Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Krusher on February 16, 2004, 09:33:57 AM
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I sold my company stock to pay off a few debts. We still have about 2 grand left that I want to open some sort of investment account with.
Do any of you guys have any experience in online trading? Any recommendations on a online broker, or should I go with a financial planner?
I was going to put the extra cash in to a money market account and add about 100 dollars per month to the total. Eventually after we were a bit more comfortable (self education) with the workings of stocks and bond investments etc, I was going to start a small portfolio.
Any advice, tips or cautionary tales would be appreciated !
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I'd take a look at long-term "Growth" mutual funds if you plan to hold onto the earnings and investment for some time. You can pick up a Money magazine, Kipplinger or similiar publication and see how these mutuals perform over 6 mon., 1 year, 5 years, and inception dates. Then call and order a perspectice and take a look at what type of diversity they encompass within each fund and make your decision based on what your gut feeling that the market will be kind too (Medical , Technologies, etc.)
Focus on no-load funds with small account maintenance charges (Forget the term for the latter....)
Personally, anything a financial advisor can do for you, you can do it as well, and at less cost.
Adding monthly "payments" to these funds via a checking account automatically is a wise idea. Watch it grow, and start planning for early retirement. :aok
Here is something to ponder: Alot of baby boomers will be retiring in the next 20 years, and the medical field is an ever growing business, more so within the next 20 years due to the surge of boomers.
One more note: Best investment is the Kipplinger Letter. Order it, then study the market for a month or two, then make your decisions on what you've read.
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Just thinking out loud again.
If individually-purchased stocks interest you, some banks will have a minimum charge ($40-$50) for buying and selling stocks if you keep a certain balance with them. For instance, our bank, (BOA) requires a min. balance of $10,000, inclusive savings, checking, and Money market accounts, to be eligible for buying/selling stocks at a low one time fee. DOn't forget to set some of the money aside from selling stocks, to pay the capital gains tax at the end of the tax year.
Also, rather than tying up money in a savings account, consider opening a Money Market account, the interest rate is usually 2% higher than a savings account, although you are usally limited to minimum amount that you can withdraw at one time (BOA minimum withdrawl amount is $500) But usually if you're tapping into a savings account, its usually for a big ticket item, so meeting the minimum is not a problem.
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Forget all that.
You have a very small amount to invest and the most important thing for a risk adverse person like you is to diversify and keep you fees low.
Mutial funds are not the way to go with such a small investment.
But an index fund that tracks the NYSE. The fees and loads are small. You will get the same return as the market which if you look at most mutial funds is a pretty good record as most fail to consistantly beat the market.
Open an account with a discount broker. Go to thestreet.com and check out the ads there for one. Read that website everyday and you will soon get a good background in basic investing.
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You have a rather small amount. That severely limits your choice of investment options but also gives me some indication of your situation.
If you are just starting to invest, you should first direct the available funds towards safart - prevention of a financial disaster. Then you invest surplus money into reasonably safe growth and only after that you invest money into more risky but potentially more rewarding ventures.
I'd advice you to take $2,000 and buy 5 1-ounce gold coins as an insurance. Put them in to a safe-deposit box. The 4.5% comission you pay on purchase will be covered in 2 years by inflation that the equvalent dollar sum would suffer.
Any yearly interest income that you might lose, compared to depositing the money into the money-market account, just consider that your insurance premiums against the fall of the dollar.
miko
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Originally posted by Habu
But an index fund that tracks the NYSE. The fees and loads are small. You will get the same return as the market which if you look at most mutial funds is a pretty good record as most fail to consistantly beat the market.
Depends how you measure it. Since "inception of the stock market" vs 5 year return? Measuring any technology stock return to future earnings, from 1990 to 2000, can be decieving, considering the boom the technology stocks experienced during that time....
My Oakmark and Oakmark Select mutuals (with a minimum of $2000 that we invested 10 years ago) has done terrific. (32% in 10 years)
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Originally posted by miko2d
You have a rather small amount. That severely limits your choice of investment options but also gives me some indication of your situation.
If you are just starting to invest, you should first direct the available funds towards safart - prevention of a financial disaster. Then you invest surplus money into reasonably safe growth and only after that you invest money into more risky but potentially more rewarding ventures.
I'd advice you to take $2,000 and buy 5 1-ounce gold coins as an insurance. Put them in to a safe-deposit box. The 4.5% comission you pay on purchase will be covered in 2 years by inflation that the equvalent dollar sum would suffer.
Any yearly interest income that you might lose, compared to depositing the money into the money-market account, just consider that your insurance premiums against the fall of the dollar.
miko
Miko a guy with 2000 should not buy bullion. If you want to bet on gold buy an unhedged gold producer.
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Originally posted by miko2d
You have a rather small amount. That severely limits your choice of investment options but also gives me some indication of your situation.
