Investing advice anyone?

# Country you live in: Canada
# Income: 60-90k
#amount to invest: 30k
# Risk Tolerance: minimal
# Timeframe for investment: short term
# Debt: none

You must define the risk tolerance. What does "minimal" mean to you?

Minimal to me means bond fund at the max.

Not sure what the contribution limits are in a self directed IRA, but if you're just having the money "parked" before you start trading, then I'd say you are already in what you should be in - a money market fund.

Minimal means I don't want to have to worry that my money will shrink rapidly or disappear.

I mean where do you go if you want to be 95% sure that your money will at least grow, with decent hopes that you may get a strong return? Is that to be expected? And what is a good return to shoot for or consider a success these days?

well poker will probably still occupy my time for a little while longer. Is it not worth investing it in something unless I plan on keeping it there over 6 months? How hard would it be to pull it out of a stock or index fund and are you saying to leave it in money market fund because of the potential short term volatility of other potential investments?

Losing the 12k would piss me off but it wouldn't hurt too bad.

I think 6 months would be a good go / no go line. To Wil's point, for only two months of investment you will have to pay fees to buy, fees to sell, you wont have time to put in the due diligence to select an investment, along with the short term volatility you mentioned.

I'm switching companies and have about $100k in my current company 401k. Any advice on what I should do with this? Current options (I believe) are:

- Leave in current account
- Roll over into new company's 401k plan
- Roll over into an IRA account with a brokerage firm and use/invest how I choose

I am 22 years old and live in the UK. I am looking to put £450K in investments/ savings . My income is absurdly variable and unpredictable and all comes from poker (a little from staking). I play 25/50 PLO mostly online while doing a few live events but not loads. I am very well rolled for 25/50. I have no debt. I rent and all my rent is paid for the next 6 months. I am unsure where I am going to live when my current lease ends but I'm not sure I really want to settle down anywhere (i.e. buy a place to live). I do not live a balla lifestyle (apart from holidaying to play a couple EPTS/ aussie millions/ Vegas). I have enough money in cash/ bank account to live comfortably for the next 6 months until the lease on my current flat ends.

I want to get some living expenses locked up somewhere accessible if poker goes tits up. There is a decent chance that I will end up living in the same rented flat and the landlord will allow us to pay monthly next year (we paid for everything in advance last year to lock up the place). That would equate to probably about £16k for the year. Its a possibilty that I might want this money within the next few years to help me purchase a property. I really don't know/ can't predict what will happen. I am putting the maximum I can each year in to tax-free savings accounts but the maximum is only 5k/year.

Any advice anyone can give would be greatly appreciated. I was thinking about putting some in a savings account I have access to - sacrificing some returns for having living expenses accessible. The rest I originally intended to put in to vanguard index funds through vanguard.co.uk (70% FTSE100, 30% emerging markets) but then got kind of concerned I might want the funds to buy a property some time in the next few years.

Crazy impressive stash for 22.... anyways don't be too afraid to have this money in an investment account. Just because you are looking to buy a place in a few years doesn't mean you cant invest it until then. You can sell a stock/ETF and have it back in your savings account in 4-5 days. This may however play a part in how risky your investment is if you plan on using it within a few years. Just make sure you have living expenses for ~ 6 months handy in a savings account and invest the rest.

I'll leave the investment suggestions to the pros here
Best of luck

Either of these - entirely dependent upon how good the new 401k is when it comes to variety of choices (only US stocks? no bonds? etc) and expenses.

I plan on Going back to school soon to finish my undergrad, what other states have that plan or somethign similar?

Every state has at least one 529 plan. Wisconsin's is called EdVest (only know that for obvious reasons). You can Google for others.

I wouldn't worry about this. If you buy property you'll most likely get a mortgage, with interest rates currently very low and numerous tax benefits to doing with a mortgage. Some will suggest the warm fuzzy feeling of owning property and the 'security' it brings is enough. This is crap, you'll still have to pay taxes on your property, so there's no real safety there if you suddenly lose income.

Your safety will come through maximising +EV passive investing, which involves putting most of your money into a diversifed portfolio. I think your split is good, but I'd go something like 33% FTSE100, 33% Emerging Markets, 33% Other world markets, to spread currency and risk factors. I'd aim to invest a large amount of money in this. Yes, there's a chance of a drawdown, and maybe later you'll need to withdraw. Thing is, its not like you lose all your money when you need to withdraw. You're passing up on +EV because of some variance concerns, but in truth the variance isn't that large unless 2008 happens again, which seems to be a very very very infrequent event. If you drawdown 5% over 2 years and then want to withdraw, is it really that big a deal?

