Investing Advice for a Noob
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re: Investing Advice for a Noob
Posted by foshizzle on 2/2 at 7:36 pm to tirebiter
quote:

although low cost has proven to be the most consistent and effective quantitative factor that investors can use (ex-ante) to noticeably improve their odds7, it does not, by itself, guarantee success


In liquid markets it's the number one factor and takes basically no time at all. Any Joe Schmo can do a basic version, just buy the Wilshire 5000 and move on. If you're feeling more advanced, throw in some international indices, maybe some bonds too. But it takes basically no time at all and you can move on to whatever else you do for a living, confident that you will do better than most actively managed portfolios.

Are there better choices if you want to spend more time? Sure. Invest in something where you genuinely know more than everyone else, like local real estate or your brother's business. The risk is higher too but you can capture something from knowing more. Goldman Sachs doesn't have anyone assigned to cover the house down the street, but you might be able to make something off it.

But unless you have a net worth in nine figures or so there isn't much point in trying to eke out an advantage by researching well-covered investments in highly liquid markets. That's a game for the big boys.



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Posted by Ace Midnight on 2/3 at 9:04 am to foreverLSU
quote:

Sorry I should have been more specific. I would put the $2500 in an IRA and leave it alone. The other $5500 is what I'd like to invest to put towards a down payment on a car.


I thought that's what you meant. I would stay the heck away from individual stocks without a much deeper understanding. Researching mutual funds is much easier. There are nearly an infinite number of options and figuring out the loads, historical rate of returns, what sectors you want, risk, is much, much easier than the legwork needed to understand the variables associated with a individual stock offering, much less picking one that is correct for your situation.



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Posted by RickAstley on 2/4 at 4:54 pm to Vols&Shaft83
I opened this thread thinking it was worth 4 pages of discussion on a noob level. I don't think I made it 1.5 pages in before I was lost. Can anyone hit the highlights of the last 3 pages and keep it dumbed down so a noob can understand? I am trying to learn the ins and outs brought to light in this thread, but my background isn't geared towards the level of discussion that this thread reached.

This post was edited on 2/4 at 4:57 pm

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