Topic: Investors thread

[Kong]

I don't want to sound like the anti-tooth-farrie, but you can't even buy into most mutual funds with a grand, most require $2500 or more to start.  However most also allow a smaller amount to be initially invested, some as low as $50, providing a regular monthly addition is made in some minimum amount, once again sometimes as low as $50.   Put it in a fund that tracks the Standard and Poor's 500 index and then sit back and contribute for the next 20 years.  Do not pay a bit of attention to the day to day market.  You'll do just fine.

I'm not going to spend a minute trying to explain the concept, but it doesn't make a hoot in hell what happens to the US economy or the US worker, US businesses will continue to do just fine and their results will be reflected best in the S&P.   I'm not saying this as a jingoistic notion either; I'd give the same advice to anyone anywhere in the world.

[FrankenFrankenstuff]

"jingoistic" I think I owe KONG 10 cents for teaching me a new word

[the technological J]

"jingoistic" I think I owe KONG 10 cents for teaching me a new word

lol me too had to google it!

[climbingaz]

I've got to preface my post by saying this isn't a recommendation to buy or sell any security or a solicitation of specific financial advice, but I'm a CFP.  I've been in the business for over 14 years and have a degree in Finance.  If you guys have any general questions I might be able to answer for you, please feel free to fire away.

[the technological J]

I've got to preface my post by saying this isn't a recommendation to buy or sell any security or a solicitation of specific financial advice, but I'm a CFP.  I've been in the business for over 14 years and have a degree in Finance.  If you guys have any general questions I might be able to answer for you, please feel free to fire away.

you could address the opening post

[climbingaz]

I've got to preface my post by saying this isn't a recommendation to buy or sell any security or a solicitation of specific financial advice, but I'm a CFP.  I've been in the business for over 14 years and have a degree in Finance.  If you guys have any general questions I might be able to answer for you, please feel free to fire away.

you could address the opening post

How much knowledge and/or experience would you say you have investing in stocks?  And on a scale of 1-10, what would you say is your risk tolerance? 

[the technological J]

prob 1 i havnt had a chance to dive into it yet but this is the first step in my research.. im prob a year away or so from an actual investment.... and as far as my risk tolerance..im guessing thats how much risk im willing to take.. with this money im looking for the best safe bet but im also looking for other possible investments

[climbingaz]

prob 1 i havnt had a chance to dive into it yet but this is the first step in my research.. im prob a year away or so from an actual investment.... and as far as my risk tolerance..im guessing thats how much risk im willing to take.. with this money im looking for the best safe bet but im also looking for other possible investments

There isn't such a thing as a best "safe bet".  If you want something truely safe, your talking about money markets, CD's, etc. that are currently paying less than 1% per year.  If you think you could stand a moderate level of risk, you might want to look into a low cost, no-load index fund that tracks the overall stock market or the S&P 500.  This is assuming you first have (1) an adequate emergency fund and (2) very little to no consumer debt such as a credit cards, car loans, etc. with high interest rates.  And don't be afraid to seek the advice of a professional in your area if you need some help.  You can do a search at  http://www.cfp.net/search/

[the technological J]

right now im paying 2 car payments and a home payment all interest rates are very (very) reasonable and through a credit union.... we have about a month and a half to 2 month emergency fund zero credit card debt... but thats why im a year away i should have a nice emergency fund by then... but there are sacrifices to be made for the future and i think should be considered... if i put a investment first and some drinks or moto parts (terrible i know) after that then priorities are priorities..... but i want things like profit from selling a moto or tax rebates or just the extra money we've earned to got somewhere responsible and i didnt think a savings account is the way to go... so research research research on the best investment

[climbingaz]

right now im paying 2 car payments and a home payment all interest rates are very (very) reasonable and through a credit union.... we have about a month and a half to 2 month emergency fund zero credit card debt... but thats why im a year away i should have a nice emergency fund by then... but there are sacrifices to be made for the future and i think should be considered... if i put a investment first and some drinks or moto parts (terrible i know) after that then priorities are priorities..... but i want things like profit from selling a moto or tax rebates or just the extra money we've earned to got somewhere responsible and i didnt think a savings account is the way to go... so research research research on the best investment

Sounds like you are on the right track!  We usually like to see the emergency fund be somewhere in the neighborhood of 3-6 months expenses.  And that is just so you don't have to raid your investment account should something unexpected come up.  And nothing wrong with a mortgage payment...I've got two.  And as long as the car loans are at reasonable interest rates (less than 6%), no problem there although I'm a big fan of paying cash and buying low mileage used vs. new cars.