The other option would be property, I have no idea about the UK property market, but if you did a lot of learning and research you could take out loans and manage some properties. Problem is, property is very very difficult, its great when you get it set up and understand the risk factors, but that's not easy. But the good part is, if done right, you have a great stream of hard cash and assets you can re-leverage later. I'd only go this route if you're very serious, but it sounds like you're not.

If you want to buy a house for pleasure, sure, but I'd get a mortgage, pay the minimum up front, and I'd be very very sure you're going to live there 10 years or longer. The property market for appreciation is sluggish in the UK and there's much more risk than the stock market; keep in mind when the property market goes nowhere, you still pay a ton in taxes for buying, selling, and year-to-year, so you have a big negative pressure that's more hidden.

Anyway good luck, any more questions, shoot.

Wov thats a great post Arturius. Besides being older Im kind of in the same boat as Gavz. Vanguard seems great.

If you want to diversify investments any more then your 33/33/33 split, whats the next move? Or is that as default spread enough, since its so many companies and markets?

Talking about currencies.

Any ideas about smart way to deal with variance in that we play in USD but Im living in England (£) but are long term gonna need it to be changed into Norwegian kroner. Im very geared into dollar and dont know how smart that is.

USD vs NOK is basically very swongy and Ive tried to offset it by timing cashouts but realize that sometimes waiting isnt possible (if I wanted to buy a place despite warnings for example).

Guess the same could apply for USD vs Punds but for me NOK is most interesting.

http://www.dollars.com/chart/USD-NOK?period=10y

There is a 10 year graph to illustrate my point.

Lastly changing currencies obvs cost so seems like I should do as few as possible, big changes I guess.

No idea if this make any sense, but it never hurt asking smarter people then me, about this stuff.


Thanks

Andreas

Also for Gavz case, would it make most sense to put everything in VG at once, or do like 25-50% straightaway then spread the rest over 6-18 month? Or something like that..

@ gavz. You should think about using the ISA wrapper for investment in stockmarket. You can just have a generic bank one or something, but may as well avoid chance of getting taxed, if you don't pay into cash isa can lump a bit over 10k a year in atm, but is going up in april.

This bolded part above is just non-existant. There is no such investment. If there was, there would be a lot of very rich people in the world. The expectations are unreasonable.

One of the most important things you can learn is that with every investment the risk is what dictates reward. Risk is priced in. You can't have little to no risk and have big returns. It just doesn't work this way unless you have inside information of course - which is why it's illegal.

I'd say most people make this mistake. Everything is great when they are doing well, but they go ******* when things don't go well, like the millions of people who got hammered in their mutual funds during the last recession.

In your case I'd invest in a money market (safe, but almost no return), or a short or intermediate term bond fund (small return, but relatively safe). In the 6-8 month time period, there just is no telling what will happen with stocks. No one can tell what happens to oil productions, natural disasters, etc. A good scenario would be what if Libya has a civil war and then in 3 months we have a hurricane that takes out oil refineries in the southern united states? That would cause something like a general stock market fund to lose maybe 15% of 6 months. Not sure how likely that is, but hell, anything is possible.

If you're going to actively manage it in 6-7 months, then put it in something relatively safe and then make your decisions in the future. Just my opinion.

As a general rule of thumb I'd look at it like this
(I know this isn't true, but I'm talking practice, not theory, and I'm thinking in maximum losses and gains in most normal conditions not including things like nuclear wars)

1. Money Markets : always positive, but returns are VERY small. Think less than 1 percent to 3 percent.
2. Bond funds : -5% to +5%
3. Mixed funds (stocks and bonds): -25% to +25%
4. Stock funds: -50% to +50%
5. Sector funds: -60 to 75% to +60 - 75%
6. Specific companies: Can go broke or kick butt.


Very very general, but just wanted to put some type of numbers and ranges to the investment decisions people will usually make.

Hey all,

Name is Jason.

I invest pretty heavy in selling shares, work full time and go to school full time as well as play 50nl rush.

So, on to my questions...

I have nearly no money to my name but have paid off what was to me large amounts of debt. I am now looking to start saving/investing.