If you are just starting to invest, you should first direct the available funds towards safart - prevention of a financial disaster. Then you invest surplus money into reasonably safe growth and only after that you invest money into more risky but potentially more rewarding ventures.
I'd advice you to take $2,000 and buy 5 1-ounce gold coins as an insurance. Put them in to a safe-deposit box. The 4.5% comission you pay on purchase will be covered in 2 years by inflation that the equvalent dollar sum would suffer.
Any yearly interest income that you might lose, compared to depositing the money into the money-market account, just consider that your insurance premiums against the fall of the dollar.
miko
If you're tempted by gold, don't go overboard. Gold is best used as insurance against a fall in the dollar or sky-high inflation. Gold investment will not make you rich, but its good for a diversified portfolio if you keep 5% to 10% of your portfolio — at most — in gold and rebalancing your portfolio regularly. If your gold fund has risen dramatically, it's time to sell, not buy.
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Originally posted by Ripsnort
Depends how you measure it. Since "inception of the stock market" vs 5 year return? Measuring any technology stock return to future earnings, from 1990 to 2000, can be decieving, considering the boom the technology stocks experienced during that time....
My Oakmark and Oakmark Select mutuals (with a minimum of $2000 that we invested 10 years ago) has done terrific. (32% in 10 years)
Oakmark select is a value fund and value funds have done well over the past 3 years. However the cycle of the market we are entering will see value funds do less well.
Oakmark is an excellent fund and if you had lots to invest you could put 20% in that fund and ride out the market swings. However with only 2,000 the smart play is just to pick an index (S & P or an NYSE index) and but the index fund. You will get the same return as the market guarenteed. Over the past 10 years that has been a good investment as well.
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Habu, I take it you do this for a living...
What do you think of small cap funds in this period we live in? I've had great success with small caps over the past year since investment, but I get gun shy now and then and like to pull some riskier investments back in before a downturn in the market. Should I keep my small caps going a bit or turn them over into something little safer?
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Actually I don't do this for a living. I do subscribe to James Cramer's private notification service where he sends an email every time he makes a trade in his portfolio and he explains what he is buying and why. He is one of the founders of thestreet.com and he also has a daily show on CNN called Kudlow and Cramer.
I have traded stocks for myself for years and also have a mutial fund portfolio as well as use a private investment service for my investments. I also have bought some real estate over the years (for pure investment purposes, not the family home). I believe in diversifying my risk. If my private investment management company has a bad quarter or two and I do well on my own it all cancels out. About 25% of my investments are in each vechicle. I am selling out the mutial funds to buy more land though.
In terms of performance my mutial funds have been the biggest disappointment. I am totally sold on index based investments though as a means to diversify.
Regarding small caps. I have been burned big time buying small caps and generally like to stay with large caps as they are what the big players are in. The problem with small caps is that they always have a bigger risk of going under or getting into financial problems due to thier size. The are less covered by analysists and they may be more volitile. Also you have to time the market cycles to get the big returns and that is very hard to do.
Right now my US portfolio is composed of these stocks.
ET
MU
USB
CVX
AES
DYN
CNXT
AA
PD
TYC
JDSU
EMC
DD
CHTR
I have been on holiday for the past week so I have to sell out a position or two and I have some new stocks to buy but that basket of stocks has returned 8% since Jan 1 this year.
I really like Alcola Aluminium and Philips Dodge (AA and PD) for the long term this year. Both are up big time over the past week though. I bought them early so they are now just over what I had paid for them. I believe that demand for commodities is going to be very strong this year especially copper and aluminium. The ecomomic cycle is in the begining of a phase that favors raw material producers. Already the raw material prices are going up and these two stocks are a good way to ride that wave. Manufacturering in China is really exploding and it needs to import lots of aluminium to keep up to demand.
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Thanks. My intuition suspects volitility in small caps in near future. I think its time for a transfer, get out while the getting is good.
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Blow the 2 grand on a new HDTV.
You will enjoy it and it will help the consumer spending figures.;)
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Originally posted by Curval
Blow the 2 grand on a new HDTV.
You will enjoy it and it will help the consumer spending figures.;)
hehe. I had similar feelings (different technology) right prior to investing in Microsoft stock in 1989....
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Thanks for all the tips guys :)
We always put off investing until we had more money. Like most procrastinators we just need to get started at any level.
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Originally posted by Ripsnort
Thanks. My intuition suspects volitility in small caps in near future. I think its time for a transfer, get out while the getting is good.
I have never been afraid to take a profit. Once you have made 25% or 30% take some money off the table, even if you think there is more upside.
Read thestreet.com though. I have always found that site to have excellent advice. I subscribe to the premimum services but they post almost all the same stuff on the free areas.
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Habu: Miko a guy with 2000 should not buy bullion. If you want to bet on gold buy an unhedged gold producer.
