of comments because they are some of the dumbest statements I've ever read.

I'll answer your last question with another question. Do you think it was a good idea (in hindsight) to invest in stocks when the DOW was 13k back in 2008 when things were unfolding?

It only dropped to 6600 from 14k, and you'd still be net negative... good decision to jump in there?

Its not like the financial situations are eerily similar or anything... or worse for that matter, seeing as one of the worlds largest currencies is on the brink of collapse.

So, what do you think? Good time to invest?

Ignorant Clown.

It is dumb to ask who regulates what you can and cannot say to clients?

That depends on the goal for the investment. Do I think it was a good idea for a 30 year old to invest in stocks with his Roth in 2008, the answer is absolutely! Do I think people who were about to retire should've had so much exposure to market fluctuations, the answer is a resounding no.

Whether or not something worked out doesn't necessarily prove the decision was poor. If your aces got cracked, was it still a good decision to get all your money in preflop? Of course it was!


To answer your last question; yes, now is as good of a time to invest as any other time. There has always been "something" on the brink of collapse, something to fear, something that scares people away from investing.
Legg Mason has a great concept piece that illustrates the point better than I.
http://ruediholder.com/downloads/Lea...0of%20TIme.pdf

(pdf file)

*for the record, I am not affiliated with legg mason or have ever worked for/with them.




That is/was completely unwarranted.

So you're secret to turning 10k into 100k in 1 year is to read a book that explains the accuracy of a couple moving averages? So in reality, are you anything more than a satisfied customer? You parade your experience in here like an arrogant know-it-all, but are you qualified to tell people what not to do anymore than someone who has read a different book that worked for them?


Maybe I said it wrong. The people I know who actively manage money give advice to someone with the ultimate goal of getting their business.


Because charging a fee and managing $50m (including your own accounts) is more lucrative than solely managing your own $$$ and turning down biz.

I'm saying money managers control more than just their own assets because it is more lucrative. That is not a contradiction.

Thanks.

1st - Im not giving advice on what to invest in... I WILL NEVER help people from this forum because of arrogant combative teenagers and early 20 somethings. I HAVE taught people in the past how to analyze and figure out when the buy and sell points are.

2nd - you're so wrong. obviously you think any time is good to 'invest' in stocks if you are young (which is dead wrong). The #1 rule of investing is learning when not to own a position... that makes you far more money than anything else.

Its funny, you're probably a person that thinks that if you bought a house in 2007 it was a great time to do so... fact of the matter is you work your WHOLE LIFE to accumulate wealth, the goal is to MAKE money in the long run so you can live and retire... not invest in something at the peak of the bubble so it ends up taking 5 years to breakeven.

Would you take a job knowing that would make you pretty decent money eventually but you'd have to work for free for 3-4 years?

Im done replying, its obvious that the audience here is not educated, inquisitive, or humble enough (to admit that you dont know what you dont know) to warrant me wasting my time.

http://en.wikipedia.org/wiki/Narciss...ality_disorder

Also, before yelling at people for being "not educated," you may want to learn to use the English language properly.

I lied - one last reply, seeing as this was too easy.

when using a list of items... you need to keep the same prefix. If you think that writing:

"uneducated, not inquisitive, and not humble enough"

is correct grammar - please go back to school. Nothing worse than a 20 something (or probably a teenager) correcting people on a public forum for incorrect grammar usage, than to try and point out something that is actually correct, and then use improper grammar to try to 'FIX' it. Some advice. quit your job at a gas station, go back to school, remove the chip on your shoulder and admit you know nothing... and maybe one day you will make 1/3 of what I do.

Makes me glad I never was part of the 2p2 community. you guys are just arrogant, ignorant, argumentative morons.

I'm not sure what exactly you're talking about. I quoted the “not educated” because your writing is so terrible. I was referencing your inconsistent use of apostrophes. For example, “Im,” “its,” and “dont.” I thought maybe you just didn’t use apostrophes on the internet, but sure enough you do in other words. You clearly just don’t know how to use them properly.

Also, I’m a professor. You can find a thread by me titled “Ask a Professional Historian.” That doesn’t really matter though. You’re still an obnoxious, arrogant know-it-all who really knows nothing. I’m sorry you’re so unhappy with yourself.

Hey guys, rather than bitching back and forth between various people who will not ever change their mind*, how about we negotiate terms for a wager to test this theory about trading?


*yes, I realise that this is an internet discussion forum

I'm in for a cool $5. As is 500 pennies, not $5,000. PM me!

I suppose if I feel like you've missed my point, you feel the same way, so there's not too much more to say. If someone wanted to start trading with their savings that they needed in 6 months, I take the same basic approach as dale; the activity has no principal protection and there is a possibility of losing money.
I honestly don't mind your (or sickfade's) idea as much as your obvious omission of these risks, how easy it is to get a 1000% ROI in year 1 and anyone who doesn't do this is a sucker.

