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Stock Market
So I believe I might start investing again in some Individual stocks. Since we are still in a bull market I think I might dive in the market again. I have not been completely out, I still have a retirement and IRA accounts which I invest roughly $ 950 month combined . The main reason that I have been holding off investing is because I have been doing my best to get out of debt. So with in a few months I think my first step will be investing in the tech sector. I am mainly looking for growth stocks. Any recommendations in this sector, or in the bio tech/ pharmaceutical sector would be appreciated.
Thanks.
Hope everyone is doing well with there investments this year.
My best investment this year is my child’s 529 YTD 18.75% -
8 Replies
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1) if you want to invest in a few things “for fun” – this is the way to go. Rather like picking horses (and – btw – I lost ~ $100 this weekend doing that).
2) If you want to make money – this is not the way to do it.Nearly 10 years ago Berkshire Hathaway CEO (and arguably one of the best investors on Earth), Warren Buffett, issued a challenge to the hedge fund industry a $1 million bet that they could not put together a portfolio of hedge funds that would outperform an [link=https://www.cnbc.com/quotes/?symbol=.SPX]S&P 500 Index fund[/link] over a 10-year period.
Buffett was convinced the combination of active stock-picking and high costs would result in lagging market performance, and he was willing to put his money where his mouth was.
One company stepped up to the challenge. Protégé Partners LLC selected five hedge funds (the names of the funds have not been disclosed publicly), and Buffett selected the [link=https://www.cnbc.com/quotes/?symbol=VFIAX-O]Vanguard Admiral Shares S&P 500 Index Fund[/link].Hedge funds vs. index fund The 10-year period began January 1, 2008, which means we are in the final year of the challenge. While we don’t know the funds selected by Protégé, we do have a nine-year performance update and it’s not pretty.
The hedge fund portfolio is up just 22 percent over nine years. That’s slightly better than 2.2 percent per year. How did the S&P Index fund do? Oh, just a smidgen better. It’s up 85.4 percent, or 7.1 percent per year on average. The results by fund are even more startling:
[link=https://www.cnbc.com/2017/08/09/buffett-challenge-hedge-funds-vs-index-funds-9-years-on.html]https://www.cnbc.com/2017…-funds-9-years-on.html[/link]
what’s more – the BEST hedge fund of the five was up 62% vs. the index fund 85%. THE BEST HEDGE FUND WAS WORSE THAN THE INDEX FUND. The others, of course, were worse. MUCH worse.
I know, I know, we are all creatures of intellect, and think that there is a way to reason through this and pick good stocks. I have picked a few, and then a lot I picked lost. After multitudes of hours, spreadsheets, complicated formulae to predict the future, I gave up. Things like the DOJ suing Microsoft, and causing it to lose 50% of its value nearly overnight, I found were inherently unpredictable. I gave up.
Save your time, save your money – give up now. Rip Van Winkle it – put your money in, go to sleep for 30 years, and when you wake up, you can retire with more than adequate money.-
of course, you can play games with this to project.
Using the 7.1% return that the index fund got
take a certain amount, invest it in the index fund and do the same amount every year for 30 years- what do you wind up with??
$10,000 becomes $961,775
$20,000 => $1,923,549
$30,000 => $2,885,324
$ 50,000 => 4,808,874
$100,000 => $9,617,747
Now there are infinite numbers of ways to play this game with numbers.
I would imagine you have of 401k, and maybe get roughly $40k or so per year put in there. That is a good head start, but likely not all you will need.
CAVEAT: Do not neglect to always keep in mind that that $10m isn’t REALLY $10m – the government gets ~15-40% of it, unless it is in a Roth.
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Still have not dived into individual stocks mainly because I am not making as much money and the other reason is I am still in debt a little bit. The stock that I was looking at has gone up almost 30$ per share. I will be patient and wait for my opportunity when I have a little more money. I will still try to land a part time job on the side at that should help.
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Quote from Phil Shaffer
I would imagine you have of 401k, and maybe get roughly $40k or so per year put in there. That is a good head start, but likely not all you will need.
these are probably not realistic numbers for 99% of the population. $40k a year into a retirement account is a lot.
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I have a 403b and only can put about 9-10k in per yr. Max is 18 or 24k depending on your age. I don’t know where you get 40k per yr. My employer puts 6% of my current salary towards my 403, so that is still not even close to 40k. I’m not a MD only a R.T.
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I would be more interested to see what would happen if the 2008 crash was in the middle.
Here’s a question for you: If it’s that easy for everyone to invest in indexes, why isn’t everyone rich? Hint hint, it’s why I’m interested in the first question.-
when you have people who don’t make enough money to live on how do they invest? There’s news around that say a lot of people don’t even have a thousand dollars in their bank account.
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[link=https://www.bloomberg.com/news/articles/2022-10-24/china-markets-set-for-cautious-start-after-leadership-overhaul]Xis Power Grab Spurs Historic Market Rout as Foreigners Flee[/link]
[link=https://www.cnbc.com/2022/10/24/us-listed-chinese-stocks-drop-after-beijings-power-reshuffle-makes-the-market-uninvestable.html]U.S.-listed Chinese stocks drop 15% after Beijing’s power reshuffle makes the market ‘uninvestable'[/link]
[link=https://www.cnbc.com/2022/10/24/us-listed-chinese-stocks-drop-after-beijings-power-reshuffle-makes-the-market-uninvestable.html][/link][link=https://www.cnbc.com/quotes/PGJ/]The Invesco Golden Dragon China ETF,[/link] which tracks the Nasdaq Goldman Dragon China Index, plunged 14.5% to hit its lowest level since 2009. The ETF slumped more than 20% at one point Monday. The index holds 65 companies whose common stocks are publicly traded in the U.S. and the majority of whose business is conducted within the Peoples Republic of China.
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