Who said anything about betting on gold? I was not talking about investemnt for profit but about investment for insurance.
In emergency situations shares in your name or other investments but portable unregistered gold coins would likely do you no good whatsoever or will be promptly confiscated by the government.
Ripsnort: Gold investment will not make you rich...
But nobody ever went broke buying gold. :)
but its good for a diversified portfolio if you keep 5% to 10% of your portfolio — at most — in gold and rebalancing your portfolio regularly
That's what I am saying - except I am advising to get that 5%-10% first and then amass the remaining 95%-90%.
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Update.
Since my last post I have sold off JDS Uniphase, Dish Network, AES, CNXT and took some profits in PD.
I have added Ingersol Rand, Dupont, DYN, Northern Telecom and El Paso energy. (Don't really know about EP as it has a pretty dodgy past, I may dump it). The portfolio is up about 11% from Jan 1.
USB
CVX
AA
PD
TYC
EMC
CHTR
EP
NT
DYN
DD
IR
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Originally posted by Habu
Update.
Since my last post I have sold off JDS Uniphase, Dish Network, AES, CNXT and took some profits in PD.
I have added Ingersol Rand, Dupont, DYN, Northern Telecom and El Paso energy. (Don't really know about EP as it has a pretty dodgy past, I may dump it). The portfolio is up about 11% from Jan 1.
USB
CVX
AA
PD
TYC
EMC
CHTR
EP
NT
DYN
DD
IR
You're doing better than I these first two months-- 8% gain.
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The market has been good so far this year. There is a rotation from high tech to industrials and raw material producers. They did not have the gains the techs did and now profits are being taken in the tech side and put into the "undervalued" areas of the market.
I was at about 8% gain at the start of the week but things kind of exploded as the week went on. Had two big days on Thursday and Friday.
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Don't listen to them, go to the track, put it on 100-1.
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If you had bought $1000.00 worth of Nortel stock one year ago, it would now be worth $49.00.
With Enron, you would have $16.50 left.
With Worldcom, you would have less than $5.00 left.
If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00.
Based on the above, my current investment advice is to drink heavily and recycle.
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Originally posted by Ripper29
If you had bought $1000.00 worth of Nortel stock one year ago, it would now be worth $49.00.
Lets see. Nortel was about .70 Canadian in Sept 02, now it is 10.70. So 10,000 would have bought you $15,000 Canadian dollars which would have bought you 21,500 shares give or take.
Today you would get 230,000 CDN or about 170,000 usd.
Not bad for a 1.5 year investment. Of course you spent the money on beer.
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Originally posted by Habu
Lets see. Nortel was about .70 Canadian in Sept 02, now it is 10.70. So 10,000 would have bought you $15,000 Canadian dollars which would have bought you 21,500 shares give or take.
Today you would get 230,000 CDN or about 170,000 usd.
Not bad for a 1.5 year investment. Of course you spent the money on beer.
Well it was meant as a joke, you know humor. Please accept this most heartfelt apology.
But your right in October 2002 it was worth 69 cents, less then 1% of what it was worth in July 2000 whn it was worth $124.50.
I prefer the beer... :D
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Porn is always a good investment...janet jackson is not
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Krusher...I noticed that you live in the Dallas area. Check out CompassBank, they have a new online investment thing going. Its pretty cheap and it lets you do real time trades or you can set it up to invest a set amount each week or month or whatever. Its really flexible.
http://www.compassweb.com and check out the ShareBuilder link.
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Last year I put 2k into stocks and added another 2k as the year progressed. I plan on adding 2 or 3 k this year and may put some into an IRA. My strategy was to (overall) buy and hold stocks that paid good dividends. My results were not to bad averaging about a 19 percent return.
Banking
NCC - even money (good dividend)
HIB - even money (nice dividend)
Oil and gas
PGH - went up 8 dollars (very nice dividend)
XOM - went up 4 dollars (good dividend)
gold
CEF - dropped 75 cents
Mutual fund
DNP - even money (very nice dividend)
Tech
IDWK.OB - went up 5 dollars - This one was kind of speculative
Anyhow thanks for the advice guys. If you have any new tips I would appreciate the advice
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Invest in lottery tickets!
dago:rofl
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Hindsight is 20/20 but you would have done quite well by simply purchasing Euro dollars or Sterling given the tumble the US $ has taken.
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Originally posted by Curval
Hindsight is 20/20 but you would have done quite well by simply purchasing Euro dollars or Sterling given the tumble the US $ has taken.