I'm not the one throwing insults around, so I can't take your assessment of humility with much seriousness. I hope you understand. Historically, the get-rich-quick market strategies (or low-risk/high-reward) have all crumbled for one reason or another. Ironically, you've alluded to the idea that we are on the brink of a crisis to strengthen your argument to use your trading strategy, even though times of crisis are typically what proves their vulnerability.

varacross,

i don't wanna fight witchoo mang. i will state my position and move on:

i am definitely a noob. i'm sure you know way more about personal finance than i do. however, this thread is about investing advice. as i understand it, investing and trading are basically very different animals; investing is more like limit poker while trading is more like no limit poker. i'm a limit guy, so that's what i want to talk about. there are other threads for no limit.

good luck in the coming financial year,
t

ok -- getting this thread back on track (choo-choo!)

• Country you live in - US
• Income - $75-100K
• Risk Tolerance - High
• Timeframe for investment - Mostly long, some short to mid (see below)
• Debt - <$5k student loan debt (paying this off is already on the todo list)
• Assets:
  - $10k emergency fund in a savings account with an online bank (getting 1.1% -- is this still pretty reasonable or should i shop for a better rate?)
  - 401k through work. i contribute from every paycheck the max that the company will match
  - Roth IRA containing $10k (max contribution last two tax years) but not invested in anything
  - ~$40k sitting idle in a checking account with a major us b&m bank

i'm in my early 30s with a professional career. here are my investment goals:
- follow best practices. i want to retire someday; no need to get raped by inflation until then.

- level up. afaik, i've got all the basics covered. now i need to start "building some wealth".

- keep it simple. i don't want to babysit a ton of holdings; i have other hobbies which i find more interesting.

- short- to mid-term safety valve. i've burned out of this career before, and i reserve the right to do it again. sometimes you just gotta bum around the world for a few months, buy an airplane, and/or start a business.

questions:
- when assessing risk tolerance (percentage of stocks vs bonds, essentially) and diversification, do i look across my entire portfolio? or do i want each individual account to have a split of stocks/bonds and diversity? in other words, if i have $10k in a Roth IRA and $40k in a brokerage account, should i split the Roth 80/20 stocks/bonds and include domestic/international/small-cap/large-cap and then do the same with my brokerage account? or, do i just treat it as $50k of total investment power and allocate investments to each account based on tax considerations (a la http://www.bogleheads.org/wiki/Princ...nd_Placement)? i think it's the latter.

- let's say that 18 months from now i tell Manager Rob to write goddamn login page himself and start my own business or move to southeast asia. consequently, i want to get some cash out of my portfolio. further, let's say i've got $10K in bonds sitting in my Roth IRA and $40K in various stocks/index funds/index ETFs sitting in my brokerage account (20% bonds/80% stocks).

a) my understanding is that bonds are better short-term investments because in exchange for having a lower ROI they have lower variance and therefore are more likely to have increased in value over the short-term. ergo, if i need to liquidate something, i would look at bonds first. do i have this right?

b) if the bonds i own are in my Roth IRA, how can i access them? won't i have to pay penalties?

c) am i approaching this the wrong way? that is, if i think i'm going to make some kind of life change that requires capital in the next 12-60 months, would it be better to plan for that separately? e.g., if i know i'm going to want some extra cash in 18 months, put that money in a CD instead of into my investment portfolio? is this question basically answered by http://www.bogleheads.org/wiki/Placi...taged_Account?

- so how do i determine my allocation strategy? i get the impression that this is sort of like asking "how can i play winning poker?" -- it depends. i like the simplicity of the strategies at http://www.bogleheads.org/wiki/Lazy_Portfolios. in particular, i like http://assetbuilder.com/couch_potato..._cookbook.aspx because it is simple and flexible.

a) are these good reasons to pick one of these allocation strategies? if not, how do i begin to create an allocation strategy?

b) would it be better for me to stick with a targeted retirement plan (e.g. FFFGX FIDELITY FREEDOM 2045)? maybe use one of these plans as the basis of an allocation strategy?

sorry this is so long! i would greatly appreciate any advice and/or pointers!

(btw i have no affiliation with any plans/sites/resources linked. just a noob doing research.)

everyone is free to disagree with me.
Your portfolio will end up being diversified regardless how you separate accounts, but treat each account based on your goal for that account. What is your roth primarily for? 10k tops can go towards house or college without getting dinged 10%, so use it for it's intended purpose - building a retirement base that you're going to live off for the rest of your life once you turn 60. What is the best part of the roth? The taxation (or lack thereof) of earnings. Once you're 59.5, you'll want that to be your largest account, so give it the best shot to balloon while you can still contribute to it.

