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04-18-2007, 08:37 PM | #31 | |
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Rule No 1. Know what you know, and know what you don't know, or don't have time for. It's real money, and if you have no clue, or just want to fool around, then you'll get burned. Maybe I could be the next Michael Milken (without the break the law part) but I don't have the time or interest, so here's what I do: 1. I saved up enough and keep enough in regular boring savings accounts, CDs and bonds to cover several months of expenses. Hell, probably a year or two, with how cheap we are. This is mainly to appease my very conservative wife. 2. I max out my 401(k)/SARSEP. Investing through a 401(k) is the first and best place to sock away money for retirement. You can't beat the pre-tax investment that grows tax free for many years. If there's matcching from your employer, even better. 3. If money left after #2, and you still want to focus on RETIREMENT savings, then you want to go with an IRA, whether traditional or Roth. There's benefits and drawbacks to both, but you'll want to do one or the other, and max that out. 4. If there's still more to invest, or if you don't want to plow everything away until you're on Geritol, then you can either use others, or do a do-it-yourself way. The latter takes time, effort, focus, intelligence and resolve. If you're going to sell cuz the market has a bad month, then you need to let someone else do the work for you. Someone else in this case means, most likely, mutual fund managers. An index funds is typically best because they have lowr fees. The differnece between a 1% fee and 0.5 doesn't sound like much, but over 30 years it can make a big difference. You can also rely on brokers. My only advice here is to make sure that hte money is held by ANOTHER institution, and that you get or can access reports on how the account is doing from someone other than the broker. A secondary bit of advice is that you generally want the broker to take a percentage of the total amount invested, rather than make his money on a per trade basis. In the former situation, he wins if he makes your account bigger. In the latter, he makes money by churning stock -- that ain't so hot. Obviously, there's books galore on this. Others can do better with recommendations in that area than me. I have a systematic plan that works well for me and my family, but I don't read that much on it, and don't work too hard at it. I let people who are experts at what they do help me with it, while I do what I do best to make more money to invest. Good luck!
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04-18-2007, 08:40 PM | #32 | |
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04-18-2007, 08:53 PM | #33 | |
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04-18-2007, 09:00 PM | #34 | |
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Watch out for fees too, given the choice between two similar funds, take the one with the lowest expense ratio, because as as Amnoix mentions, a single point or two will add up over time. I don't like the idea of forking over 5% (or whatever the fee may be) to a investment guy, and immediatly starting off in the hole. With a very minimal amount of research, you can do just as well on your own as they would do for you. Always remember, even the best fund managers have a very hard time beating the market on a regular basis. Keep it simple. |
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04-18-2007, 09:04 PM | #35 |
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Id buy FRPT Force Protection, Nasdaq...They are about to start making some serious cash. They are in the business of MRAP vehicles as in the ones the US military is planning on paying out over a billion dollars for. I bought in at 3.60. It is now at 20.00 and on its way to 50 before the end of the year. All in my opinion of course but this is the gold standard for the new war on terror. They are also getting foreign contracts..(Iraqi Army, South Africa)
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07-02-2007, 08:48 AM | #36 |
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Capitol Gains Taxes for Dummies.
Lets say a guy invests in something. Lets say a year later, the guy can double his money and has reason to do so( buying house, starting business or whatever). How much of a clip will Capitol Gains take? Is there any legit way around it, for example like rolling that money into an IRA or something? |
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07-02-2007, 08:56 AM | #37 | |
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07-02-2007, 09:48 AM | #38 |
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Re-reading through this thread a lot of guys have good ideas and intentions with their investments. A lot of your theories go along with you personal risk tolerance. I see some pro Cramer and anti Cramer posts which is the norm when talking with people who believe in one investment theory over the other. I only caution people to look at who they take investment advice from. Brokers(commissioned based, not fee-based), insurance agents and even bankers need to be watched carefully. You have to weigh their motive to steer you into a particular investment.
