Investment Ideas for Beginners

[Anonymous 6]

Now i’m not an investment expert but i do know the basics of business and investing as far as supply and demand are concerned. I was telling a friend of mine who was thinking about investing in different stocks but he didn’t know what companies to start with. I told him to figure what people will always need and can’t live without, and start there. People will always need a place to live, so invest in real estate and create housing. People need to eat so invest in agriculture, no matter how good or how bad the economy is, people will find an excuse to smoke and drink. So invest in tobacco and alcohol companies, invest in pharmaceutical companies. Last but not least, invest in things that women and children buy.

Women spend money like they have stolen credit cards. So figure out what they spend that money on and you’ll be rolling in dough after awhile. Makeup companies, shoe companies, hair weave manufacturers, stuff like that, invest in it. Then when you see one of them walking past you in the mall, with a face full of caked on war paint and a designer handbag, thank them for making you wealthy.

As far as children are concerned, invest in Gerber, and baby formula, and diapers. The poorer the neighborhood, the more children you will see. No matter how good or bad the economy is, people will always have kids. So invest accordingly.

Also i’ve been hearing alot about bitcoin, it’s worth looking into, but i don’t know specifics. What do you guys think, any other good stocks to look into?

[TaxGuyParticipant]

I like your idea. The only caution I would give you is look to see if those items are historically overpriced. Real estate right now looks like it’s in a bubble to me, an interest rate bubble. I’m not against investing in real estate, but I wouldn’t touch it right now. I’m looking into oil companies right now. They have been beaten down with the price of oil so low. And with your philosophy, it’s something everyone and every industry uses.

I don’t really understand bitcoin, so I stay away from it. But that’s just me, only so many hours in a day.

Order the good wine

[ArturParticipant 71]

Personally, I would not invest in stocks now. The reason is that economic activity and financial markets’ activity is cyclical. An economic downturn (i.e., recession) and a bear market in financial markets is now long overdue in the US. Anything can be a trigger, e.g. Brexit, and when it happens the drop will be pretty steep and the recovery may take a couple of years.

While your investment philosophy is moderately conservative, i.e. you chose companies with some assets to back up the company’s stock price and thereby making them less speculative (unlike dot-com companies), you must remember that during a bear market almost everything loses in value (except perhaps the few instruments that are negatively correlated with the financial markets’ activity, e.g. gold during some times in history). The reasons for this are multifold, but this is something that can be easily confirmed by looking at the historical data of stocks.

Another thing to remember is that conservative investments, in most cases, generate lower returns in absolute terms (i.e., without risk adjustment) than less conservative investments. This is related to the (most) basic concept in finance of risk and return.

I also mentioned that your picks are “moderately” conservative. Buying stocks in an utility company is a conservative choice (buying bonds or government bonds is substantially more conservative), but the “consumption” of goods such as real estate, tobacco or alcohol is significantly affected by economic activity and changes in the relevant policies (most importantly, taxation). Among many other variables, investing in agriculture, aka agricultural commodities, is significantly affected by yields and pharmaceuticals are affected by FDA approvals. Everything in financial markets is affected by speculation, which means that stock prices will deviate from their true economic values (sometimes substantially and for a prolonged period of time) in response to investors’ expectations of future changes in value (therefore, sometimes becoming self-fulfilling prophecies without any actual economic rationale).

In general, rather than hand-picking individual stocks, it is much better to invest in an index, e.g. S&P500. This gives you the benefit of diversification, which is an insurance against individual companies going bust or performing poorly, and it usually performs better than an actively managed fund in the long run. A good choice is an Exchange-Traded Fund (ETF). It is an instrument usually associated with small fees that allows you to track an asset without the need of purchasing the asset, e.g. you can track and thus make money from changes in the S&P500 index without actually buying stocks of the S&P500 companies.

[Blue SkiesParticipant 15665]

low interest rates has inflated stock markets so don’t buy stocks now.

MGTOW is not a movement, it is a way of life.

[clint englandParticipant 341]

I have to agree with the above opinions, for me i’ve sold my house and won’t buy again until prices come down to realistic levels. If they don’t, no biggie i’ll carry on renting.

I will/have been putting my money to work via a little of everything. Nothing too advanced or hi tech, bitcoin (only a little due to volatility) metals etc.

