[Sonsowey]

I am in my 20s and have no investments. What resources are a good beginners guide for beginning to make my money work for me?

I am not looking to become a day trader, there are many people out there much more into stocks than me, being that I do not know a lick about them. Getting into that game at this point seems like bringing a knife to a gun fight. I just want some stable long term investment strategies to plan for my future.

[Antares]

I just read Rich Dad Poor Dad. It had some good information. Im currently reading The Little Book of Value Investing, it has some interesting points as well. I, like you, am also just starting out and that is where i started.

Also, the Stock Market thread in this forum has some good information.

[Seadog]

The gold standard is the Intelligent Investor. Benjamin Graham.

The other thing, as a newbie, probably just get index funds. As broached in the above book, very very few ppl can beat the market long term, so until you think your even close to that point (ie after years of research) the best work/reward witll come from index funds. Little work, average reward. Another suggestion, is read these books, research, put real money in index funds, and play fantasy stock market with the same amount. See how you do.

I never liked Rich Dad poor dad. Some OK advice, but he come's off as a bit of a shyster, a lot of his story was apparently made up, and I still take issue with his comment that a house isn't an asset. (Well GAAP disagrees with you, but no matter, you have a book!)

[jamaicabound]

I posted this in the stock market 2014 thread the other day but I've been watching this guy on youtube lately called bullandbearreport. Maybe not everyone would agree with his theory on the current market but he talks in plain english and explains the markets and reasoning behind movement. I know many people are gloom and doom he seems to say as long as government pumping fake money keep investing. Checkout his channel and see what you think...

http://www.youtube.com/user/bullorbearreport

[one-two]

Common questions on /r/personalfinance. They even have a FAQ about it.
http://www.reddit.com/r/personalfinance/...mmontopics

[polymath]

I would probably buy investment-grade bonds, or a basket of dividend-paying blue-chip stocks.

If you don't have much edge on other people in the market in terms of knowledge, skill, and information, then you shouldn't take significant risks. Instead, it's probably wiser to go for investments with lower yield, but higher safety.

Truth be told, it's probably more fruitful for you to reduce costs than to generate investment returns. Buy cheaper food, spend less when you go out, etc...these can make a difference too.

Does your work offer you a retirement plan? That's a really spectacular way of getting into the markets. You get tax benefits, the money goes into your retirement savings directly, and many employers offer you the opportunity to buy in to mutual funds managed by professionals.

[sammybiker]

@sonsowey, what are you goals here? Retirement income in 30-40-50 years? Passive income asap? What are you trying to achieve?

[monster]

Get a free account at freestockcharts.com and add a few names you know to your portfolio and just start tracking them and drawing lines on the charts with the tools. Soon you'll get interested and dig around looking for answers to your questions (hopefully)

[jay27]

Educate yourself with a few good books: A Random Walk Down Wallstreet and I Will Teach You To Be Rich (Ramit knows what he is talking about despite the cheesy title) are my suggestions. After reading and digesting you will know what to do.

[Richiavelli]

I would highly advise not to read rich dad poor dad.

Instead, learn personal finance. Dollar cost average the market if you do not understand stocks (schx or Spy tickers).

[Richiavelli]

Wallstreetplayboys.com has everything you need for personal finance.

[jamaicabound]

(10-03-2014 11:11 PM)Richiavelli Wrote:  

Wallstreetplayboys.com has everything you need for personal finance.

Is this your personal blog your pumping? It's actually kind of interesting I'll probably give it a read but I'm seeing articles about protein powder and picking up chicks and the investment articles seem to be kind of vague. I think the OP is looking to learn basic investing concepts, strategies, tools, to have funds or stocks suggested to look into, etc.

[Ensam]

I believe WSP is the blog of WestCoast who is taking an indefinite hiatus from the forum.

In terms of resources I really like everything written by William Bernstein. He gives a pretty solid foundation for understanding a few basic and sound investing strategies. Edward Thorp is another good asset but he's less accessible. Thorp is interesting because he has a history of being able to exploit markets while being an outsider.

[Richiavelli]

It is not my blog. They did a post on investing and frequently post solid advice. I also recommend financialsamurai.com.

I used to want to pick stocks, but both resources have changed my perspective on money and investing.

[Dusty]

If you are investing for your retirement, I would buy low cost index funds in these categories:

x% S&P 500
x% Small cap value
x% REITs
x% International
and maybe a little Emerging Markets (5% or less).

Then never touch them for 30-40 years, except to add to it and rebalance annually.

And reinvest your dividends (very important!).

