Last March I turned 18, and as I begin to become more financially independent, I feel like I should know a little bit more about economics than what I learned in high school. I'm particularly interested in stock investment. I set up an account on a website called investopedia.com that allows you to simulate investment strategies with real market data. I've already read over the absolute basics a few times and feel like I have a good understanding. Does anybody have any tips that they feel really helped them understand economic systems when they entered the market? Thanks!
Investment Strategies/Financial Advice
- Thread starter NSRndm
- Start date
HamFaceGirl
Active member
lol
LIL_WAT
Active member
topic:Krlsn said:
Investopedia is a fantastic resource. Soak up as much as you can from there. If you want to take the 'safe' investing approach for now, take a look at some portfolio theory eg. Markowitz. Having a simulation account is a great way to start off.
If you want to take a more hands-on approach, start looking for individual stocks that you think are undervalued. For great info on fundamental analysis look no further than Benjamin Graham (Warren Buffett's former mentor)who has two great works on this: The Intelligent Investor and Security Analysis.
extravert
Active member
Buy index funds. You will perform better than most mutual funds just by tracking the market. Trying to pick individual stocks is hard, and not economically viable. Unless you are throwing around lots of money, the costs involved in trading, and the risk that comes with owning a small number of stocks isnt worth it. Keep playing those games though, so you can learn more and get a better sense of how the market works for the day when you do want to buy stocks.
sniper_6
Active member
The biggest advice I would give is to start early. In your post you mention you're 18 so thats great. Too many people wait until they're in their late 30s or 40s to start investing (usually by then they got a family, mortgage, kids, and need to save for college and retirement simultaneously). I started seriously investing when i was 19. I was in college and didn't have a whole lot of extra money and it wasn't all that sexy or exciting. I would recommend first setting up a Roth IRA. When you start working, max that out every year with the 5,500 you're allowed to contribute.
As far as your individual investments, Investopedia is a great resource for learning the basics. Great place to start. As far as researching specific securities, I have a morningstar.com account. This is a great evaluator of markets, stocks, bonds, mutual funds, index funds, and ETFs. I use this it as the primary research tool for my own investments. I'm long in the market, meaning I buy assets expecting/hoping them to increase in value. I don't trade options, futures, short stocks, or day trade. these are all great ways to lose money if you don't know what you're doing. Look at the stock market as a good place to put your money and let it increase over time, not a mechanism for getting rich quick.
Also, don't get discouraged early on. I have no idea what your financial situation is like but since you're 18, I'm guessing you aren't completely financially independent (which is expected for an 18 y/o). Like i said, I started in college. every time i had a couple hundred bucks extra, instead of blowing it on a night out, i would research a stock/bond/etf and invest it. my money didnt grow quickly because I didnt have a lot. Now i'm almost 27 and make about 85k a year. Instead of going to Vegas all the time or driving a car i can't afford (like a lot of my peers), I make sure I invest between $1500-$2000 a month. I've got a strong and diverse portfolio worth about $125,000 and have no debt. Thats pretty unusual for a 26 year old and i attribute it mostly to my interest in investing when i was where you are. Okay, rambling/claim/obnoxious post over. OP, message me if you have any other specific questions. Best advice i can give is dont get discouraged and stay interested.
As far as your individual investments, Investopedia is a great resource for learning the basics. Great place to start. As far as researching specific securities, I have a morningstar.com account. This is a great evaluator of markets, stocks, bonds, mutual funds, index funds, and ETFs. I use this it as the primary research tool for my own investments. I'm long in the market, meaning I buy assets expecting/hoping them to increase in value. I don't trade options, futures, short stocks, or day trade. these are all great ways to lose money if you don't know what you're doing. Look at the stock market as a good place to put your money and let it increase over time, not a mechanism for getting rich quick.