More as a means to keep away from the banks a little and a possible inflation hedge if the shtf!. Maybe i’ll make a little money, won’t be a huge amount but i won’t be complaining.

I watch plenty of youtube videos and another service called real vision. As usual the ‘experts’ sometimes contradict each other but you have to make your own mind up. But i’d keep it simple and take it slowly.

One thing’s for sure, they all agree on one thing: we are in for some interesting times!

Good luck.

[ResidentEvil7Participant 9604]

I agree with a lot of what’s been said, but… When you say to invest in agriculture, well I thought the same way, but then a major grocery store giant named Dominick’s went under several years ago. Even in bad times, the things that people still has to have still has competition. Again, I thought grocery stores are recession proof because we all need to eat, but Dominick’s went out of business.

https://themanszone.webs.com/

[Anonymous 0]

(Disclaimer: I’m not a financial professional. I’m an amateur like anyone else.)

The stock market’s probably a little bit high at the moment, but not ridiculously high. The S&P 500 was stuck at 1500 for over a decade (from 2000 to 2013). It finally had a little run-up to 2100 in the last 3 years, but that doesn’t make it wildly overpriced. A 33 per cent gain over 15 years is only 2.2% per year, which is below the historical average.

So I wouldn’t worry about timing the market. We’re in the middle of a technology boom (self-driving cars, and all that kind of stuff), and the US is still basically the technology leader in most respects. It’s going to push up the market sooner or later. You need to be in the market to cash in on that. Even if the market takes a hit in the short-term, it’ll even out over the long-term.

As others said, if you’re not sophisticated about the market, get a mutual fund that mimics a stock index. Example: Fidelity 500 Index Fund: https://fundresearch.fidelity.com/mutual-funds/summary/315911206

Generally speaking, when using funds that mimic stock indexes: Get a low-cost fund, meaning a fund that runs on auto-pilot and just automatically mimics the market. Avoid high-cost (managed) funds that involve “active management” by stock-picking managers. You can tell them apart by looking at the “expense ratio.” The “expense ratio” for a low-cost fund should be 0.25% annually or less. By comparison, a high-cost (managed) fund will have an “expense ratio” above 0.75% annually (up to say 1.3%).

If you’re older and want something that will automatically switch you into bonds and safer investments as you near retirement, then look at something like Fidelity Freedom Funds: https://www.fidelity.com/fund-screener/evaluator.shtml#!&ntf=Y&ft=BAL_TD%2CBAL_TI%2CBAL_TK%2CBAL_TG%2CBAL_TN%2CBAL_TH%2CBAL_TE%2CBAL_TA%2CBAL_TJ%2CBAL_TL&mgdBy=F&expand=%24FundType

With the Fidelity Freedom Funds, basically, you pick a fund with a “target date” that reflects your planned retirement date. If your retirement is still a long way off, the fund will mostly be invested in stocks. As you get closer to retirement, that fund will automatically switch from stocks over to bonds across time (in other words, it will switch over to safer investments appropriate for someone nearing retirement). You don’t have to do a thing.

Again, some of the Fidelity Freedom Funds are low-cost (“expense ratio” at 0.16%) and some are managed (“expense ratio” at .77%). I would go with the low-cost versions that run on auto-pilot. These Freedom Funds just reflect stock and bond indexes and don’t need active management.

And you don’t need a broker to do any of this. You can just log into Fidelity (or an other on-line company of your choice), open an account, and send them a check to make the investment.

Again, the disclaimer: I’m not a financial professional. The only reason I’m pushing Fidelity funds is because I invest with them myself, and I know the company. But any other big mutual fund company would have similar offerings as well.

[Anonymous 0]

Anonymous wrote:

[…] And you don’t need a broker to do any of this. You can just log into Fidelity (or an other on-line company of your choice), open an account, and send them a check to make the investment. […]

… By the way, Fidelity has branch offices in most cities in the US. You can just go down to one of their branch offices and the people at the counter will walk you through the process of opening an account, free of charge. Only takes about 10 minutes if you already know what mutual fund you want to invest in. Or you can do a sit-down with an advisor to discuss your investment goals and the different kinds of mutual funds available. Again, free of charge.

[GwalchmaiParticipant 43]

Thanks for the advice

Gwal

[Author]

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