Investment philosophies

[Oberon]

We all have twenty-four hours in a day - no more, no less. And not one of us can increase it by a minute by investing.

True... but we can increase the degree of satisfaction we derive from those 24 hours in many ways, and investing is one of these.

 

[rav3n]

I agree with diversification, balance, and wisdom. I also agree that it is easy to overpay for "negligible services". Note I say Low Expense Ratios.

Even no-load funds have their hidden costs, costs that aren't divulged in their prospectuses.

I used to invest in individual stocks. I used to spend a lot of personal time and energy on it - following these individual companies - analyzing the financials, etc. A good friend of mine who is in the investing business basically told me I was gambling.

It depends on how you're zeroing in on which companies to invest in. There's no surefire way but relying on promoted research data immediately puts you behind the pack, since once it's publicised to the average consumer, buy-siders have already had their pick.

He recommended investing in index funds. I should have taken his advice.
Yeah - it's boring.

Perhaps so, perhaps not. Index funds are trendy and I avoid anything that's trendy, unless it's for short-term gains which means, in and out quickly with reasonable levels of returns. If you're the type to hold on for dear life waiting for maximum gain, you're going to get stiffed more often than not.

You accumulate wealth through discipline of saving, living below your means, avoiding debt and compounding of your investment over time. You can also be an entrepreneur.

There is some of this but solely doing this over a lifetime isn't going to get you much return.

 

[InvisibleJim]

We all have twenty-four hours in a day - no more, no less. And not one of us can increase it by a minute by investing.

Your statement doesn't say anything about increasing the quality of those minutes. Infact if you have to pay for medical, clever investing can extend the number of minutes also.

 

[1487610420]

Given the various options, anyone has any views regarding initial low amount and investment type, for beginners?

 

[The_Liquid_Laser]

My view is that this is probably not a good time for new investors to enter the market. Buy bonds or other investments instead.

 

[highlander]

I agree when it comes to personal finance, disagree when it comes to business finance (esp. if you can manage to found a limited liability company).

Yes, I agree with that.

i diversify modestly, but my long term goal is to build concentrations.
i never invest in businesses i don't know, and never ever use my
feelings. ever. when investing i strictly stick to data and reasoning.
it doesn't come naturally, so i surround myself with the best at
what they do. that's how i eliminate self doubt--there's no
place for it. being wrong is inevitable, but you
can eliminate self-doubt by self-educating.

i also invest invest locally, regionally and internationally.

Excellent advice.

Even no-load funds have their hidden costs, costs that aren't divulged in their prospectuses.

It depends on how you're zeroing in on which companies to invest in. There's no surefire way but relying on promoted research data immediately puts you behind the pack, since once it's publicised to the average consumer, buy-siders have already had their pick.

Perhaps so, perhaps not. Index funds are trendy and I avoid anything that's trendy, unless it's for short-term gains which means, in and out quickly with reasonable levels of returns. If you're the type to hold on for dear life waiting for maximum gain, you're going to get stiffed more often than not.

There is some of this but solely doing this over a lifetime isn't going to get you much return.

You suggest many things not to do but I'm not sure what you think should be done.

I recommend reading The Millionaire Next Door and/or The Richest Man in Babylon.

You might consider tracking your investments as carefully as you can. Figure out your ROI in ten years (maybe even 5). Compare it to the major indexes. Good luck!

 

[rav3n]

You suggest many things not to do but I'm not sure what you think should be done.

What I do, doesn't mean that everyone can, should or will do. It's up to the individuals to decide their risk tolerance and appropriate investment strategies.

I recommend reading The Millionaire Next Door and/or The Richest Man in Babylon.

So you read it in books, therefore, it is and will always be exactly as such? And that what you've read in these books are exactly what each individual has done?

You might consider tracking your investments as carefully as you can. Figure out your ROI in ten years (maybe even 5). Compare it to the major indexes. Good luck!

I do, have done and will continue doing. Been investing for over 15 years. But thanks for the obvious considering...

