Thu 15 Jun, 2006 11:36 am
Have been gradually increasing my investment and finance knowledge over the years and consider myself a mere layman in this area. But the time has come for me to move to become an "advanced intermediate" investor. So far my investments have not required much more than a little investment knowledge since my investments have not involved anything more complicated than mutual funds (The highest risk is a REIT fund). Soon I am going to try to raise the "alpha generator" component of my portfolio so I now need some advice.
Recommendations for finance and investment terms and strategies, web sites or books would be helpful. Also any experiences that you have had with and recommendations for discount online brokers would be greatly appreciated. Before I tie up 50 large to set up a brokerage account like TD's Ameritrade I would feel more comfortable with a year of self education and dry runs under my belt.
I sort of struggled alone through our retirement portfolio investments from early in our marriage, and by luck and good timing have accumulated enough to retire in comfort. We had investments in more places than I could manage intelligently, but the overall performance was good enough for us. Late last year, I consolidated our investments into all Vanguard Funds with the assistance of their investment counselor. We were doing gang-busters until the market drop during the past several weeks - but the market seems to have recovered quite well during the past two trading days.
The long-term performance of the Vanguard Funds is over 9 percent/year, so I feel pretty secure in our present portfolio.
Without debt or a mortgage, we're doing pretty well.
Long term? Like 10 years?
Remember, past performance is no guarantee of future performance.
Miller, Anybody that has any experience in investing knows that there is never a guarantee of any return, and could even lose most of our investment. We also know that unless we have some faith in the US and world economy, there is no sense in making investments. If the world goes into a depression, everybody loses, but that likelihood is too small to worry about. At my age, that's the least of my worries.
On the other hand, keeping your money under your mattress is possibly the most stupid strategy for saving money. I'll take my chances in our diversified funds with Vanguard.
How is your comment related to my above post?
Thanks for the web site; Fidelity is, along with Vanguard, a much respected institution when it comes to mutual fund performance. I think it, along with Morningstar's and some others, will be very helpful.
About a year ago I consolidated my portfolio by moving it all into Vanguard Funds for two reasons: ease of transferring between Vanguard's large offering of funds and their ability to keep their administrative costs low. Last year I received slightly over a 30% return via Vanguard's REIT fund. As the return indicates this is much riskier than a simple Index Fund and therefore I only have a small amount of my portfolio equity so involved. Due to possible Greenspanian "Froth" I don't expect this sector to generate the same return over the next year but I still think I can squeeze a fairly good return to justify the risk, at least for another year (This REIT deals with commercial real estate rents and leases and not residential values which seem to be slowing but not declining--just yet).
My time horizon is about 7 years with the bulk of my portfolio. I am comfortable taking on more risk but only if I educate myself as to a specific stock's value (or more to the point: over or undervalue). As you see I am interested in investing in specific or individual stocks--risky business indeed. I want, like everyone, great above average returns before Congress repeals the Capital Gains tax. I will accept the high risk only after I have whittled it down as much as I can by educating myself and done some actual research and dry run trades. Investing in the stock market may be considered a "crap shoot" by some but it doesn't have to be. If the casino analogy is to be applied-- I am not interested in plunking down 50 grand on red and spinning the roulette wheel, I want to learn how to count cards and then sit down at the Black Jack table and make some money.
Cigars, cigarettes, P/E ratios anyone? But what the Hell are they and what about all the other terminology? Thanks for you help so far it is really appreciated.
7 years could be a bit tricky, considering what the market is presently doing and the uncertainty of world affairs.