Best wayt to invest $20K+?

[JS80]

Originally posted by: IHateMyJob2004

Originally posted by: Lothar
You have 2 options...
Buy 22,700 shares of Freddie Mac or buy 20,400 shares of Fannie Mae.

And loose it all. Lothar, you are a bright investor. But FRE and FNM are to be avoided. You should really leave those entities to the amateurs.

"An investment operation is one which upon thorough analysis promises safety of principle and an adequate return. Operations not meeting these requirements are speculative."
Security Analysis 1934

Lothar's an idiot. FNM and FRE? Laugh. OP should be buying LEH on margin. He will triple his money in a month.

 

[imported_Lothar]

Originally posted by: JS80

Originally posted by: IHateMyJob2004

Originally posted by: Lothar
You have 2 options...
Buy 22,700 shares of Freddie Mac or buy 20,400 shares of Fannie Mae.

And loose it all. Lothar, you are a bright investor. But FRE and FNM are to be avoided. You should really leave those entities to the amateurs.

"An investment operation is one which upon thorough analysis promises safety of principle and an adequate return. Operations not meeting these requirements are speculative."
Security Analysis 1934

Lothar's an idiot. FNM and FRE? Laugh. OP should be buying LEH on margin. He will triple his money in a month.

Obviously you're an idiot who has the reading comprehension skills of a 2nd grader.

 

[sciencewhiz]

Originally posted by: FFactory0x

Originally posted by: johnjbruin
If you are looking long term - i.e. greater than a year or two years, this is probably the best time to get into some of the equity indices, both US and international ETFs.

Can this be done through Vanguard?

Vanguard has a broad variety of mutual funds and ETFs that cover the US and international equity markets with low fees. Here's a select few:

The Total Stock Market index (VTSMX) has an expense ratio of 0.15% and covers the entire market (small through large cap, value and growth), with over 3000 stocks and follows the MSCI US Broad Market Index
The 500 Index (VFINX) has an expense ratio of 0.15% and covers the S&P 500 (large cap)
The Total International Stock Index (VGSTX) has an expense ratio of 0.27% and covers Europe, the Pacific, and emerging markets.

They have many more, but that covers the basics.

 

[ponyo]

Originally posted by: JS80

Originally posted by: IHateMyJob2004

Originally posted by: Lothar
You have 2 options...
Buy 22,700 shares of Freddie Mac or buy 20,400 shares of Fannie Mae.

And loose it all. Lothar, you are a bright investor. But FRE and FNM are to be avoided. You should really leave those entities to the amateurs.

"An investment operation is one which upon thorough analysis promises safety of principle and an adequate return. Operations not meeting these requirements are speculative."
Security Analysis 1934

Lothar's an idiot. FNM and FRE? Laugh. OP should be buying LEH on margin. He will triple his money in a month.

Can you even buy LEH on margin? Trash like FNM, FRE, and LEH have 100% margin requirement. But just because it's trash doesn't mean you can't make money. Even garbage is worth something. Ask Waste Management.

 

[imported_Lothar]

Originally posted by: Naustica

Originally posted by: JS80

Originally posted by: IHateMyJob2004

Originally posted by: Lothar
You have 2 options...
Buy 22,700 shares of Freddie Mac or buy 20,400 shares of Fannie Mae.

And loose it all. Lothar, you are a bright investor. But FRE and FNM are to be avoided. You should really leave those entities to the amateurs.

"An investment operation is one which upon thorough analysis promises safety of principle and an adequate return. Operations not meeting these requirements are speculative."
Security Analysis 1934

Lothar's an idiot. FNM and FRE? Laugh. OP should be buying LEH on margin. He will triple his money in a month.

Can you even buy LEH on margin? Trash like FNM, FRE, and LEH have 100% margin requirement. But just because it's trash doesn't mean you can't make money. Even garbage is worth something. Ask Waste Management.

I see what you did there.

 

[sciencewhiz]

Originally posted by: IHateMyJob2004
Diversity is the safety net for hte investor that doesn't know what they are doing. Typically a sign that they should not be buying individual stocks.

Unless you have inside information (illegal) or a great gut feel (Lynch, Buffett), you should not be buying individual stocks.

Originally posted by: IHateMyJob2004
Case in point, I'd more than happily dump everything into BRK

BRK is much more diversified then someone investing in almost any other company. Since you have Buffet at the helm (see above), it may not be a bad choice. But what happens when he retires?

 

[imported_Lothar]

Originally posted by: Epic Fail

Originally posted by: EKKC

Originally posted by: Lothar
You have 2 options...
Buy 22,700 shares of Freddie Mac or buy 20,400 shares of Fannie Mae.