So yes, you are ready to invest.  Take advantage of any retirement plans you might have at work (especially if there is any type of matching employer contribution).  Then do a google search for no-load index funds as a start.  Many have very modest minimums and consider doing an automatic investment of $50 or $100 per month straight from your checking or saving account.  Think of it as a bill each month that you have to pay!  And I would discourage you from investing in any individual stocks right now.  You need to get your feet wet first and learn a little about the market before jumping in the deep end. 

[Joe Lawrence]

   Buffets company Bershire hathaway has returned ...ON AVERAGE................22.9% PER YEAR since inception in the early 1950's.  There is no close second.

  No need for mutual funds and esp. no need for financial planners 99.97% of whom are mere salespeople peddling load (hi up front commissions) mutual funds and who are only interested in their commssions. 

  Next time someone tries to sell you their investmant garbage, ask em why not Buffets company.........then watch the reaction.  Answer is because your investemnt guy makes no comission if you buy into Buffet.

  And almost never, never, ever buy annuity.  Annuites are 100% about how much commission the salesperson makes.   And NEVER, NEVER NEVER, EVER buy an annuity in a retirement account like an IRA or a 401k

  I know Ill get alot of flack on this..............but this solid investment advice.  And I have nothing to sell and probably more fin. experience than everyone combined on this MB.  Not knocking you guys though.  Well almost as much combined      Real investemnt money is made slowly and over a lifetime.

  Also, if any so called financial planner, rep, etc.  from an insurance. company comes calling ... run for the F'ing hills......

   Investing is not about how nice your fin. planner person is.  Fin planners are worse than car sales people and if the planner is a friend or relative............tell em thanks but no thanks.

   

[Joe Lawrence]

   Also Uncle Ernie has the right idea.

   Others mentioned paying off CC debt first..also a great idea...along with a 6 month cash fund on hand at all times

   Read a few others that i can't recall that are also good..I think someone mentioned market index funds....good idea too

   Sorry ,but i wasnt trying to brag in above post, but I have seen so many people ripped off by investment planners that I get PO'ed easily whenever the topic comes up...and the worst part is the people love their planner.  It's kind of like Congress...everyone hates Congress but they love their congresman.

  Now what I really need is not 31 more years of financial experience, but some MC engine re-building experience.   

[Bob Wessner]

.. who are only interested in their commssions.  

Not sure I would go so far as to say there are NO good financial planners, but I would agree you definitely do not want one who works on commission. He/She is making money churning your investments. There are ways to research and select a decent planner. Oh, and Berkshire Hathaway is what, about $95,000 per share??  

[Uncle Ernie]

Took the words right out of my mouth;
Who the heck can afford even ONE share of Berkshire Hathaway stock?

[climbingaz]

Sorry guys, but I've got to take issue with a bunch of what Joe Lawrence has said about the financial planning profession.  Some of his points have some merit, but he's a little behind the times on other issues.
 
1)  Should everyone invest in Berkshire Hathaway because of Warren Buffet?  Absolutely not!  Does Joe realize that good 'ol Warren is 80 years old and has already begun the process of choosing a successor?  Warren had a great run, no doubt, but past performance is not necessarily indicative of future results....especially when you've got someone new running the ship.  The other issue is that investing in Berkshire Hathaway is primarily an investment in the stock market.  This may or may not be appropriate for you depending on how much risk you feel comfortable taking or your time frame.  For example, would a recently widowed 70 year old whose in retirement living on a fixed income cash in her annuity for a few shares of Berkshire Hathaway?  Absolutely NOT!  Should a young couple saving for a down payment on a new house invest in Berkshire Hathaway?  Absolutely NOT!
 
2)  Joe seems to think that 99.97% of financial planners are commission-based salesman.  This simply is no longer the case.  It is true that some brokers still choose to work on commission, but the fact of the matter is that the industry has changed drastically in the last 15 years and most high level advisors are now charging flat fees for their services or charge an annual fee that is based on a percentage of the assets being managed.  I personally charge between 1%-1.5% (based on the size of the account) of assets under management.  I believe this arrangement allows me to focus more on managing the accounts of my existing clients and less on the pressure to make new sales.  It also makes it so that both the advisor and client are on the same "side of the table".  My income goes up and down with the value of the client's account.  But Joe is right about the importance of choosing the right advisor.  You do not want someone peddling or trying to sell you a product.  You want someone that has the educational background, training, and preferably at least 10 years of experience.  You don't want the "used car salesman" advisor.  Before hiring any advisor, go the the FINRA website listed below and do a background and employment check.  If they don't have an absolutely crystal clear report, run the other way.  If their previous employement was McDonalds, run the other way.  See how easy it is and do a check on me!  My name is Shawn Swenson.