Also, don't get discouraged early on. I have no idea what your financial situation is like but since you're 18, I'm guessing you aren't completely financially independent (which is expected for an 18 y/o). Like i said, I started in college. every time i had a couple hundred bucks extra, instead of blowing it on a night out, i would research a stock/bond/etf and invest it. my money didnt grow quickly because I didnt have a lot. Now i'm almost 27 and make about 85k a year. Instead of going to Vegas all the time or driving a car i can't afford (like a lot of my peers), I make sure I invest between $1500-$2000 a month. I've got a strong and diverse portfolio worth about $125,000 and have no debt. Thats pretty unusual for a 26 year old and i attribute it mostly to my interest in investing when i was where you are. Okay, rambling/claim/obnoxious post over. OP, message me if you have any other specific questions. Best advice i can give is dont get discouraged and stay interested.
*Michael*
Member
Never chase alpha, because you will lose. Anyone with half a brain can tell you that. Index funds are good, so are ones that "mimic" certain markets. I like NESGX, PEOPX, BPTRX, the returns have been good given my risk threshold.
Read a basic finance or investments handbook, they're really helpful for telling you about the different beta's, and let you understand credit, interest rate, and exchange risk (among others), the different investments you can make (stocks, bonds, funds, forwards, futures, puts, swaps, and other forms of calls). It might also explain monetary and fiscal policy, which is helpful for understanding how the Fed responds to different economic scenarios.
Read a basic finance or investments handbook, they're really helpful for telling you about the different beta's, and let you understand credit, interest rate, and exchange risk (among others), the different investments you can make (stocks, bonds, funds, forwards, futures, puts, swaps, and other forms of calls). It might also explain monetary and fiscal policy, which is helpful for understanding how the Fed responds to different economic scenarios.
acualywasdolan
Active member
Invest contrary to the investments someone would make if they believed in political correctness
slav_slayer
Member
One word, Diversify
dont invest all in one sector, invest in multiple sectors to be safe.
Do not invest in commodities, i would invest off-shore (china, Alibaba is an upcoming IPO that is looking very promosing) Also invest in bio-tech (medicine) it is a sector that is sky rocketing
dont invest all in one sector, invest in multiple sectors to be safe.
Do not invest in commodities, i would invest off-shore (china, Alibaba is an upcoming IPO that is looking very promosing) Also invest in bio-tech (medicine) it is a sector that is sky rocketing
Panda_with_Guns
Active member
Large and small cap investments.
S&P 500.
Diversify your financial portfolio.
That is all.
S&P 500.
Diversify your financial portfolio.
That is all.
Panda_with_Guns
Active member
12988203:Panda_with_Guns said:
I should also mention that I put 4,500 in a roth/IRA type fund last month and have already gained 200 bucks.
cool_name
Active member
12988078:slav_slayer said:
I hate when people give this as the end all of investment advice because it simply is not applicable for all investors, most yes, but not all
the only universal truth of investing is the risk vs return relationship. Diversification is a great way to reduce risk, but relalize it is reducing return as well. If you are looking for a high return less diversification is better, but again it is a trade off for more risk. So to anyone looking to invest the most important thing is define what you are looking to get out of it and how much risk you are ok with.
personally I am also 18 and will be able to live fine if my entire portfolio disappeared tomorrow and because of that I am willing to make the high risk high return trade off and therefore have a very undiverfied portfolio consisting entirely of high risk stocks.
FaithTerry
New member
Thanks for your advice but I think that they need an update, sorry. You know time is changing and we have to follow the updates. To be honest it is a little hard nowadays to make money. You have to think about something new in advance, of course, if you want to make money. You know I have found this blog https://themoneymix.com/alternative-investments/. There I read a lot of things about investment and even found some ideas. I guess that if I'll bring a fresh breath to one of the ideas I'll be able to make some money. We shall see. My advice to you is to read that information.
**This post was edited on Jul 20th 2020 at 5:02:06am
**This post was edited on Jul 20th 2020 at 5:02:06am