Investing for beginners

[Ingerdeere]

JasperFrank, you're dating yourself Mr. (Or Mrs.) Robinson. Good one.

 

[California]

Invest in something REAL - land, gold, silver, livestock, equipment, etc.

I'm sorting out the Lionel trains I got as a kid. With additions in the 80's when my kids were little, from a Lionel collector's club. I had assumed these are collectibles and what I paid back then would appreciate in value over the years, at least a little.

Nope. I see eBay prices today are the same $ as what I paid 30~40 years ago for clean used pieces. Considering inflation - today's dollar worth less in its purchasing power compared to back then - I've lost money on that 'investment'. Bah.

I've made money on rental real estate, where the income covered the payments so my holding cost was zero. By a simple method: Make a realistic estimate of what the place will sell for after cleaning it up, then hold for a few years expecting appreciation in overall RE prices. Then sell when it reaches the target price.

This method of making a future estimate can work for livestock you feed, and usually for land, but there's no reason for gold or silver to appreciate faster than inflation over the longest horizon. Scarcity of either isn't increasing fast enough to count on a profit. Equipment similar, there's a momentary scarcity today but I wouldn't calculate a future price based on this.

 

[marhar]

Can anyone recommend the best way to start investing for beginners? For example, opening an account with TD Ameritrade or Fidelity? Broad topic I know, just would like someplace to start. Thanks!

I agree with the poster that said first see if your employer has a 401k with a match; is so use it. If not, look at Vanguard index funds and open an IRA or Roth IRA.

 

[fruitcakesa]

We decided to be proactive in terms of investing and went the dividend stock route to provide a steady income in retirement.
It has netted us a solid 7-8% return over that last few years.
I realize that the market is always a risky bet but if you take the time to research the companies with a long and strong dividend history and solid fundamentals you can minimize the risks.
Sure, the market is up and down seemingly at random so the best advice is always buy and hold, this too shall pass.
My example:
My portfolio was flying high pre covid but crashed and burned post covid and it bottomed out at about 50% down.
I sold off all the dogs [a number of them stopped paying dividends] and others had lost most of their value. I figure I actually lost about $60K!!
2 years later, I have regained all the lost value and am ahead. All through this time I have been collecting my 8% dividend.
Not for the faint of heart but life is a risk in general so one may as well try and make it pay

 

[JasperFrank]

Mr. Maguire: There is a great future in plastics. Think about it. Will you think about it?
Benjamin Braddock: Yes, I will.
Mr. Maguire: Okay. Enough said. That's a deal.
From the movie The Graduate.

The easiest way for anyone to invest, is to follow any stocks I might suggest buying, and then immediately, Short Sell them.

 

[GeneV]

I dunno, but my 401k lately been looking like Rocky going into the first few rounds with Ivan Drago. Just a bit bruised so far, but damn where is this fight going!

 

[California]

I'm up about 18% for 2021, similar in 2020. See Fuddy's posts #120, 121.

 

[kenmac]

I dunno, but my 401k lately been looking like Rocky going into the first few rounds with Ivan Drago. Just a bit bruised so far, but damn where is this fight going!

IDK. It does get tough at times.. I'm hoping these new investments I'm in now will help during the rocky times !

 

[Doughknob]

I'm up about 18% for 2021, similar in 2020. See Fuddy's posts #120, 121.

Yep, I was up 20.1% for 2021, in my 401k. So far this year down 8.3%. Gotta keep looking long term........

 

[California]

Yep, I was up 20.1% for 2021, in my 401k. So far this year down 8.3%. Gotta keep looking long term........

Long term is all there is. Investing has to be thought of as enduring through a few market cycles.

It's no place to put money that you might need soon!

OP, are you still listening?

 

[Doughknob]

I did. 135 shares at $85.90 a couple of years ago.

Great! I can't say how many I have, but have been buying since 2009ish. It's been a hoot so far! I think they are going to split again soon, but who knows.......

 

[Fuddy1952]

A couple of things I find interesting. One is the 1961 "Mayberry" episode where Andy must evict Frank from his run-down house for non payment of taxes. Frank has very little belongings except he does have a $100
bond issued by Mayberry in 1861. The mayor says "so give him his $100". The problem is the bond has an interest rate of return of 8.5%. The Mayberry bank calculates cashing in the bond, now worth $349,119.27 which the bank has insufficient funds to cover. This illustrates time is key. Thirteen years later in 1974 the bond exceeds $1,000,000, and now the graph skyrockets.
The other interesting puzzle I remember in an old Farmers Almanac where two guys Bob & Jim each have $1,000 to invest for two years. Bob buys stock making 60% the first year and losing 40% the second while Jim puts his in a bank savings deposit paying 1%. Who made the most money? Logically you'd think Bob, except the first year Bob had $1,600 but then lost $640 so he had a $960 balance.
Meanwhile Jim has $1,020.10 after two years so Jim wins.
Yes, the market is volatile and not for the faint hearted or for short term. Over the long haul though, it wins out.

 

[Oaktree]

do u like any investment?