FTW!
Although may I suggest you diversify that portfolio with a mixture of both Fannie and Freddie, with a side dish of Lehman.

Lehman is looking really good now with another 50% off today, unless you think it will go under.

Lehman is dead.
You're better off hiding the money under your mattress than investing in them.

 

[imported_Lothar]

Originally posted by: sciencewhiz

Originally posted by: IHateMyJob2004
Diversity is the safety net for hte investor that doesn't know what they are doing. Typically a sign that they should not be buying individual stocks.

Unless you have inside information (illegal) or a great gut feel (Lynch, Buffett), you should not be buying individual stocks.

There's nothing wrong with picking individual stocks.
Diversification is nothing but a Jim Cramer buzzword.

Makes absolutely no sense.

 

[Special K]

Originally posted by: Lothar

Originally posted by: sciencewhiz

Originally posted by: IHateMyJob2004
Diversity is the safety net for hte investor that doesn't know what they are doing. Typically a sign that they should not be buying individual stocks.

Unless you have inside information (illegal) or a great gut feel (Lynch, Buffett), you should not be buying individual stocks.

There's nothing wrong with picking individual stocks.
Diversification is nothing but a Jim Cramer buzzword.

Makes absolutely no sense.

If you're confident that anyone can consistently outperform the market in the long term by picking individual stocks, then why do so many professional mutual fund managers perform so poorly? Heck, even hedge funds implode, although you don't hear as much about their performance in general because they are not required to disclose it to the public like mutual funds are.

How can someone who does not work in the financial industry hope to outperform the market in the long term by picking individual stocks when you have an army of analysts whose full-time job is to analyze company stock? Heck, even they don't always get it right.

If you are confident you can consistently outperform the market in the long term by picking individual stocks, then why not become a fund manager? You could make a killing

That's why I am attracted to index funds - I just don't see how I can compete with people whose full time job is to analyze securities. The fact that the majority of them still cannot beat the market after fees in the long term isn't too encouraging either.

 

[ponyo]

Originally posted by: Special K

Originally posted by: Lothar

Originally posted by: sciencewhiz

Originally posted by: IHateMyJob2004
Diversity is the safety net for hte investor that doesn't know what they are doing. Typically a sign that they should not be buying individual stocks.

Unless you have inside information (illegal) or a great gut feel (Lynch, Buffett), you should not be buying individual stocks.

There's nothing wrong with picking individual stocks.
Diversification is nothing but a Jim Cramer buzzword.

Makes absolutely no sense.

If you're confident that anyone can consistently outperform the market in the long term by picking individual stocks, then why do so many professional mutual fund managers perform so poorly? Heck, even hedge funds implode, although you don't hear as much about their performance in general because they are not required to disclose it to the public like mutual funds are.

How can someone who does not work in the financial industry hope to outperform the market in the long term by picking individual stocks when you have an army of analysts whose full-time job is to analyze company stock? Heck, even they don't always get it right.

If you are confident you can consistently outperform the market in the long term by picking individual stocks, then why not become a fund manager? You could make a killing

That's why I am attracted to index funds - I just don't see how I can compete with people whose full time job is to analyze securities. The fact that the majority of them still cannot beat the market after fees in the long term isn't too encouraging either.

"If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that." Warren Buffett

Biggest advantage individual investor have is size. Be nimble, avoid the "herd" mentality, and with little luck, outperforming fund manager isn't that hard. I trust my instinct over some fund manager.

 

[Oceandevi]

AMD stock

 

[imported_Lothar]

Originally posted by: Special K

Originally posted by: Lothar

Originally posted by: sciencewhiz

Originally posted by: IHateMyJob2004
Diversity is the safety net for hte investor that doesn't know what they are doing. Typically a sign that they should not be buying individual stocks.

Unless you have inside information (illegal) or a great gut feel (Lynch, Buffett), you should not be buying individual stocks.

There's nothing wrong with picking individual stocks.
Diversification is nothing but a Jim Cramer buzzword.

Makes absolutely no sense.

If you're confident that anyone can consistently outperform the market in the long term by picking individual stocks, then why do so many professional mutual fund managers perform so poorly? Heck, even hedge funds implode, although you don't hear as much about their performance in general because they are not required to disclose it to the public like mutual funds are.

How can someone who does not work in the financial industry hope to outperform the market in the long term by picking individual stocks when you have an army of analysts whose full-time job is to analyze company stock? Heck, even they don't always get it right.

