It's been a little over a year since I bought my first shares with sharebuilder.

Since then I've been using free time to basically get a firm understanding of (almost) every category of financial instruments. I subscribe to multiple magazines, read lots of articles, watch plenty of short videos and documentaries.

I'm applying to a pre-business program for this spring semester to be able to apply for a finance major after that.

Thing is, I was totally overwhelmed before educating myself. Now that I know bits and pieces of the investment world with a basic understanding of most major facets of such, I am still overwhelmed, probably moreso.

It goes back to the idea of "the more you know, the more you understand the scope of what you do not know".

Very, very few events and occurrences in the world occur in a vacuum.

I just can't possibly keep track of everything, all the time. Even 1% of everything. Even .001 %.

[ x ] Overwhelmed.
[ ] Deterred.

You sound like you're more cut out for accounting or academia than finance or business. That's ok. The world needs accountants and (some) academics too, and they make good bank.

He cant keep track of things but he should be an accountant? Interesting

At the moment my stocks are nothing more than one more opportunity to make a profit, and the finance major is the result of me re-evaluating the usefulness of a degree in sociology.

What I'm really saying with this thread is, I need to find a few different niches of the broader financial entity and focus on them. Except I don't know where to start. Yes, a diversified portfolio has never lost money in any given ten year period (according to Kiplinger) but if I'm going to invest my time I want to make it worth my while monetarily.

Basically what I've amassed after all the reading is:

1.) Pick low cost index funds and low fee mutual funds (run by managers with +EV records)

2.) Don't try to time the market.

3.) Most 'expert' fund managers cannot beat the S&P and other benchmarks so where does that leave much lesser experienced persons such as myself?

4.) Diversify, Diversify, Diversify.

5.) Bonds, CDs, and Savings are useless unless you have 6 figures or more to set aside.

Don't get me wrong, I know the odds are stacked against me being one person who isn't a quant or mogul with many connections etc. but I'm still trying, and finance interests me.

not sure what the point of your post was, but it sounds like you should just be index investing.

Yes. And reinvest the dividends. It takes no time or learning. You just transfer the money, click "buy", forget about it a decade, and focus on other things.

This advice is wrong. You can certainly time the market over long enough time periods. There are times when valuations are very obviously too low. There are times when they are very obviously too high. We're on the high side of the middle right now.

You know why they can't beat the benchmark? This is a big part of the answer:

And hedging. This is just a way to take lower returns for less risk. Which is essentially the same as:

which are excellent investments if you can get good returns. For example, when interest rates are high and inflation is low, CDs are a no brainer. And this isn't true:
Stop reading so much. Don't ever watch youtube videos. Think for yourself. The market isn't hard to understand. Individual stocks can be very easy to understand in terms of their long term prospects, or the quality of their business, or the nature of their catalysts, or even their short term prospects. Focus on the things that are fairly predictable, and clear. Look at source materials, not opinions. Read 10Ks and 10-Qs. Listen to conference calls. Eventually something will pop out at you.

I use youtube a lot, but when it comes to finance the only thing related to that is documentaries basically. I'm not a big follower of individual vlogs.

I watch investopedia videos for broad strokes of an unfamiliar term or instrument. Other than that, I read certain stuff on marketwatch.com and both Kiplinger's and Money magazine monthly.

I'm not trying to read excessively into too many sources, but the way I see it, with my experience level, I am better of 'piggybacking' others that know much more than myself until I find my own rhythm.

I take it you are/were a part-time or full-time investor? If so I might PM you with more specific questions in the future.

When it comes to getting some sort of broader benefits and education, it's a mistake to read web articles, magazines, videos, etc.

All of those things give you a sliver of info, a sliver of perspective about something. Without proper context and background, they are useless to you - in no smart part that many of them are written to just fill the pages and are next to worthless to begin with. Just sensational fluff that hits important keywords that drive visitors and sell magazines.

So. Get 1 or 2 finance books. Most finance majors read A Random Walk Down Wall Street and it's very basic and good intro for anybody. Then you can read something heavier. Only after you have a broader understanding of the basics should you open up any magazines/whatever. Right now, you are not just wasting your time. You are being counterproductive.

Please not 'a random walk' otherwise 100% agree with entire post.

Why not? That was the book I first read before getting an MBA in finance (and partway through the CFA grind) and it's one of the most true books I've read.

