Any Investors in the House?

dldawes1a

I just started investing in some Schwab mutual funds through a new Schwab Roth IRA account. 

I’ve spent my first three weeks trying to learn everything I can about beginning investing. Kinda like when I become an Egghead!!  Some of you can remember 10 years ago!!

I turned to the forum to learn from the best professional Eggheads on earth. I learned from the best!!

I have been searching for an investing forum comparable to our Egghead Forum. There must be one out there somewhere. 

I just opened an individual investment account with Schwab to experiment and learn through practice. I put $5K in there to start learning with. 

Any direction and advice from the greatest folks on earth is greatly appreciated. Who knows, I might make enough to buy another BGE!!

thanks in advance for your responses!

Donnie

JohnInCarolina

Paging @billt01

lousubcap

@dldawes1 - You will have more success posting on the main board.  FWIW-

Foghorn

The Motley Fool is a useful website that has a lot of educational material.  I've never participated in their forum but it is my understanding that they have one.

John Bogle's work is good as well - and fairly easy to read.

Both of them point out how the investment industry is out to get your money and one of the biggest factors to determine how much money you'll have in the future is that it is inversely proportional to how much money you give them in transaction fees, annual expenses, etc.

dbCooper

@dldawes1 -  For your question about a investing forum I don't have any recommendations.  As for educational resources, in addition to what @Foghorn offered, Fidelity and Vanguard (founded by John Bogle) are worth pursuing.  Annual shareholder letters from Warren Buffet and Charlie Munger provide a wealth of wisdom on more than just investing . . . https://berkshirehathaway.com/letters/letters.html and https://berkshirehathaway.com/wesco/WescoHome.html

FWIW, I started investing in my mid-twenties and retired six years ago at age 56.  Some things that I think I know about building wealth:

- Any money you might need in the next five years should not be deployed in volatile markets.

- Know the difference between investing and speculating, then decide which path is right for you.

- With equity investments, time in the market, not timing the market, is more productive.

- You might be able to pick individual winning stocks, although that is highly unlikely.  Over given periods of time, a boring S&P 500 index fund is difficult for even the pros to outperform.

- If your going to buy individual equities, read the companies 10-Q and 10-K forms.  If you don't understand them you shouldn't invest in them.

- Live below your means and invest all your excess capital.  Dollar cost averaging and reinvesting dividends can be magical.

- Crypto markets are no different than casinos, except casinos give better odds.

- The surest way to wealth appears to be winning a seat in congress and front running the markets.

fishlessman

waterfront property, you get to enjoy it the whole time before selling. renting out a beach front is getting pretty expensive as well, especially the airbnbs

dldawes1a

Well, I've liked all the comments !!

Most all of my small $5K investment is in Schwab Mutual Funds. I feel like they are safe. I'd just like to find a couple of stocks to play around with. If I have money invested, I'll play harder !!!

I'm looking at Realty Income (O) and Modiv (MDV) REITs.

I've been reading many of the recommended resources. One thing I've decided already...it takes time to learn and it takes time to make money!!

I'll check out the resources mentioned that I haven't already been reading/researching.

Thanks my friends,

Donnie

fishlessman

ive had a boat for 33 years and its been  a better investment than my mutual funds i like the boat. unlike most, ive never bought the bigger and then bigger boat though.

Foghorn

fishlessman said:

waterfront property, you get to enjoy it the whole time before selling. renting out a beach front is getting pretty expensive as well, especially the airbnbs

This is true and it is what we have done with about 25% of our "portfolio" - after I figured out the following things:

- most wealthy people I know had real estate play a role in their wealth accumulation

- real estate, in general, does not out perform the stock market, but very few people make and honor a commitment to the stock market like they honor a commitment to real estate... meaning that when one makes a plan of "I'll invest X dollars into the market every month" something often comes along and gets in the way of that (car breaks down, AC breaks, plumbing issue, etc) such that very few people make every investment they plan for 15-30 years - whereas when you take on a mortgage you don't really have a choice, do you DO make every payment for the length of the mortgage.  Therefore, to buy a rental property is to make a commitment to wealth - if you buy it on a 15 year mortgage, in 15 years you will own it outright.

- The longer you own a rental property the more you benefit from it as rents tend to increase faster than expenses associated with the property (taxes, insurance, HOA dues, etc).  One of our properties now covers all expenses (including the mortgage) and actually makes us a little money after 6 years of owning it.