If you are confident you can consistently outperform the market in the long term by picking individual stocks, then why not become a fund manager? You could make a killing

That's why I am attracted to index funds - I just don't see how I can compete with people whose full time job is to analyze securities. The fact that the majority of them still cannot beat the market after fees in the long term isn't too encouraging either.

You asked this same questions months ago in another thread and I already answered them.

All the more reason to do your own research and pick your own. No fees or expenses.
One does not need to work in the financial industry to be able to pick good stocks.

 

[JS80]

Originally posted by: Lothar

Originally posted by: JS80

Originally posted by: IHateMyJob2004

Originally posted by: Lothar
You have 2 options...
Buy 22,700 shares of Freddie Mac or buy 20,400 shares of Fannie Mae.

And loose it all. Lothar, you are a bright investor. But FRE and FNM are to be avoided. You should really leave those entities to the amateurs.

"An investment operation is one which upon thorough analysis promises safety of principle and an adequate return. Operations not meeting these requirements are speculative."
Security Analysis 1934

Lothar's an idiot. FNM and FRE? Laugh. OP should be buying LEH on margin. He will triple his money in a month.

Obviously you're an idiot who has the reading comprehension skills of a 2nd grader.

lol ur sarcasm meter is broked

 

[Special K]

Originally posted by: Naustica

Originally posted by: Special K

Originally posted by: Lothar

Originally posted by: sciencewhiz

Originally posted by: IHateMyJob2004
Diversity is the safety net for hte investor that doesn't know what they are doing. Typically a sign that they should not be buying individual stocks.

Unless you have inside information (illegal) or a great gut feel (Lynch, Buffett), you should not be buying individual stocks.

There's nothing wrong with picking individual stocks.
Diversification is nothing but a Jim Cramer buzzword.

Makes absolutely no sense.

If you're confident that anyone can consistently outperform the market in the long term by picking individual stocks, then why do so many professional mutual fund managers perform so poorly? Heck, even hedge funds implode, although you don't hear as much about their performance in general because they are not required to disclose it to the public like mutual funds are.

How can someone who does not work in the financial industry hope to outperform the market in the long term by picking individual stocks when you have an army of analysts whose full-time job is to analyze company stock? Heck, even they don't always get it right.

If you are confident you can consistently outperform the market in the long term by picking individual stocks, then why not become a fund manager? You could make a killing

That's why I am attracted to index funds - I just don't see how I can compete with people whose full time job is to analyze securities. The fact that the majority of them still cannot beat the market after fees in the long term isn't too encouraging either.

"If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that." Warren Buffett

Biggest advantage individual investor have is size. Be nimble, avoid the "herd" mentality, and with little luck, outperforming fund manager isn't that hard. I trust my instinct over some fund manager.

OK, let's ignore the expenses. I know that some funds become so bloated that it becomes difficult for them to move into and out of positions.

How much time do you spend per day analyzing securities? I'm just saying I don't feel too confident when analysts who spend 80+ hours/week doing it can't even consistently get it right.

What information do you have that they don't?

 

[Modular]

Index funds are so 1994. You need to actively monitor your funds and build an appropriately diversified portfolio in order to make money/hedge your position. Index funds can't do that (obviously).

 

[Special K]

Originally posted by: Modular
Index funds are so 1994. You need to actively monitor your funds and build an appropriately diversified portfolio in order to make money/hedge your position. Index funds can't do that (obviously).

Why do you say you can't have a diversified portfolio with index funds? By buying a total stock market index and a total international market index, you can be very diversified. Additional diversification can be achieved by adding a REIT fund.

Also please tell how you are able to pick winning actively-managed mutual funds in advance.

 

[sciencewhiz]

Originally posted by: Naustica
"If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that." Warren Buffett

Biggest advantage individual investor have is size. Be nimble, avoid the "herd" mentality, and with little luck, outperforming fund manager isn't that hard. I trust my instinct over some fund manager.

Don't forget he also said "But it's true. I could name half a dozen people that I think can compound $1 million at 50% per year -- at least they'd have that return expectation -- if they needed it. They'd have to give that $1 million their full attention."

Are you one of those 6 people? How much time do you really have?

 

[ponyo]

Originally posted by: sciencewhiz

Originally posted by: Naustica
"If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that." Warren Buffett

Biggest advantage individual investor have is size. Be nimble, avoid the "herd" mentality, and with little luck, outperforming fund manager isn't that hard. I trust my instinct over some fund manager.

Don't forget he also said "But it's true. I could name half a dozen people that I think can compound $1 million at 50% per year -- at least they'd have that return expectation -- if they needed it. They'd have to give that $1 million their full attention."

Are you one of those 6 people? How much time do you really have?

