[surskis]

Hi,

What is this: I'm completely new to the whole investment, stock trading shebang. I will share my experience, thoughts, tools I'm planning to use, any books I read and any actions I do related to investment. Also I'll ask for advice. I'm planning to post monthly updates here.

Why: My income has surpassed what I really need to for a great lifestyle. Looking back for the past two years I've bought a lot of shit I absolutely don't need and wasted a lot of money on it, mostly because of psychological reasons (shopping gives as mood boost). It's time to think about the future and plan for new, less income dependant lifestyle. Rather than spending money on shit I don't need I will invest it.

Background:
I'm in my mid 20s, no wife, kids anytime soon.
No debt.
Own my apartment, car.
Monthly lifestyle expenses around 2000€ (travel, expensive clothes, food, shit I don't really need, etc.). Another 1000€ for fixed expenses (gas, utility bills, etc).
Monthly income ~15000€ after taxes
Business co-owner with two other partners. Growing business is my primary goal and a lot of profit is re-invested back for growth. This log will have nothing to do with my primary business.

Current plan (2015 01 14):
1. Register for virtual stock trading game. Trade for 1-3 months to get used to the concepts.
2. Look into exchange traded funds (ETFs) like Vanguard.
3. Look into index funds like S&P 500
4. Find other forums/resources for investment advice, especially for beginners.

--Early Spring
1. Register for real trading account with interactivebrokers.com with initial amount of 10000€ Platform is quite complicated so it will take some time to learn it.
2. Every month add around 5000€-10000€

[Simeon_Strangelight]

Here is what I wrote as a recommendation regarding Trading:

Before you start you've got to read the following books:
http://bclund.com/2012/03/13/20-books-ev...ould-know/

Most of these books can be bought at a pittance used or are even available in public libraries.

Then afterwards you have to find the trading style that fits your personality. Also after going through the books you will know much better, whether you have the ability to be a successful trader at all. 98% of people are not. You should not forget that you are trading not only against your own psychological nature, fears as well as the best and the brightest in the country on Wallstreet as well as plenty of automatic trading systems. The environment has become more difficult than ever. Though - to be fair, the competition is not in the form that anyone things of. 95% of Wallstreet traders would not be able to make money on their own. In effect your biggest competitor is yourself and your psyche, the market itself and your ability.

Thus after reading the books and some self-assessment you open an account and do plenty of virtual trading - many companies now offer those trial accounts. If you are somewhat successful, then you start with real life trading risking only miniscule amounts. 2.000$ is only enough for CFDs. And even then I would not risk more than 20$, which can be leveraged 10-100x depending on the instrument. Most long-term successful traders risk 1% of their equity in one trade, since trading is a high-stakes probability business. Depending on your personality it can be highly profitable or give you a solid income of 10% per annum. You will not be able to bend yourself to anything that is against your nature - meaning your personality and aptitudes will dictate what and how you trade best.

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Whether you trade Forex, stocks or commodities does not matter so much. The basic Trading ability is the same, but the capital requirements and speed are different, in order to have money-management & risk in control.

Also don't start trading before having read at least the Market Wizards series as well as the basic stuff regarding money management & some technical analysis. Next is virtual trading - when you make money off that, you start risking real capital - with Forex you can even start with 1000$ - if you can't make money off that, then you don't need to start with 100.000$.


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If you don't plan to make Trading your expertise or job, then it's better to just cherry pick good funds.

But even if you do that - reading those books will be helpful nonetheless.

[surskis]

Update 2015-01-15:
1. #1 priority is to read as many resources available online as possible, researching. Also start reading some books from the list in the link above (Link is broken, but you can Google it).
2. Opened very basic virtual account at investopedia.com investing only in ETFs, like S&P500, Vanguard Healthcare to track how they'll perform overtime.
3. Looking at popular ETFs a lot have recovered and are way above the price before 2008-2009 crisis (which is normal). But no plans to start investing any time soon, waiting for a crash/adjustment until I get more knowledge. In the meantime saving cash, will start saving 5000€ every month in savings account just not to blow it on crap. No plans to do active stock trading any time in the future.
4. Generating business ideas with a requirement that my time involvement would be minimal involving people I know:
A) Guy who is very good at construction and can quickly assemble 2-3 man team, doing basically anything construction related at cheap rates. Buying old real estate in good parts of the city and reconstructing it.
B) Guy who works but has a lot of free time and is looking for other business opportunities. Doesn't have any particular skills though.
C) Guy who opened gym with his partners. I live in a big city so this might be an opportunity to open another gym in the city having all the knowledge (profit rate, costs, etc).

Also some good investment advice I've found: Invest in yourself (education, health, looks, social connections), payout debts, business/work is the best way to generate substantial income (think 2-10x growth yearly until slows down).

[swiss rabbit]

As someone who traded for years, since age of 18, made a lot and blew an account, I can tell you the best thing to do is a passive strategy - investing in a mix of an equity index and bond index (S&P and 10-Year treasuries)....this is the most boring, you won't have any thrills from investing (which you shouldn't have anyways, investment utility is based only on risk and return), but you will over-time average a positive return of 6-9% with a volatility of 7-15% per year depending on your mix. Your risk/return ratio (Sharpe ratio) will be better than what most strategies will give you.

You can implement the strategy as well for the Euro market (Euro Stoxx 600 and German Bund)

[Yeti]

If you go with swiss rabbit's strategy, make sure to choose Vanguard. (If you want a company to make the investment decisions for you.) They are the best and lowest-cost for passive, long-term investment.