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The article also states to max the 401K. Alright, what's a realistic percentage of income that a person is likely to set their contribution at? The current contribution limit is $18,000. Say a person contributes at 15%. So, if they max @ 15%, they're making $120,000 a year. They should have plenty of money to try and invest a little on their own. Again, this is only after all the other points on the note card are met.
Quote:
Originally Posted by mathjak107
there is a huge difference using fake money and using real money.
It's true that you'll never get comfortable with the gut-wrenching downturns if you aren't using real money. The only way to get comfortable and "used to" the market, or to get a feel for your risk tolerance, is to be in it. I was merely suggesting a fake account or doing it on paper first.
I think someone who's maxing their 401K and makes $120,000+ came come up with, say, $5,000, and see what they can do with that. Start small. If they stink at it, they don't have to continue. But to not try at all, and to tell people not to try at all, is defeatist from the start. It's a PBS article, though.
I think those are excellent rules for probably 90% or more of non-professional investors.
I might have included a rule like "Have patience and don't panic in market downturns." I am definitely glad that I resisted the urge to move out of stocks back in early 2011.
Buffett basically buys a chunk of company and forces them his way.
Good luck trying that!!!
Well, if it's power someone is after, he/she can always head on over to the pink sheets and pick up a stock that trades at least two zeroes to the right of the decimal. It might be a ghost company that hasn't reported anything since the late-'90s, but he/she will easily be majority stakeholder and can then tell people what to do. A little more like Buffett than he/she was the day before.
Last edited by Free-R; 04-30-2016 at 08:11 AM..
Reason: There is an "r" in zeroes.
It's true that you'll never get comfortable with the gut-wrenching downturns if you aren't using real money. The only way to get comfortable and "used to" the market, or to get a feel for your risk tolerance, is to be in it. I was merely suggesting a fake account or doing it on paper first.
Just take a few grand and buy a Biotech sector fund, then watch it go up & down 5% in 1 day
I pursued this strategy by accident, first mutual fund I bought outside my 401k was in Biotech. Still have the fund, but it's a much smaller % of what I have now.
Just take a few grand and buy a Biotech sector fund, then watch it go up & down 5% in 1 day
I pursued this strategy by accident, first mutual fund I bought outside my 401k was in Biotech. Still have the fund, but it's a much smaller % of what I have now.
One of the very first stocks I ever bought was much like your fund in regard to wild swings. I threw darts at a virtual dart board on an investment site in order to find it. Found it on the Pinks, read up on the science (seeking a cure for a certain type of eye disease), and saw its potential. The problem was the company's financies were terrible, that's why it was in penny land. Several years later, they solved a lawsuit with one of their creditors and actually managed to get back on the NASDAQ, albiet it was done using a reverse split, rendering the smalltime holders of the stock diluted (aka, me). Pretty good so far: finding it in penny land to then have it get to the NASDAQ after so many years of strife. Thought I was onto something. Dilution aside, of course.
I kind of miss that stock, as it had a great story, the stock's message board was lively, and it was fun to watch. Eventually they were bought by a Japanese company that doesn't trade on an index/exchange I am familar with. Long story short, it was my biggest loser (I had sold out long before they did the reverse split.
Had that stock actaully paid off, it might've been something like six degrees of Warren Buffett, or something like that. But it didn't, so I like to put a positive spin on things and call it a self-imposed entertainment tax.
...Need to find a new one of those.
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