Some good advice would be to read "A random walk down Wall Street" by Burton G. Malkiel. You will begin to understand the the pros really no nothing. The market acts and reacts in a way that can not be charted. I am strongly in the camp of simple investing. I only own three index funds that cover all of my bases to be diversified. My expenses are low and there is no need to constantly monitor my investment or worry about the ups and downs of the market. |
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07-02-2007, 10:07 AM | #39 | |
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In this case, we're talking an investment thats a little over a year and hasn't been movable until now. Our Concensus is that if we can't double our money, we'll keep it and ride the wave. I know there are some tax incentives for the next 2-3 years by keeping it.
I'm leaving my job, relocating and am looking to leverage the money I have to start a new business, buy a home, and or live until I get positive cashflow. Quote:
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07-02-2007, 10:17 AM | #40 | |
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07-02-2007, 10:25 AM | #41 | |
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I go about it a bit differently from your simple approach, I pretty much try to have a little bit in everything, but your way is great too if your 3 indexes cover it all. With broad diversification, I always have some funds that take off, some that stink, and overall its a net positive. I do both index funds and money managers, because there are some years where the money managers beat the indexes even with their fees. Domestically, I hit all 4 style corners with a lot of money in international funds. Since I am still young, I have it invested pretty aggressively without being stupid about it, in about 10 mutual funds. My current allocation: High Yield Junk Bonds: 10% Managed Large Value: 7.5% Managed Large Growth: 7.5% Index Large Core: 15% Managed Mid/Small Value: 7.5% Managed Mid/Small Growth: 7.5% Index Mid/Small Core: 15% Managed International Equities: 10% Managed International Emerging Markets: 10% Index International: 10% Nothing in there is safe, no bonds (junk bonds arent safe), no CD's, etc because with a 30+ year time horizon, I have absolutely no need for safety now. If the market tanks, thats a buying opportunity for me. No one can predict what's going to do well in a given year, this year the international funds kicked ass, but next year it might be the small caps, or value stocks, or whatever, so I want a little bit of everything. I wish my 401k had a REIT option or an international bond, I may buy a little of that in an IRA. To the OP: one guy I listen to regularly is Ray Lucia, who has the most popular money-oriented talk show in the country, probably because he's also not incredibly boring to listen to. If you cant catch his radio show, download his podcasts and listen to it for a couple weeks, he's also got a couple good books.
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07-02-2007, 10:33 AM | #42 |
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Alnorth,
Glad you are into investing and looking out for your financial future. You seem to know what you want out of your investments and that is the biggest battle. I tend to only use the three funds I do because after doing a lot of research over a 20-60 year time period(which is the timeframe I am investing for. I am 26 and won't need this money until I retire which I hope is around 55-60)no actively managed fund has EVER beaten the S& P 500 index fund. That is not to say actively managed funds are junk. Far from it. They just don't meet my needs or comfort level for what I am trying to achieve. I am on track to accumulate around 6 million by the time I reach 69 1/2. This is only through investing in index funds. I don't own real estate(besides my house which I don't consider an investment) or individual stocks. As I get older I will reallocate some of my holdings but not many. It is investing on autopilot. I have good years and bad years, but overall I am doing well. |
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07-02-2007, 10:47 AM | #43 |
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CPA....
You've got a pm, explaining my situation a little better. This is not a publicly held traded investment, and I can offer my stocks with a floor on what I'll take, which is how am fairly confident I can double my investment...or keep it. In short, I've got 3 pools of money to make my move/business with.....this investment, savings and CDs, or money invested in mutual funds. I don't claim to know as much about investments and invidual funds as many of you, however there are several things about this market, and the level of the market now that make me nervous....short term. |
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07-02-2007, 10:56 AM | #44 | |
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07-02-2007, 11:06 AM | #45 | |
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For short-term, its hard to beat CD's and money market mutual funds, absolute safety at about 4-5% right now. The risk of the market is nearly eliminated by broad diversification, and by time. As people get close to retirement, they need to pull maybe 15 years worth of money into safety, and let the rest stay in the market to grow to make sure their retirement income can get a bump every few years to stay ahead of inflation.
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