 

[highlander]

What I do, doesn't mean that everyone can, should or will do. It's up to the individuals to decide their risk tolerance and appropriate investment strategies.
So you read it in books, therefore, it is and will always be exactly as such? And that what you've read in these books are exactly what each individual has done?
I do, have done and will continue doing. Been investing for over 15 years. But thanks for the obvious considering...

Actually, there are flaws in the books but the fundamental premises are reasonably sound. There is overall good advice there.

I'm still not sure I understand what you are suggesting one should do (other than consider their risk tolerance and developing an appropriate investing strategy).

So I'm curious - what kind of return are you averaging then over those 15 years?

 

[rav3n]

Actually, there are flaws in the books but the fundamental premises are reasonably sound. There is overall good advice there.

Did you notice what I had said about your suggestions of debt management and frugality, that it should be part of but not all of your strategy?

I'm still not sure I understand what you are suggesting one should do (other than consider their risk tolerance and developing an appropriate investing strategy).

What I would strongly suggest is that people learn more about the market, finance and economics, prior to entering the market so they can slowly develop their own personalised investment strategies. I sincerely detest the "if you do this, you'll get rich" quick schemes, "if you read this, you will be an expert on investing" or "I'm a broker, listen to me" garbage. Have known many retail brokers and most are full of crap. Have read a few "recommended" novels from "investment experts" or "I'm wealthy because I do this" and have also found them full of standard knowledge, some common sense but no real substance.

So I'm curious - what kind of return are you averaging then over those 15 years?

This is my business. I do okay.

 

[1487610420]

Did you notice what I had said about your suggestions of debt management and frugality, that it should be part of but not all of your strategy?
What I would strongly suggest is that people learn more about the market, finance and economics, prior to entering the market so they can slowly develop their own personalised investment strategies. I sincerely detest the "if you do this, you'll get rich" quick schemes, "if you read this, you will be an expert on investing" or "I'm a broker, listen to me" garbage. Have known many retail brokers and most are full of crap. Have read a few "recommended" novels from "investment experts" or "I'm wealthy because I do this" and have also found them full of standard knowledge, some common sense but no real substance.
This is my business. I do okay.

I understand what you mean, and while I have not experienced this with the specific context of investment, I reckon it to be a common fallacy, biproduct of the social mob mentality of the world we live in.

When you say business, do you mean you a broker or do you perform and keep track of investments for yourself as your primary means of income?

 

[highlander]

Did you notice what I had said about your suggestions of debt management and frugality, that it should be part of but not all of your strategy?
What I would strongly suggest is that people learn more about the market, finance and economics, prior to entering the market so they can slowly develop their own personalised investment strategies. I sincerely detest the "if you do this, you'll get rich" quick schemes, "if you read this, you will be an expert on investing" or "I'm a broker, listen to me" garbage. Have known many retail brokers and most are full of crap. Have read a few "recommended" novels from "investment experts" or "I'm wealthy because I do this" and have also found them full of standard knowledge, some common sense but no real substance.
This is my business. I do okay.

I agree with you on the get rich quick schemes and I don't think I said that frugality and debt management should represent all of your strategy.

I've gravitated towards a simple approach of reasonable portfolio diversification and funds of different types with very low expense ratios. Getting that mix right is what a lot of people mess up on. I know I did. I've read lots of books - The Intelligent Investor, All of Peter Lynch's Books, The Warren Buffet Way, Psychology of Smart Investing, on and on and on. I dissected balance sheets and income statements and cash flow statements. I analyzed ratios and comparative industry data. No more. A good financial planner can help me come up with a reasonable portfolio mix with a periodic check up, i can get fund info from Morningstar, and keep a simple mix of funds - US large, mid, and small cap, international bond, emerging markets, etc. Then there's some real estate and maybe a little precious metals. I can spend a few hours a month instead of fifteen hours a week (which is what I did for a time).

I'm not an expert on investing, never will be, and don't try and beat the market. Maybe that's a personalized strategy.

 

[highlander]

I hear dartboards work too.

 

[Frank]

My current investment philosophy is around resources. Commodities that society needs regardless of how deep a recession the global and national economies endure. It's the best hedge I can currently see against the evolving economic situations and the greedy, crooked f---s who are "fixing" the problems.