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Sharon Lee
New Member
USA
8 Posts |
 Posted - Jul 13 2010 : 8:41:16 PM
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| I am wondering what have you tried in investing that worked for you and also if there are somethings to just plain stay away from. i am still stuck in the old model of not doing the stock market, but maybe I am missing something...Thanks Sharon lee |
Edited by - Sharon Lee on Jul 13 2010 8:42:35 PM |
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jrb3
Moderator
USA
2399 Posts |
Posted - Jul 14 2010 : 09:55:12 AM
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You have to use whatever is relevant for your circumstances and your goals.
YMOYL presents for consideration one path to Financial Independence. Key is reducing (for the "mainstream") expenses to the most-fulfilling "enough" level, then funding it through passive income. Their choice of US Treasury bonds comes directly from their investment criteria.
My wife is very leery of volatility -- to the point that, earlier in life, she'd not let me sleep if we had "too much" stock exposure, or accept me doing contract work even though my proven average monthly take-home was twice what I could earn on salary. So, we set "stability and predictability of income" as one criterion for our after-tax investments. That led me to holding bonds directly; other criteria and our circumstances led us to municipal bonds instead of Treasuries or corporates. We do invest pre-tax into stock mutual funds, but we're not extracting them for another two decades, so we "ignore" them.
I think my bedrock guide is two-fold: "stay with what you understand" and "use what works ethically". Different circumstances, criteria, or life events might have led me to different investment choices.
Joseph |
Joseph Beckenbach
From each *voluntarily* according to their ability, to each *unimposed-upon* according to their need.
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loosechickens
Moderator
5807 Posts |
Posted - Jul 14 2010 : 11:38:20 AM
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We've always followed a balanced and diversified plan that has significant exposure to quality stocks, but also has municipal bonds, corporate bonds, bond funds. stock funds and cash. As Joseph says, first understand your risk tolerance, try to educate yourself about WHY each class of investment is good to have in your portfolio, what the risks are of each (sometimes the things that look safest carry significant long term risk, such as fixed priced assets' vulnerability to inflation). In the end, there really IS no "one size fits all" investment advice.
Your best bet is to do enough research that you feel comfortable with your basic understanding of how investments work, what is a good mix for you depending on risk tolerance and time of life, and proceed slowly. The one piece of advice that I think does have some relevance is the admonition not to put all your "eggs in one basket".
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jrb3
Moderator
USA
2399 Posts |
Posted - Jul 17 2010 : 2:30:40 PM
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quote:
Originally posted by loosechickens
The one piece of advice that I think does have some relevance is the admonition not to put all your "eggs in one basket".
Truth be told, a very few, rare types in certain unusual circumstances actually work better putting all their eggs in one basket -- and then watching / carrying that basket very carefully. If you don't know what types, what circumstances, and why, it's definitely not for you
Joseph |
Joseph Beckenbach
From each *voluntarily* according to their ability, to each *unimposed-upon* according to their need.
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Sharon Lee
New Member
USA
8 Posts |
Posted - Jul 18 2010 : 7:01:37 PM
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| Are there any particular books you would recommend to understand a balanced and diversified plan that has significant exposure to quality stocks, but also has municipal bonds, corporate bonds, bond funds. stock funds and cash. As Joseph says, first understand your risk tolerance, try to educate yourself about WHY each class of investment" |
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Sharon Lee
New Member
USA
8 Posts |
Posted - Jul 22 2010 : 7:49:55 PM
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| thanks for your answers on YMOYL investing. I was at the bank today and saw the interest rates on their special board and the rates were all less than 1%. One was .2%. It seems surreal to me. I have many friends who just plan on working. One said she might retire at 70 to 75. She is a psychologist and got a late start in her career. |
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jrb3
Moderator
USA
2399 Posts |
Posted - Jul 28 2010 : 05:32:26 AM
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I don't have any specific recommendations. Wait, I take that back after scanning my bookshelves. The only "beginning investor" book I still have is David Bach's "The Automatic Millionaire". This does give a brief overview, and (if I recall) has a bibliography at the end with pointers to more "beginning investor" books.
The only other name which also surfaces is Peter Lynch. His "Learn to Earn" is aimed more towards teens, it seems, but it intends to get one started.
Joseph |
Joseph Beckenbach
From each *voluntarily* according to their ability, to each *unimposed-upon* according to their need.
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rozie
New Member
USA
25 Posts |
Posted - Aug 06 2010 : 3:07:23 PM
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Sharon, as you do your research, you may find it useful to create a matrix for your criteria. The updated Financial Integrity Program Guide mentions the following, which you can add to and weight according to your own life: Safety, Guaranteed Stable Income, Liquidity, Minimized Costs (Money), Minimized Costs (Life Energy), Long-Term.
I would say that long-term is a relative term in this day and age, when we're all wondering whether hyper-inflation, or deflation will kick in! The investment landscape is changing dramatically, and will continue to do so as the new regulations are developed to implement the financial "reform" law. Right now, we're trying to stay nimble in our allocations, and focusing on NO DEBT.
In terms of evaluating quality stocks, you may want to check out Tom Trimbath's Dream, Invest, Live... in which he writes about his successful method in cherry-picking stocks. (He is someone who was featured in the latest version of YMOYL.)
Check out social investment funds -- they may not be as high a return as killer stocks, but they meet a lot of the criteria above, and are much more stable than the market. You can see more information on that in the resources-investing section of the New Road Map Foundation website: http://financialintegrity.org/index.php?title=Resources
I would say one thing to stay away from: commodity index funds. I fear they will become the next hot thing -- and the next world-deflating bubble. And in the process they will lead to a lot of starvation and hardship, but those who invest in them will make a fortune off the empty bellies of others. Check out July issue of Harpers for more information on that.
Best wishes! |
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tim
Associate Member
USA
152 Posts |
Posted - Aug 15 2010 : 11:59:27 AM
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| To learn about the stock market, I read the book "The Intelligent Investor" by Benjamin Graham. It is a about value investing. It takes plenty of work, but I have gotten excellent results with it over the last 15 years. In time, I will switch to government bonds because they require so much less work. |
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YMYL investing
