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Thread: Newbie investor with very basic questions

  1. #41
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    Quote Originally Posted by JackJac View Post
    I think the bold portion of your comment explains why many people choose to avoid the stock market. The volatility and unpredictability of the market can turn a healthy hobby into a stressful, obsessive addiction. I think it's fair to say that for most people, investing in themselves and their work will make them rich, and when they accumulated enough savings and near retirement they can turn to fixed-income vehicles such as annuities ...
    True ... the problem is that no one cares for your money like you do.

    Some went this dependable route just to lose millions having a "expert" take care of it for them in retirement. Others are in better shape in that the manager made good $$, the return isn't that great but the $$$ didn't disappear.


    Cheers


  2. #42
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    Quote Originally Posted by Eclectic12 View Post
    True ... the problem is that no one cares for your money like you do.

    Some went this dependable route just to lose millions having a "expert" take care of it for them in retirement. Others are in better shape in that the manager made good $$, the return isn't that great but the $$$ didn't disappear.


    Cheers
    Yep. I definitely think everyone should know about investments and how they work, etc. However, perhaps the stock market shouldn't be a focal point, what with it's unpredictability and healthy dose of luck and all.

  3. #43
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    ^^^

    Isn't "knowing about investments" supposed to include GICs, bonds, precious metals etc.?

    Or are you saying that part of the problem is that the few who want to learn are limiting themselves to the stock market?


    Cheers

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  5. #44
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    Quote Originally Posted by Eclectic12 View Post
    ^^^

    Isn't "knowing about investments" supposed to include GICs, bonds, precious metals etc.?

    Or are you saying that part of the problem is that the few who want to learn are limiting themselves to the stock market?


    Cheers
    Yes, I think there are other "investment" vehicles out there such as annuities, and the average joe would better off learning about those sorts of vehicles as opposed to getting lost in the unpredictable and stressful world of stock market investing. If one has a career that they enjoy and they are reasonably frugal, then turning to annuities as they approach retirement seems like wise move as opposed to spending your free time obsessing over market fluctuations and guessing the future.

  6. #45
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    I found the comment about investing being complicated shows another issue. Investing is only as complicated as you make it. For example, I give money to the bank and earn interest...not complicated. I buy a gic, again not complicated.

    Now, let's take it up a notch...

    I buy and use a product that I love, all my friends use the product as well, I find out the company is publically traded, I go to their website and read up on their financials, it looks like they are doing well, I buy some stock...not complicated.

    Of course you could also go to a broker and buy some convertible debentures in a company that bundles derivative mortgage backed securities with a moody AAA rating. Now, most people I know would have to look up about every second word of that investment strategy...meaning it's probably not a good investment for the average joe.

    My point is, there are simple ways to invest, that probably work quite well that anyone could do...if they wanted to. A good rule of thumb when it comes to investing is, if you don't understand what you are buying, don't buy it. Another is, where does the money come from and where does it go. If you don't know, then you don't know enough (and that included the money the broker makes not just the investments).

    If you take long enough to know those two things, you can probably be an investor who does quite well. It doesn't have to be complicated.
    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

  7. #46
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    Quote Originally Posted by Just a Guy View Post
    I found the comment about investing being complicated shows another issue. Investing is only as complicated as you make it. For example, I give money to the bank and earn interest...not complicated. I buy a gic, again not complicated.

    Now, let's take it up a notch...

    I buy and use a product that I love, all my friends use the product as well, I find out the company is publically traded, I go to their website and read up on their financials, it looks like they are doing well, I buy some stock...not complicated.

    Of course you could also go to a broker and buy some convertible debentures in a company that bundles derivative mortgage backed securities with a moody AAA rating. Now, most people I know would have to look up about every second word of that investment strategy...meaning it's probably not a good investment for the average joe.

    My point is, there are simple ways to invest, that probably work quite well that anyone could do...if they wanted to. A good rule of thumb when it comes to investing is, if you don't understand what you are buying, don't buy it. Another is, where does the money come from and where does it go. If you don't know, then you don't know enough (and that included the money the broker makes not just the investments).

    If you take long enough to know those two things, you can probably be an investor who does quite well. It doesn't have to be complicated.
    That seems like solid advice. I just have beef with the stock market and the diversified approach that seems to yield little more than HISAs in the long run. I'd rather have cash on hand than throw my money into the matrix, I mean market. Even blue chip stocks are a gamble. Who's to say these companies will be half as strong in the near future as they are now? There's a lot of competition out there and various trends on a mirco and macro level can really be game-changers. When it comes to the stock market -- truly, don't invest more than you can afford to lose. To me, that says it all right there.

    Just my 2 cents.

  8. #47
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    I should have also said keep an eye on what's happening in the world. If the company changes its product and you and your friends are unhappy, it's a good sign to get out of the stock. Again, not complicated.

    If rule 2 changes, re-evaluate the stock. Not complicated.

    Everyone always talks about blue chip companies, but how much do you know about them? IBM was everywhere in the 80's and 90's, what do they do today? What blue chip companies do you use? Bank stocks? Okay, which banks do people like, and which do they not like? Some have better reputations than others, but those reputations also change. So should your investments. If a company has a monopoly (utilities for example) then they are probably safe no matter what they do. If government opens up competition, then get out.

    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

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