I don't expect 50%. I've 2 goals every year. Not to have a negative year and to outperform the market and the index. You don't need to babysit your investments unless you're a trader. I spend about an hour or two a day looking at financial stuff. But I enjoy it and it's a hobby so it's fun for me.

 

[Jack Ryan]

Originally posted by: FFactory0x
So I am 25 and have a really good job at the moment where I am making approx $100K this year with it increasing steadily each year.

Right now I have about $20K in cash sitting in my bank account and wanted to do somethign with it.

I have 0 debt and my cost of living can easily be covered by my monthly paycheck with a lot left over.

I am owed about another 17K from my job in back commision which again will just keep increasing each month.

Can you guys recommend some options?

Well, you must be smart or well connected. Either use your brains and don't and an internet forum for investing advice, or ask your well connected family/friends for what they do.

 

[ModerateRepZero]

I'll give you a piece of advice I give some other people: read "The Intelligent Investor" by Benjamin Graham. You aren't guaranteed the ability to earn money, but I think it's safe to say that if you follow the principles in the book (such as having a certain "margin of safety"), you're almost certain not to lose your entire investment (over an extended period of time, anyway).

And to Special K: one of THE biggest advantages an individual investor has that a fund manager or other established group doesn't is the patience to wait for a big, fat softball pitch. If the investor is happy enough to avoid losing money on an investment, and hits the equivalent of a few singles per year, they're not going to be taking as big of a risk, and potentially lose their shirt, as a fund which aims to swing for the fences AND at every pitch.

If you invest starting early and over an extended period of time, steady gains add up if you reinvest the gains and you're not "in the hole". If your concern is on costs and reducing your risks in exchange for a reasonable expectation of protecting your investment from catastrophic losses, what's so bad about this mentality and approach?

 

[AlienCraft]

Originally posted by: FFactory0x

Originally posted by: johnjbruin
If you are looking long term - i.e. greater than a year or two years, this is probably the best time to get into some of the equity indices, both US and international ETFs.

Can this be done through Vanguard?

Soak it in a Planned Retirement date account and get back to work.
Vanguard rocks these.

 

[jupiter57]

Alright!
You've gotten the best advice ever from the financial experts here at ATOT.
We'll be looking forward to you & 98% of these other posters next week asking where is the cheapest place to buy Ramen Noodles!

 

[imported_Lothar]

Originally posted by: Special K

Originally posted by: Modular
Index funds are so 1994. You need to actively monitor your funds and build an appropriately diversified portfolio in order to make money/hedge your position. Index funds can't do that (obviously).

Why do you say you can't have a diversified portfolio with index funds?

Also please tell how you are able to pick winning actively-managed mutual funds in advance.

It's not that hard.
I have set rules in place along with a "gut" feeling.

Ex:
1.) Management must have been running fund for 5 yrs.
2.) Management must have a substantial of their net worth in such an investment.
3.) Expense ratio must be 1% or less.
4.) Look at the top portfolio holdings. Very important.
5.) Herding mentality. See Naustica's post.
6.) Low portfolio turnover.
7.) And many more...

That's why we're in Fairholme and Vanguard Wellington. I'd take those two actively managed funds over any particular index fund any day of the week.

 

[jfall]

Personally, I'd put most if not all of it in Visa shares and sit on it for a few years

 

[imported_Lothar]

Originally posted by: ModerateRepZero
I'll give you a piece of advice I give some other people: read "The Intelligent Investor" by Benjamin Graham. You aren't guaranteed the ability to earn money, but I think it's safe to say that if you follow the principles in the book (such as having a certain "margin of safety"), you're almost certain not to lose your entire investment (over an extended period of time, anyway).

And to Special K: one of THE biggest advantages an individual investor has that a fund manager or other established group doesn't is the patience to wait for a big, fat softball pitch. If the investor is happy enough to avoid losing money on an investment, and hits the equivalent of a few singles per year, they're not going to be taking as big of a risk, and potentially lose their shirt, as a fund which aims to swing for the fences AND at every pitch.

If you invest starting early and over an extended period of time, steady gains add up if you reinvest the gains and you're not "in the hole". If your concern is on costs and reducing your risks in exchange for a reasonable expectation of protecting your investment from catastrophic losses, what's so bad about this mentality and approach?

"Bolded" and italicized for emphasis.

Most funds aim to make 10% every year for the next 30 years.
I only aim for a 10% annualized compounded return over 30 years.
Whether my investment is down -20% one year and up +40% the next year makes little difference to me.

However, to a fund manager, it makes A LOT of difference.
If your fund is down -20% one year while the market is up, people will yank their money out forcing you to liquidate and possibly change or reverse gears.