http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/
 
3)  Not everyone needs a financial planner.  Many people do well for themselves managing their own accounts and picking their own investments.  I like to talk about the "3 T's" with prospective clients.  If you don't have all three T's, then I might be able to help you.  The first T is Time.  Most of my clients do not have the Time to manage thier own investments.  Most have very demanding jobs, a family life and simply understand that there are not enough hours in the day to do an effective job of monitoring their investments.  The second T is Temperment.  Many folks do not have the right temperment to manage their own investments and tend to make decisions based more on emotions than sound financial judgement.  I actually spend the better part of most days talking people out of making stupid decisions.  The number one rule of investing is "Buy Low and Sell High".  It is so simple, yet so many people don't have the temperament to follow through with it and let their emotions get in the way.  The third T is Talent.  Not everyone has the Talent to pick and choose their own investments or the knowledge to make sound decisions about hugely important financial matters.  Many of my clients are health care professionals.  They are experts in their field..not in Finance or Investing.  If I want advice on which medication to take to lower my blood pressure, I'm not going to go ask a financial planner.  And if someone wants to know the benefits of ETFs or Roth IRAs, they are not going to go ask a nurse.

Hope that helps some....and sorry, I'll get off my soapbox now  

[cookindaddy]

Pulling up a chair....this might be almost as good as an oil thread!

I'm in the third camp that Shawn describes. I've been making my own advice for the last 30 years at least. Nothing against FPs, the bank provides one with my account but I just haven't found her that useful. I have the three Ts.

I am up from the peak before the crash by about 25% while the S&P500 index is down from the peak by about the same amount. Still, these days I am feeling that we should be more cautious. It's been a hell of a run up the last year. There isn't a lot of good macro economic news. I don't call my approach "market timing" as someone said. I call it common sense or "buy low, sell high".

Berkshire Hathaway is certainly a great accomplishment for Mr. Buffet and Mr. Munger. Been following them for years. But I think even Mr Buffet would agree that the performance of his stock BRKA has been pretty flat in the last four years.

The chart is from Google Finance by the way. My little contribution this morning for those who are interested: you might start by using one of a number of good free finance sites and assembling a test portfolio of whatever it is you might be interested in: stocks, bonds, indexes without spending any money. No pressure. If you hear of something interesting, look it up and check it out. Get to know what the common numbers mean and how to look things up. With the web, you have access to the tools and information that used to be the exclusive property of the big guys only a few years ago.

[rmr]

Sorry guys, but I've got to take issue with a bunch of what Joe Lawrence has said about the financial planning profession.  Some of his points have some merit, but he's a little behind the times on other issues.
 
1)  Should everyone invest in Berkshire Hathaway because of Warren Buffet?  Absolutely not!  Does Joe realize that good 'ol Warren is 80 years old and has already begun the process of choosing a successor?  Warren had a great run, no doubt, but past performance is not necessarily indicative of future results....especially when you've got someone new running the ship.  The other issue is that investing in Berkshire Hathaway is primarily an investment in the stock market.  This may or may not be appropriate for you depending on how much risk you feel comfortable taking or your time frame.  For example, would a recently widowed 70 year old whose in retirement living on a fixed income cash in her annuity for a few shares of Berkshire Hathaway?  Absolutely NOT!  Should a young couple saving for a down payment on a new house invest in Berkshire Hathaway?  Absolutely NOT!
 
2)  Joe seems to think that 99.97% of financial planners are commission-based salesman.  This simply is no longer the case.  It is true that some brokers still choose to work on commission, but the fact of the matter is that the industry has changed drastically in the last 15 years and most high level advisors are now charging flat fees for their services or charge an annual fee that is based on a percentage of the assets being managed.  I personally charge between 1%-1.5% (based on the size of the account) of assets under management.  I believe this arrangement allows me to focus more on managing the accounts of my existing clients and less on the pressure to make new sales.  It also makes it so that both the advisor and client are on the same "side of the table".  My income goes up and down with the value of the client's account.  But Joe is right about the importance of choosing the right advisor.  You do not want someone peddling or trying to sell you a product.  You want someone that has the educational background, training, and preferably at least 10 years of experience.  You don't want the "used car salesman" advisor.  Before hiring any advisor, go the the FINRA website listed below and do a background and employment check.  If they don't have an absolutely crystal clear report, run the other way.  If their previous employement was McDonalds, run the other way.  See how easy it is and do a check on me!  My name is Shawn Swenson.