[Earl Grey]

(10-02-2014 07:00 PM)Seadog Wrote:  

The gold standard is the Intelligent Investor. Benjamin Graham.

The other thing, as a newbie, probably just get index funds. As broached in the above book, very very few ppl can beat the market long term, so until you think your even close to that point (ie after years of research) the best work/reward witll come from index funds. Little work, average reward. Another suggestion, is read these books, research, put real money in index funds, and play fantasy stock market with the same amount. See how you do.

I never liked Rich Dad poor dad. Some OK advice, but he come's off as a bit of a shyster, a lot of his story was apparently made up, and I still take issue with his comment that a house isn't an asset. (Well GAAP disagrees with you, but no matter, you have a book!)

This.

Also, I recommend you read the following book by Dr. William Bernstein:

http://www.amazon.com/If-You-Can-Millenn...+bernstein

[robreke]

(10-01-2014 08:33 PM)Sonsowey Wrote:  

I am in my 20s and have no investments. What resources are a good beginners guide for beginning to make my money work for me?

I am not looking to become a day trader, there are many people out there much more into stocks than me, being that I do not know a lick about them. Getting into that game at this point seems like bringing a knife to a gun fight. I just want some stable long term investment strategies to plan for my future.

Time is totally on your side. Do this - Read the Richest Man in Babylon. Then, save 10% of everything you earn. Do you have a job that offers a 401k? Fund at least 10% of your income in there and they will match. If you don't have a 401k.....open an IRA account and fund it with 10% of everything you earn every month. This is important -Set up your 401k, IRA and/or regular brokerage account on AUTOMATIC Pilot. that is, have the money draft automatically out of your checking account each month. Don't say to yourself, "I'll write a check each month" Trust me, you won't.....it's just human nature. Do it on autopilot/ autodraft and thank me when you retire comfortably. If the IRA limits ( $ 5000 a year ) is less than 10% of your income open a regular brokerage account for the overage.
Here's what to invest in - blue chip STOCK mutual funds....do not invest in bonds. It doesn't matter if the market crashes once or two or three times before you retire because it is so long off. At this point , you're accumulating shares....you're not so worried about the dollar amount now. Do this starting now and you will be so far ahead of most 40 - 45 year olds when you turn that age that it won't be funny. Keep doing this the rest of your life until retirement.
Then, if you have more disposable income....you can take on riskier ventures such as individual stocks, real estate, etc. Also...don't run up any debt unless it's GOOD DEBT .....GOOD DEBT are things like low interest rate mortgages to buy a house or maybe ....just maybe a 0% interest rate loan to buy a car ( basically free money ) No credit card shit, furniture or TVS on credit....EVER!
I'm a financial advisor and advise people on this all the time. This is just a great and easy foundation to almost insure a prosperous future. Don't over think it and read all these fancy trading books and to get cute with stock trading. I'm not saying that's wrong to do.....it's only wrong to do as your primary strategy. First, take care of the basics as I've laid out above. Then, as I said, with the disposable stuff when you're earning more in late 20s and into 30s....you can do this other riskier stuff.

[tdawg]

Keep it Simple Stupid

Back in 1990 I bought the book "Personal Finance for Dummies," which is about the least common denominator among books in the entire universe of financial services. It is also among the best. Eric Tyson.

I appreciated the advice in the book but I did nothing. NOTHING.

OK, so in 300 some pages he explains that it all pretty much boils down to buying Vanguard 500 VFINX, as that was the fund with the best performance and lowest cost in 1990.

http://finance.yahoo.com/echarts?s=VFINX...X;range=my


Let's set the range for Jan 1, 1990, when I read the book, to this date. almost 25 years. What is the total return? 487%. Now, let's say that I had a combination of IRAs, etc. that allowed me to contribute a constant $6000 per year tax sheltered over this whole time period.

How much money would I have today?

[Rawmeo]

I actually enjoyed Wall Street Playboys, I read a lot of posts on that site and found it informative.

[Sonsowey]

I am mainly trying to invest for retirement many years down the line, long long term.

One thing is I believe the stock market etc. is a giant scam. I have no real trust in it. Many people say buy index funds and leave them alone for decades. I honestly feel no reason to believe these index funds woll be there when I am 80. It seems crazy. "Give us your money dont worry about it and in 50 years I will give it back with some interest, hopefully."

Seems like a fools game, what if there is a financial crash, what if a company I invest with goes under, what if the U.S. government changes laws on taxes, federal backing of financial institutions, etc.