Your understanding of bonds as a short-term savings vehicle is correct. Unless you're holding the bond to maturity, you're still going to have to find a buyer, but because repayment is guaranteed by the issuer, the swing in bond prices are mild compared to the swing in stock prices. If you're holding bonds directly, that is what you're looking at, and the regular interest you receive is also giving you a good chance you will make money off the investment. If you're in a bond fund, the same principle; you're hoping the yield & reinvestment is going to outpace fees and capital loss (if any) on the share price.

Correct. Except for qualified withdrawals (house downpayment, higher education, and a few other things to cover qualified "hardships"), the Roth only makes sense as a savings vehicle for something at least five years out or until you're at least age 59.5, whichever is greater.

There are advantages and disadvantages, but I don't feel you're wrong at all, and given your concerns, would not advise otherwise, even if bogleheads disagrees.

I not sure if I understand your question, but I'll answer to what I think you're asking: all of those allocation models are reasonable. risk tolerance is neither static or absolute, so it depends on each person. Out of those 9 allocation models, there isn't necessarily a wrong choice for a long term investment. For the shorter term investment, liquidity and principal protection are typically more important, so plan accordingly.

for your roth and 401(k)? Sure! Those funds are designed to decrease your equity exposure as the likelihood of needing to access the account increases. They do it automatically, and typically without prejudice to performance, so if you'd prefer to have the asset allocation continually done for you based on your age, the target dates are fine. Very low-maintenance on your end.

Ok first of all, I never said i took on clients. I trade with MY $$ only. Second, I never said it was a secret on how to trade and make huge profits. I also never said it was a secret on how to turn 10k into 100k....not in a year...in a matter of weeks.

Ill edit my statement saying it would prob take a month or two to do that. The reason being unable to day trade until you hit 25k per the SEC rules. I could open an account, fund it with 25k and within a matter of weeks have over 100k in it VERY easily.

Ill just continue to laugh at you on how you call people arrogant b/c of your lack of knowledge. Just b/c you are a professor doesn't mean you know what you are talking about when it comes to the stock market. Obviously you have NO clue. You are most likely basing your opinions on your investment experiences which Im willing to bet haven't been very profitable. A degree is just a piece of paper you paid for. Hell most of Congress has ZERO finance experience and yet they make decisions on the economy. That is SCARY!

Ill tell you this about money managers. How many do you think turned a profit this year for their clients? (Including YOUR people you claim to know that manage 50M in assets) Do you know that in Q3 the AVERAGE return (or lack of) by the major hedge funds was -9 to -12%?

Do you know what the NUMBER ONE job of money managers is? TO OBTAIN AND KEEP AS MANY CLIENTS AS THEY CAN INVESTED FOR YEARS SO THEY CAN CHARGE FEES. Period. They dont care if they make you 1% or 100%. They want to keep you on the hook for a LONG time. They will get their fees from you regardless of the return. That is a FACT. You said it yourself with your opinion when you said "charging a fee is more lucrative".

You think you can prove that managing 50M for a group is more lucrative than managing ones own $$? What is the basis of your statement? You assume I'm trading with 10 or 20 grand or something. Would you make the same statement if you knew I was trading with multi-millions in my account?

Let me give you two scenarios:

You go through all the trouble of getting sponsored to take the Series 7, Series 66, 67, 63 etc and then spend months working for a firm...80 hrs a week.. making NOTHING, then taking on clients and over YEARS build up your clientele...and MAYBE after 10 years (BIG maybe and more than 10yrs most likely) you are able to get LUCKY to manage 5M in assets. You act like there are people left and right managing 50M in assets. Just like the segment on Countdown "C'MON MAN!!!"

Or

You open your own brokerage account, fund it with your own $$, with no need to get certification to trade with your own $$. You learn the ins and outs on your own via reading, watching, trial and error, finding what works for you and what is the most profitable. Use forums, chat rooms, books, even other traders experience to learn what worked/didn't work for them and use that to your advantage to profit from it. You keep 100% of the profits you make (less what you have to give Uncle Sam of course).

Ill take the 2nd option EVERY SINGLE TIME. I have never worked for a firm..I have no formal training of any kind. There is an endless wealth of knowledge/info out there to obtain and some of the most profitable traders/investors on the planet trade for themselves with their OWN $$$ in the comfort of their own home every single day.

Good luck buddy. Im not here to have a pissing contest with you. Im just trying to prove my point that there are MANY ways to make $$ in the market. With how volatile it is, you need to be nimble.

sickfade,

I agree that mutual funds and money managers are horrible. I use low-cost index funds to invest. I don't think I'm capable of beating the market. I just set my asset allocation and invest accordingly. Nothing magical or sophisticated about it.