I have a good amount of PDF files on investing, mainly stocks. The only titles I recognized were 'Intelligent Investor' and 'Securities Analysis'. If anyone wants to recommend any other reads I'll see if I have them.

I would add that he should probably sign up for electronic documentation sent to an email address he doesn't have and also enter his password by keyboard mashing so he can't check up on things.

He is scared money and will get whipsawed repeatedly otherwise.

I think calling me 'scared money' is a bit inaccurate. The first stock I bought was a penny stock I randomly heard about for $295 just to 'see what happens'. I've been prepared to transfer $2500 to TD Ameritrade as soon as I decide how to actually spend it.

If I had to choose though I'd rather be scared than reckless, especially with something new such as investing.

Or were you being sarcastic?

Basically you're reading a lot of material geared towards the laymen and imo without a firm foundation that will allow you to separate the little nuggets of gold from the mountain of yellow rock.

I don't know how old you are, what your financial situation is and what career path(s) you are looking to get into, but it appears that the structure of a classroom setting may be constructive for you with regards to finance if the self-study route isn't helping. All you'll need to learn is the basics of financial mathematics and some basic valuation techniques and kind of think about how you want to approach investing. There are many different paths and no right way to invest.

And no, he wasn't being sarcastic. he thinks you basically have a lot of data but no knowledge so will be inclinded to buy high and sell low.

This is the reason I'm hesitant to put down any significant stake until I feel ready, which I do not. I'm way more aware than I was last year gambling on a random penny stock, but I have a long way to go.

I'm 26, with an income that is underneath the level of reporting taxes. I still live at home with the parents, and pay more than 50% of my living expenses. I have lots of hobbies, a few of which I consider myself good at, but haven't really decided my 'path' yet. Yeah, like most people on here I wouldn't sneeze at a professional poker career, but I am being realistic with my expectations.

I dont think ive ever used youtube for educational purposes (at least related to investing).

For bottom up stockpicking, its really conference calls, quarterly reports, annual reports and talking to mgmt, coupled with a decent understanding of how the world works. And that doesnt mean knwoing everything all the time. that means being aware of long term trends. its not that hard.

You still own the penny stock?

You are reading marketwatch, etc. That will make you scared money and will get you whipsawed.

If you have $2500, you don't have enough to make it worth doing anything other than indexing. Buy VT and be done with it. Once you have another $2500 buy more VT. Lather rinse repeat.

Investing with $2500 is just dumb. If you put full time effort into it AND are talented AND are lucky and have extraordinary returns, you can expect to make at most $2500. Average case $500. For all of that effort. If you're good. And lucky.

A job is the best stock you can invest in when you have $2500. In fact anything below around $30K, you should be working your spare hours instead of wasting it reading financial magazines and websites and youtube vids, which will rot your brain. A job is such great training for being an investor:

1) You get a much better understanding of how the world works
2) You gain efficiency and decisiveness

And they actually pay you money to learn these skills. The quickest way to grow an investing roll is to work another job. It has 1000% guaranteed(!) yearly return on $2500. You can't get that in the market.

+1 to whoever said he sounds like an accountant/academic. Get an accounting degree, IMO.

LOL @ "more than 50%", you are 26 and still get an allowance from your parents?

Your focus should not be on investing at this point. It should be on becoming an adult.

No. I don't get allowances. I don't pay for the house I live in, and I don't pay for some of the food I eat. I pay all other bills. Now get back to me when you have something constructive to say.

Becoming an adult happens in steps. Thanks for understanding though.

Given the last few posts, IMO you should concentrate on personal income for now. As in make more money somehow.

Mr, Action,

Which stage of becoming adult are you at?

Thread over.

Investing is for people who have money.

You just need to earn more (job/etc) and be thrifty and not spend any money. Focus on these two things instead of wasting your time daydreaming of money magically making money for you.

You might think this is a negative response, but this answer actually saves you a lot of time that you've been wasting thus far. Focus on doing something productive instead. Namely, job and income.

Working an entry level job would have higher expectation than wisely investing 2500. Learning in-demand skills even more so. Starting a micro-cap small business or consulting gig would have a lot more upside with not much more risk than investing the money in equities.

If you want to start investing as a learning hobby that's fine but don't delude yourself into thinking this is a wise use of your various resources given the situation.