Seriously though, what if I buy an index fund and the market does poorly. I simply lose my money right? What if I buy aj index fund.and the company I biught it with goes bankrupt?

[Sonsowey]

To the poster above talking about the fund with a huge consistent return:

Hindsight is 20/20. The next 25 years may be different. At the time in 1990 I am sure there was a ton of conflicting advice, picking the guy who happened to make a good prediction does nothing to help someone decide what to do now.

If you are aware of a fund that will give 500% returns over the next 25 years, I would love to hear it, I am sure everyone would.

[The_CEO]

1. A Random Walk Down Wall Street, by Burton Malkiel, is an excellent investment primer. It explains the basics of stocks, bonds, and mutual funds, and will reinforce the efficient market concept.

2. Common Sense on Mutual Funds. Replaces Bogle on Mutual Funds, by who else, John Bogle. It provides as much detail as you could ever want about this important investment vehicle. Mr. Bogle is the founder and retired chairman of The Vanguard Group, and has been an important voice in the industry for decades. Beautifully written, opinionated, and highly recommended. (The book also demonstrates the democritization which has swept the investment industry in recent years. Until a decade ago the sort of sophisticated mutual fund analysis described in his book was the brief of just a handful of professionals with access to expensive proprietary databases and mainframe computers. Almost all of Bogle�s work was done with a subscription to Morningstar and a statistically competent assistant, and could have been performed by any small investor with similar software and ability.)

3. Global Investing, by Roger Ibbotson and Gary Brinson. This is a beautifully written volume on the history of investible assets. An informed investor cannot know enough about market history, and this is the best single source in this area. Want to know: what the returns for US stocks have been in each of the past 200 years? The price of gold for the past 500 years? Interest rates and inflation for the past 800 years? It�s all here. As implied by the title, the authors also provide an excellent perspective on the place of foreign assets in a diversified portfolio, and provide some worthwhile insights on portfolio theory and the efficiency of the marketplace.

4. What Has Worked in Investing is a free pamphlet from Tweedy, Browne. A low-key sales pitch for their funds, it is also the best compilation I've seen of the data supporting the value method.

5. The New Finance, the Case Against Efficient Markets, by Robert Haugen. If you�re intrigued by the Tweedy pamphlet and wonder why value investing still works after all these years, this is your book. The prose is breezy, even quirky�Ben Graham meets Hunter Thompson on bad acid.

6. Value Averaging, by Michael Edleson. An extremely useful how-to guide on deploying a lump sum of money among multiple assets. Finally back in print as a Wiley Classic Edition.

7. The Intelligent Investor, by Ben Graham. A popularized and more readable version of his earlier classic, Security Analysis, written with David Dodd. Although it has great relevance to the markets in general and should be read by any serious investor, it is particularly pertinent to those who feel compelled to buy individual stocks. Many of today�s most successful money managers obtained their original financial inspiration from these two books. It is always fun to look at excesses in the marketplace and ask, "What would Ben say about this?" This 2003 edition benefits from annotation by one of finance's most brilliant observers, Jason Zweig. (By the way, if you get bitten by the Graham bug and decide to do Security Analysis, make sure you read the original 1934 edition, recently reprinted by McGraw-Hill.)

8. Devil Take the Hindmost, by Edward Chancellor. You simply can't learn enough about market history, and Chancellor's story of boom and bust in the capital markets, beginning in the 17th century, is pure mind candy. Supersedes Mackay's Extraordinary Popular Delusions and the Madness of Crowds.

9. The Millionaire Next Door, by Thomas Stanley and William Danko. If you can't save, it doesn't matter if your name is Warren Buffett. If you think the road to happiness runs past a Beemer and a McMansion, this book will scare you straight.

10. Asset Allocation, by Roger Gibson, covers much of the same ground as my own books with more emphasis on the qualities of individual assets. For hard-core enthusiasts only; oriented towards the financial advisor.

[From William Bernstein's site]

[Respectabull]

If you are just starting out, I would recommend a top-down approach. You can pick some of the best stocks, but if you don't know which way the markets are headed you'll get royally screwed. Maybe invest in an ETF that mirrors the S&P 500, it's not going anywhere. Watch the markets on a macro and global level for a long time. Research on strategies that can beat the broader markets, seasonality performance, and other simple tips and tricks. The Halloween indicator is a great one to play with when you are first starting out. Then very slowly, begin to work these strategies investing in particular sectors. If you get comfortable with larger macro level changes, then begin to dabble with individual stocks that can benefit from these larger events and patterns. Check out the stock trader's almanac and I am also a big fan of the Kirk Report.