- we have enjoyed our properties, as have our friends and family, so there is a side benefit

Gulfcoastguy

I have several relatives who are heavily invested in rental properties. Almost all of the renovations are done in family, they could tell you the price of a new toilet or shower to the nearest nickel. My Dad never owned more than 3 rental properties and one was a trailer in the backyard that was usually occupied by relatives down on their luck. As they say about land, God isn’t making anymore of it. To really profit from it you have to put in the sweat.

lousubcap

@Foghorn - totally agree however, you may age out of the challenges with the property,  the manager etc. Fortunately those in this discussion will benefit from the long term with rentals.  Don't know anyone who has not.  
Regarding the broader market, all I can offer is get in, stay in and don't sweat the ebbs and flows.  I was not in a place where I could kibitz with any funds/managers for weeks or more on end. I was good with that as that was their profession.  Still hands off as that is their skill-set.  

Foghorn

@dbCooper offered some great advice above.  However, I'll suggest that playing around with some individual stocks can be a good exercise and lead to a great outcome.  It's about the only place where the math is in favor of the individual small investor.

A mutual fund manager can't just make a portfolio of 5-10 trusted blue chips and then 5-10 more risky stocks that were purchased based on some good market analysis.  They have to own hundreds of stocks.  so when one stock goes up 10-fold, it barely impacts the mutual fund because it only makes up 0.5% (or whatever) of the fund.  When that happens to an investor with only 10 stocks their portfolio essentially doubles.  

If you pick 5 stocks and 2 of them go completely bust and 2 of them just keep up with the market average, but 1 of them goes up 10-fold, on the surface it is easy to not think of that as a "win" - 2 losers, 1 winner, 2 average.  But if you invested the same amount in each one - let's say $1000 - and this occurred over a 5 year period such that the average ones went up 50%, you would turn $5000 into $13000 while the market average would be $5000 became $7500.  

I did something of this sort starting in the late 1990's when - based on Motley Fool recommendations - I bought $2000 of AOL.  It went to $6000 fairly quickly so I sold off $2000 of it and bought some Amazon.  In 2018 I sold the Amazon for $89k and used it as the down payment for a beachfront condo.

With that said, I'm not the guy who says he goes to Vegas and wins money every time.  Frankly, selling Amazon (instead of some of my other holdings) in 2018 wasn't the best move.  It has more than doubled since then and my other holdings haven't.  And over the years I've bought a lot of stocks of companies that went belly up and many that have underperformed the market.  At this point I've gotten so busy with work and other things so that I can't really pay as much attention as is needed to deal with some of the riskier plays so I have sold off everything that isn't a blue chip conservative holding.  

My point is, OP, after you have educated yourself, if you want to dabble in individual stocks, don't be afraid to do it - but recognize that it is a time commitment.  The reason you have to commit the time is that making the decision to buy is easy.  It's much harder to decide when to sell.

DoubleEgger

Do you have a goal in mind for your new brokerage account? Different strategies are in play depending on what your goal is. Is this just “play money” and you are looking for a higher risk/higher reward scenario or are you looking to use this to increase your long term savings/retirement supplement? Relate your goals with your risk tolerance level and the amount of time you are willing to put into it and then start making investment choices that meet your criteria. 

WildmanWilson

A good S&P 500 index fund is going to be a pretty simple way to build wealth over the long haul. It has extremely low fees and has a proven track record.  Don’t panic and stay the course. Always pay yourself first and you’ll retire in a good place. 

dldawes1a

Lots of great responses. I appreciate you all. 

I ended up with 4 Schwab mutual funds in my Roth IRA (SWANX, SWSSX, SWISX, SWPPX). A fairly diverse portfolio. I'm not afraid of risk as my total investment is $8K for this year. I've got an annuity and my Rollover IRA, and my 401K from my current employer. My Roth is more of an adventure and experiment more than anything else. Hopefully, I make some money off of it.

I also opened an Individual Brokerage account with $5200. Also with Schwab. I ended up with 4 Schwab mutual funds to start it out. (SNXFX, SWOBX, SWLGX, and SWLVX)  Again, a diverse collection, I think.

I've got my eyes on several individual stocks to potentially buy into. O, MDV, PACS, and WM. Now is where I do not feel confident in my selection process. I'm just continuing to study and research, and watch what happens with them.

Thanks again everyone. Your posts are definitely taken into consideration. 

Thanks,

Donnie