http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/
 
3)  Not everyone needs a financial planner.  Many people do well for themselves managing their own accounts and picking their own investments.  I like to talk about the "3 T's" with prospective clients.  If you don't have all three T's, then I might be able to help you.  The first T is Time.  Most of my clients do not have the Time to manage thier own investments.  Most have very demanding jobs, a family life and simply understand that there are not enough hours in the day to do an effective job of monitoring their investments.  The second T is Temperment.  Many folks do not have the right temperment to manage their own investments and tend to make decisions based more on emotions than sound financial judgement.  I actually spend the better part of most days talking people out of making stupid decisions.  The number one rule of investing is "Buy Low and Sell High".  It is so simple, yet so many people don't have the temperament to follow through with it and let their emotions get in the way.  The third T is Talent.  Not everyone has the Talent to pick and choose their own investments or the knowledge to make sound decisions about hugely important financial matters.  Many of my clients are health care professionals.  They are experts in their field..not in Finance or Investing.  If I want advice on which medication to take to lower my blood pressure, I'm not going to go ask a financial planner.  And if someone wants to know the benefits of ETFs or Roth IRAs, they are not going to go ask a nurse.

Hope that helps some....and sorry, I'll get off my soapbox now  

This was a great post. We don't have that much to invest, but the advice was interesting. I'm not sure I like the idea of giving away 1 to 1.5% of my total wealth every year. But if are talking about the profits that a different story.



_______________________
Tire Coupons HQ

[the technological J]

so im looking at johnson and johnson thinking if i invest in it right now and that cancer detection test is working..... it could be the bet im looking for.... however if it doesnt that company is only on the rise and even though it didnt jump now in the long run its not a bad place to invest..... 1000 down what do ya think?

[seaweb11]

http://www.google.ca/finance?q=johnson+and+johnson

[BeSeeingYou]

Safe play, income producing stock. Nothing wrong with that for the new investor. Just don't expect a big run up in the price.  If it were me I would be looking for a growth stock.

[cookindaddy]

Income (dividends) is always a plus and JNJ has always paid dividends even through the downturn. JNJ had a big run up through the 80s and 90s and I often wished that I had invested back then but I didn't. If you use seawebs link and zoom to "All" you will see that JNJ has been pretty flat for the past 10 years. The cancer diagnostic is big in the news now but it is a long way from making money for them, if it ever does.

Asking about investments on a motorcycle board is an interesting concept and I am sure you will get opinions. If you want to hang out where people talk investments, there are plenty of places. I tried "motleyfool.com" for a while. The initial sign up is cheap and they have a thing called CAPS Community where you can see what thousands of other subscribers are saying about investments and see their ranking and predictions for thousands of investments. I dropped out after a couple years since I didn't find it useful to me but it was interesting for a while. Once motley has your money, you will get all these emailed "offers" for their services which were annoying, but the CAPS was interesting for a while. I just checked without being logged in, I can look at CAPS for JNJ so you can too.

Google Finance also has a discussion group for most companies, under "External Links" down the right side on seawebs link.

Big Pharma is big business but hugely competitive. Below is the chart at seawebs link with all the big companies compared to JNJ for the last 10 years. Even Pfizer with huge brands like Lipitor and Viagra does no better than the pack. The one that I did invest in 10 years ago and it is not a huge company but makes insulin for controlling diabetes is Novo Nordisk (NVO). That's the black line up 400%. Those are the ones you've got to look for. Diabetes isn't going away, it's getting worse.

[cookindaddy]

It's been a couple months. I just pulled up a chart for Johnson and Johnson (JNJ) and once again compared it to my favorite health care stock Novo Nordisk A/S (NVO), the leading supplier of insulin for treating diabetes.

[FrankenFrankenstuff]

I have $1200 to invest in a fund. I have bought some stocks but....failing as an investor. Give me some fund, bond ideas. (I already have Fidelity Freedom 35) and its doing nada. (except going down.

[flybox1]

for your Freedom 35, down in VALUE is OK if you have a long time until you need $. 
I bet your shares have increased.  what is most important RIGHT NOW?

for your 1200.... too tough to answer w/o knowing:
what its for. (goal)
when you'll need it. (time)
and how you'll tolerate weekly/monthly/yearly swings in the market. (risk)
(read: how well can you weather a storm?)

if you cant answer any of these, leave it in the bank9liquid) until you can, and then go talk to a professional
(i WAS a ChMFC and CFP for 6 years. hated sales. sold my book of clients).

dont ask a bunch of greasy bikers 

[Bob Wessner]

A worthwhile read is "The Investment Answer: Learn to Manage Your Money & Protect Your Financial Future." It's an easy read, not long and puts things in perspective. One of the co-authors, a Wall Street type wrote it, essentially on his death bed. It's even available on the Kindle.