I have 2 months reserves as of now. From here I am looking to start putting money into the markets. I started a sharebuilder account and have just put a small $150 amount into the SPY ETF. I have become obsessed with reading about the markets and economies as well. My poor google reader has paid the price.

My plans, which I want opinions on:

50% of my poker winnings and staking winnings go into an online brokerage/savings each month. I plan on being a bit anal about this and doing this every time there is $150 available in my personal live outside of savings too.. On that note...

I have a sharebuilder account and just signed up for folioinvesting.com. One thing about folio that I don't know, is if each trade in a stock is $4 like at sharebuilder or if it is each trade, and I can diversify that $150 among many stocks. Can any of you answer this, I am waiting for my account to fund and havent been able to try this yet.

I am comfortable with the $4 fees at both sites to invest the $150+. I see it as a price to pay at the moment as I try to build up a portfolio and grow its dollar amounts. Obviously in the future I will grow to enough funds that another brokerage might be a better place for me.

?

Saving is far more important to begin with, its commendable you have paid off debt, but now you need to refocus to saving first. You need to ensure that the money you are putting into the stock market can stay there, you don't want to have to sell because you need the money.

It will be every time you buy and sell, no matter how many shares. 1 or 100. $4 on every $150 purchase is a 2.6% commission. This is ugly and is actually a significant waste of money. Think of it like paying for an ATM withdrawal - nobody likes to pay a fee there and if you really have to, it only makes sense to withdraw enough that it minimizes the impact.

To think of it another way, you are automatically trailing the market 2.6% each time you spend $4 to buy $150 worth of stock.

I think you should focus on saving first. Then once you have a few thousand dollars saved up, then consider taking a grand or two to invest into the stock market.

I am only 21 yrs old and have 7-10k to invest. I'm looking to somewhat start a portfolio that i can show to employers when i start applying for jobs. Anyone got any solid ideas to start or a good link to read? My risk tolerance is high!

Thanks a lot for taking the time to answer.

I'm kind of naive - what taxes would I be avoiding by getting a mortgage? I just assumed if I had the luxury of being able to buy outright - I should just do it.

If I did get a property to live in then I'd have a chunk of money to support my living expenses in a savings account if I managed to completely bust myself. I'm really not even close to settling anywhere for ten years though. I hate committing to anything.

I wouldn't want to build a portfolio of properties to manage I don't think. Maybe it's something I would want to consider later on in life but I still love poker and want to devote as much time to it as possible at the moment.

It surprises me that you say buying a house would be a riskier investment that the stock market. If I decided that I didn't want to live in the place after a few years I could try and let it out and get myself some sort of income stream? As I said, I'd have money set aside for living expenses if poker went completely tits up to go rent somewhere and get a job in a store or something.

Someone also mentioned about investing in the stock market using the ISA-wrapper - is there a way to do this without investing via a bank that is going to try and rape me for fees?

Appreciate all the help. Thanks.

When you say you want a portfolio to show employers - what does that mean? Your employer shouldn't care if or where you have money put away in the stock market. In fact its probably some breach of employment law to ask the question.

If a potential employer asks you about the stock market because your job is in finance, etc, and the market would be part of your job, you should be able to talk about the market and choices you would make without relying on a 3rd party for a 'model portfolio'

Start reading here: http://www.bogleheads.org/wiki/Main_Page

Sorry I didn't specify. Applying for an internship with a couple hedge funds and possibly some trading internships/positions. I have some disposable cash and just want to get started somewhere.

In that case, stay away from the bogleheads website lol

But in all seriousness, if thats what you're looking at, little ol' 2p2's BFI thread for "where should I put it" isn't the place to start. Do some searches in BFI though as I do believe there have been others who have had the same question in other threads.

You can write off your interest expenses.

In this case, I wouldn't think about property, at least for somewhere you want to live. Property 'feels' safe, and there's a tiny bit of truth to that, but growing your money is even safer, and property unfortunately is not a guarantee of that. Now days, the play is cash flows.

Yep, look to the market in this case.

Problem is, after expenses like property taxes, home maintanence, insurance, paying a company to find and look after your renters, you don't usually get a great return. To counter this you need to find strong opportunities, Spex talks about these in his thread (search for him). Obviously you're making a little bit of money, but then things like losing money inbetween renters, someone trashing the place, it all gets factored it.


You can invest in an ISA using a discount broker, but you'll have to tweak the investments yourself, e.g in the case of my above suggestions, buy ETFs according too that split. Its not complicated, just find the appropriate ETFs and buy.