I have a good percentage of my net worth in the stock market. A few dogs, but some real winners too.
I tend to stick with established companies that are in relatively essential sectors, nothing speculative, nothing stratispherically priced. Maybe a little less potential gain, but a lot less volatility too.
Well, I do have some Facebook shares, but even after their recent collapse I'm still ahead. Undecided whether or not to bail on that one...

Normally that would be true. But Not right now. My local dealer says If I want to sell my tractors, he'll give me more for my two than I paid for them

Yeah, you've got a point there. Good time to sell a used vehicle of pretty much any sort, only trouble is if you need to replace it with something else it's gonna cost you.

 

[Fuddy1952]

Hard to beat mutual funds especially investing for beginners. Let the experts buy/sell and so many choices based on one's risk tolerance and goals.

 

[CalG]

I'm thinking of buying META (Facebook) It's down a bit atm.

Why not?

 

[California]

I'm thinking of buying META (Facebook) It's down a bit atm.

Why not?

Are you seeing articles like this, which describe why the stock is down? I would do some intensive research to decide whether I thought Facebook will ever recover its previous high P:E.

Mark Zuckerberg told Meta employees to zero in on video because they're up against an 'unprecedented level of competition' from TikTok, report says

Zuckerberg said Meta would focus on the short-form-video feature Instagram Reels, which closely resembles TikTok, after posting disastrous earnings.

www.businessinsider.com

And here's some raw 'market research' on Reddit.
In summary the younger generation is abandoning Facebook like they did prior similar sites.

https://www.reddit.com/r/technology/comments/skd6fh

One post in that thread, typical:

This is proof that Zuck doesn't get innovation. He had ONE great idea. Now, he's just trying to copy TikTok. Instead of copying, he should be trying to create the next best thing. By the time he catches TikTok, it'll be on the way out too. (Which, if Youtube cannot catch TikTok, Facebook sure won't)...
Sell Facebook stock. This is proof Facebook is on the road to joining MySpace in the grave.

I've never paid any attention to Facebook as an investor, or subscriber. This is not financial advice!

 

[CalG]

I'm only going on the adage of "When there is smoke in the air, and gun fire on the streets, BUY!"

It would seem that there is smoke in the air around META.

 

[Oaktree]

Are you seeing articles like this, which describe why the stock is down? I would do some intensive research to decide whether I thought Facebook will ever recover its previous high P:E.


And here's some raw 'market research' on Reddit.
In summary the younger generation is abandoning Facebook like they did prior similar sites.

I'm only going on the adage of "When there is smoke in the air, and gun fire on the streets, BUY!"

It would seem that there is smoke in the air around META.

There's the big question mark. Is Facebook/Meta going to come back or is this the beginning of the end? 'Most everyone who wants to belong already does, not much room for growth, and as someone else noted they seem to be a one trick pony. Every generation of young people wants their own culture, and when your grandmother is on FB, that kind of makes it uncool by definition.
Add to that the fact that their carte blanche to track users is coming to an end.
I don't really understand what this "metaverse" that Zuckerman is betting on even is, let alone whether it will save the company. Looks like his arrogance has started to backfire on him.

Sometimes stocks go down for a reason.

 

[kenmac]

I know many young people today just live for today. Gotta have that new vehicle, new watch, new tv, etc,etc.
I've had some tell me that they were going to begin investing in their company sponsored 401K when they got this ,or that paid off.

Then, the next thing you know, you see them with another vehicle, and claim when they get that one paid off, they are going to start.
Next thing they know, retirement is here and they didn't invest, or invested very little for their future. Saying, well, we had to live, so we just weren't able to save as we would have liked to.

Sort of reminds me of my parents. They lived for the moment. If you could make the payment go buy it.
For me, this mentally was difficult to over come. But somehow, I did, and I'm very glad I did.

 

[Oaktree]

I know many young people today just live for today. Gotta have that new vehicle, new watch, new tv, etc,etc.
I've had some tell me that they were going to begin investing in their company sponsored 401K when they got this ,or that paid off.

Then, the next thing you know, you see them with another vehicle, and claim when they get that one paid off, they are going to start.
Next thing they know, retirement is here and they didn't invest, or invested very little for their future. Saying, well, we had to live, so we just weren't able to save as we would have liked to.

Sort of reminds me of my parents. They lived for the moment. If you could make the payment go buy it.
For me, this mentally was difficult to over come. But somehow, I did, and I'm very glad I did.

Don't know how old you are, but I'm a boomer and I don't recall that many of my generation started thinking about saving for retirement until their late 30s/early 40s. I didn't really, though I've always been thrifty and lived well below my means.

As far as my parents, they grew up in the depression, and scrimping and saving was deeply ingrained in them. It was a bit easier for them because for a lot of their working years company pensions were still quite common, though in many cases they were self-administered so if the company went feet up, there went the pension fund. My parents were lucky enough that the company they worked for got bought out by a large company and both qualified for that company's pension plan. Of course with inflation, the monthly payout is pretty meager now.