Good luck to you too.

stop giving advice when you do not understand how things work!!!!!

uh... since when are bonds GUARANTEED? They have CDS's for the sole purpose of 'insurance' in case someone defaults on a bond. why do you think there is so much turmoil in europe because they may DEFAULT on their debt aka bonds and not pay anyone back.

YES Bond prices are usually more mild, but move in inverse with the markets... stocks go up, prices go down.

Example:
Bonds offer 5% yield at auction. The price of that bond fluctuates over time, as people value it differently. if the market is cratering 5% is very attractive so people may bid it DOWN to 3% yield... so you essentially pocket 2% yield. Value of a bond acts in inverse to the yield...

conversely if the market is exploding, less people want a measly 5% so it will be worth less because of opportunity cost, where you could earn 10% anywhere in the market.

and you commenting on me not using apostrophes? Really? wow. are you going to comment on improper capitalization on some of my sentences too? or maybe uses of semicolons instead of apostrophes?

pathetic. you're a buffoon.

sickfade,

since according to your numbers you are making hundreds of $/hr and probably thousands soon, please dont waste your time cluttering this thread by responding to "trolls". no need for you to waste your time or defend yourself.

there is an unwritten rule here that this thread is only for people making less than $1000/hr.

do you understand how dumb you sound?

"if" you're so successful... stop posting in this thread.

Its unreal how arrogant and immature the poker community is.

Varacross, people would probably react better to you if you stopped insulting everyone and calling everyone stupid like a petulant child.

Can you guys please have this argument about trading in another thread, this is the ""I have XX money to invest, where should I put it?" Thread"

those ignoring josem's request will be banned if I see any more notifications from this thread about this issue.

The argument isn't about trading or investing. The point is about you CANNOT safely 'invest' right now. If you dont want to make short term trades, sit in cash, period.

Brokers at large companies will always tell you "is always a good time" to put money into the market if your horizon for retirement is 30 years out.. that's simply not true. These people say this because its their job to sell you.

Everyone has the same goal. "I want to grow my my money over time, as much as possible, with as little risk as possible." If you want to know whether to choose a roth vs a standard IRA (if this is solely for retirement) the answer is simple... the answer is always "both"

its simple math... there are calculators which tell you what you should contribute to based on your current income vs future expected income later in life and at retirement.

ROTH accounts are tax free when you withdraw because you pay taxes up front, whereas traditional IRAs you are tax exempt on depositing to the account, but are taxed fully when you withdraw. If you play with the calculators you will see that ROTH IRAs will almost always outprform traditional IRAs after taxes if you are younger than ~35, whereas the opposite is true if you are older than that age, due to compounding. At the end of the day the retirement age is not a standard 62 or 65 anymore, people are living longer so you need to factor that into account, plus you cant count on Soc Sec because its a big fat unknown.


With the above aside... you need to do a lot of self directed learning about the markets before you make a decision on what you do with that money once it is in that account.

people are 'investing' as though stock prices always go up 10% a year, thats just not reality anymore - thats JUST what happened in the past... we have 3 major events coming up (1 of which is a big fat question mark):

1) Inflation because of all of the money we are printing as a country
2) USD no longer being the world's reserve currency (probably 3-4 years out)... this is being pushed by the world bank... they want to call it something like the "Bancor"
3) Housing market stagnation
4) we have no concrete idea how the US will solve its debt issue... if they cut spending a ton, what impact will that have on the economy... if they raise taxes a bunch, what will that do to the economy? Either way neither of which is conducive to growth in the near term

Comments to the above:
1) will eventually happen, to what extent we dont know.
2) people debate on what this will mean, but look @ the GBP and what happened to that country and the impact of not being the reserve currency had on it.
3) basic research indicates that housing will recover in ~10 years, but we will have a very long period of recovery.
4) Form your own opinion

If you want to give your money to someone else this does not guarantee returns... you need to understand no amount of basic Q&A will help you choose one investment over another. over the long term most studies show that the VAST majority of funds do not exceed returns above and beyond the S&P.

with all that being said... digest the news, and whats going to happen in the next year. If you think you can pick something that will go up (or the market is going to go up) then be my guest go ahead and 'invest.'

oh, and before i forget to throw this point out there... over the past ~12 years, the market has returned a TOTAL of whopping 5.6%. (Jan 5 2000 the DOW was 10662 to Nov 23 2011 when the DOW was 11250) and one can easily make the case that that 5.6% over 10 years is well within the statistical range of error (and we will probably see ~10650 again in the near future making that rate of return 0).

so, if you want to pick a fund do it, if you were a 'trader' and knew when to exit your positions and go into cash (on the peaks) you would have a darn nice % return having sellpoints of probably 13k, buying back at 7k or 8k and then selling again in the 12s on this last bounce. but if you were a fire and forget investor.. you made 0.

so... after that diatribe... I still say people are asking the wrong questions.