This is both a useless comment, "what you should have done" and just a slightly veiled shot demonstrating the enjoyment you get out of something negative about the US economy .
dago
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My two cents, assuming this is not money you'll be needing to cashout within the next few years,get into a good large family of no-load funds like T. Rowe Price, Fidelity, Scudder, Stein Roe (its been a while - some of these might have changed names or policies) that allow you to switch money between funds for no fee, put some money in a growth fund, a bit in asset/metal/inflation hedge fund like T. Rowe Price New Era, some in a money market or bond fund, and some in a large cap or index fund if the family has one. Every so often rebalance the portfolio by selling the funds that grew to buy the funds that didn't. Over time this will keep you diversified and you'll be able to benefit from appreciation of different sectors of the market. You might also consider putting some $ into a global or international fund as a dollar-drop hedge if the fund family has one.
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subscribe to standard and poors newsletter (S&P) i made thousands from their market tips.
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Originally posted by Dago
This is both a useless comment, "what you should have done" and just a slightly veiled shot demonstrating the enjoyment you get out of something negative about the US economy .
dago
And this is about the stupidest comment I've seen you post, demonstrating your ignorance.
I get paid in Bermuda dollars. The Bermuda dollar is on PAR with the US dollar. Every time the US dollar decends my earnings go down with it.
You think I enjoy this? What an idiot you are.
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Originally posted by Curval
I get paid in Bermuda dollars. The Bermuda dollar is on PAR with the US dollar. Every time the US dollar decends my earnings go down with it.
You think I enjoy this? What an idiot you are.
So your point was?
It's not exactly like you dont have a bit of an anti-US past on this board.
dago
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Yea right Dago...I'm an Ameristalker...beware Curval the Ameristalker....
:rolleyes:
This thread is a year old. My point was that Krusher put his money into stocks that paid him a 19% return, when he could simply have bought Euros and made quite a bit more. But, that is easy to say now given that, as I said in my post, that HINDSIGHT IS 20/20.
Infact a 19% return on his money is FANTASTIC given the market turmoil over the past year. If he can maintain that he should manage money for a living.
No real point...just commenting.
Of course your brilliant idea of buying lottery tickets was a very well thought out comment.:aok
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Originally posted by Curval
Y
Of course your brilliant idea of buying lottery tickets was a very well thought out comment.:aok
Well, the laughing smiley was a hint that I was joking. Hopefully you caught that.
dago
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One word, "Va-poo-rise".
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A year after this thread started ... but investments are forever.
For investment overview as well as particulars, Morningstar on line might have the most and best financial advice for the money, both for starters and veterans.
Diversification is essential.
No-load mutual funds are a good place to start after putting enough money in a tax-free money market or credit union to meet a couple months of expenses.
Always buy low and sell high. It sounds so simple, but ignoring this truism probably costs more people more money than any other single financial decision.
Index funds can be overrated -- many other funds consistently beat them.
Before you buy anything, decide at what point you will sell, i.e., when you will take your money and run.
The essential balance is return vs. risk. Morningstar bases its entire rating system on that.
Look into Morningstar. You can see and learn a lot for free, and if you decide to go full service, you'll be even better off.
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Originally posted by Krusher
I sold my company stock to pay off a few debts. We still have about 2 grand left that I want to open some sort of investment account with.
Do any of you guys have any experience in online trading? Any recommendations on a online broker, or should I go with a financial planner?
I was going to put the extra cash in to a money market account and add about 100 dollars per month to the total. Eventually after we were a bit more comfortable (self education) with the workings of stocks and bond investments etc, I was going to start a small portfolio.
Any advice, tips or cautionary tales would be appreciated !
If you havn't started a ROTH IRA for your retirement - the longer u wait the worse it is. Max contribution for this year is $3,000.
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2 words, "Warren Buffet"
He knows what he's doing.
And for god's sake, not "Jimmy Buffet"
Great songs, not much for investment advice
We own some of Buffet's stock, the other day it went up 50 bucks a share.
Tapakeg
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anybody can invest like Warren Buffet, just buy lots of blue chip stocks and sit on them for 30 years, and you can be rich also.
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Originally posted by Ripper29
If you had bought $1000.00 worth of Nortel stock one year ago, it would now be worth $49.00.
With Enron, you would have $16.50 left.
Admittedly I know very little about stocks and the market.
Tried to make sense of it once and only came to the conclusion it seems to make little sense at all LOL
But
With those stocks so low now wouldnt it be a good idea to invest in them now?
Enron in particular
On another Note
I have just over 10 Grand in a Vanguard Prime Money market fund
Any thoughts on this?
Leave it as it is for the next 20 years or should I do something else with it?
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Originally posted by Wolfala
If you havn't started a ROTH IRA for your retirement - the longer u wait the worse it is. Max contribution for this year is $3,000.
Do you think it is a better investment than my 401k? I already put 15 percent in and I may add another 5.
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look into convertable bonds.
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If it were me, I'd open an IRA. Sure, there's less potential for gain, but there's zero potential for loss. The money will be there when you need it most, retirement.