U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Virginia > Northern Virginia
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Closed Thread Start New Thread
 
Old 12-12-2012, 11:02 PM
 
1,403 posts, read 1,854,888 times
Reputation: 451

Advertisements

Unless you are willing to spend a lot of time or have unique financial planning needs, buy into a few index funds and call it a day. Check back 15-20 years later.

 
Old 12-13-2012, 12:18 AM
 
Location: Chapel Hill, NC, formerly DC and Phila
8,569 posts, read 12,690,405 times
Reputation: 8335
Quote:
Originally Posted by jillybean720 View Post
Good question - I have been looking for one as well. I have money deposited directly into a savings account from each paycheck, but it's just sitting there collecting piddly interest. There has GOT to be a better way to save for emergencies, my kids' futures, retirement, etc., but I know absolutely nothing about investing at all, and every investment option claims to be the best for one reason or another.
There is a good personal finance forum here on C-D that you might want to read. Lots of knowledgeable people (and some not so knowledgeable ) on there. Generally, where you invest your money depends on what your goals are for said money. Money for retirement - that is probably ~30 years away for you - can be set up in higher risk/higher potential return accounts - think stock mutual funds. Money for emergencies should be set up in lower risk (and subsequently lower rewards) accounts - think money market accounts. Money earmarked for children's college would be somewhere in between - a mix of stock mutual funds, bonds, CD's, for example.

There are also certain tax breaks you can take advantage of for retirement savings (401k, IRAs) and college savings (529 Plans and Education Savings Accounts - ESAs). These are essentially designations for your account rather than a type of investment, per se. So you can invest in stock mutual funds, bonds, or CDs for retirement money within an IRA account, for example.

I suggest taking out a book from the library about basic personal finance, reading on C-D, looking at Money or Kiplinger's magazine to learn the basics. And to bring this back on topic, the less you know about personal finance, the more likely you are to be taken advantage of by a financial advisor. Personally, I think asking a trusted and knowledgeable friend or family member and some self-education is the best.
 
Old 12-13-2012, 12:31 AM
 
Location: Knightsbridge
684 posts, read 696,034 times
Reputation: 857
Quote:
Originally Posted by IndiaLimaDelta View Post
Unless you are willing to spend a lot of time or have unique financial planning needs, buy into a few index funds and call it a day. Check back 15-20 years later.
Well, it really depends on what he's looking for. Taking a good dividend paying stock in either 'poor man's luxuries' or necessities are generally safe.

For instance: A Johnson and Johnson investment of a flat $100, 000.00 in 1980 came out to be worth approximately $5.5 million in 2010 after reinvesting dividends, stock splits, etc.

Beer companies that have been around for centuries, conservatively investing banks(Read that as Canadian banks, really.) and power generation companies in the UK(Non-nuclear) are generally safe bets, though he should as always revisit his stocks and do research on a fairly regular basis.
 
Old 12-13-2012, 01:25 AM
 
1,403 posts, read 1,854,888 times
Reputation: 451
Quote:
Originally Posted by TempusFugitive View Post
Well, it really depends on what he's looking for. Taking a good dividend paying stock in either 'poor man's luxuries' or necessities are generally safe.

For instance: A Johnson and Johnson investment of a flat $100, 000.00 in 1980 came out to be worth approximately $5.5 million in 2010 after reinvesting dividends, stock splits, etc.

Beer companies that have been around for centuries, conservatively investing banks(Read that as Canadian banks, really.) and power generation companies in the UK(Non-nuclear) are generally safe bets, though he should as always revisit his stocks and do research on a fairly regular basis.
The problem with cherry picking certain industries and companies like this is that it's always backward looking. Remember that past performance is not a guarantee of future one.

In general, you want to ensure a decent return while minimizing/hedging risk -- and without having to intervene much. For most people looking for medium- to long-term investment, picking and sticking to a few index funds (with very low management fees) over a long horizon achieves that goal. Contrary to Gordon Gekko, greed is not good -- it leads people to take foolish risks and it usually ends in tears.

Finally, this advice is worth what you paid for it and may be the most cost effective financial advice ever offered on a random internet forum.
 
Old 12-13-2012, 04:09 AM
 
Location: Knightsbridge
684 posts, read 696,034 times
Reputation: 857
Quote:
Originally Posted by IndiaLimaDelta View Post
The problem with cherry picking certain industries and companies like this is that it's always backward looking. Remember that past performance is not a guarantee of future one.

In general, you want to ensure a decent return while minimizing/hedging risk -- and without having to intervene much. For most people looking for medium- to long-term investment, picking and sticking to a few index funds (with very low management fees) over a long horizon achieves that goal. Contrary to Gordon Gekko, greed is not good -- it leads people to take foolish risks and it usually ends in tears.

Finally, this advice is worth what you paid for it and may be the most cost effective financial advice ever offered on a random internet forum.
The last bit is very true.

However:

Backward thinking doesn't mean 'Ignoring the future'. My advise, in general, suggested looking at things like beer companies that have been around for centuries - Barring a major scandal(Which could happen in any industry) or people not buying beer any more, you're looking at a relatively safe bet. At the very least, there will be interest in purchasing the company for the name. Others: Utility companies like hydro generators in England - Barring people not using electricity any more or a major accident, they're also relatively safe. The British government recently approved a twenty year plan dedicated to expanding electrical infrastructure to deal with future needs. Of course, a major EMP attack could ruin him, but that could happen to any investment.

The investments I suggested were relatively safe, though you'd of course want to keep an eye on them for things like major scandals or criminal activity.

Dividend paying stocks generally are what older investors use as investing for income and professional investors turn to in times of economic trial: They're comparatively safe and generally outperform inflation.

This doesn't change what I suspect India's point is: There is no such thing as a completely safe investment. Hedge funds crash, companies go bankrupt, investment bubbles burst. Nothing is a good substitute for you doing your own research in to where you're placing your money.
 
Old 12-13-2012, 06:07 AM
 
301 posts, read 588,841 times
Reputation: 163
Quote:
Originally Posted by jillybean720 View Post
Good question - I have been looking for one as well. I have money deposited directly into a savings account from each paycheck, but it's just sitting there collecting piddly interest. There has GOT to be a better way to save for emergencies, my kids' futures, retirement, etc., but I know absolutely nothing about investing at all, and every investment option claims to be the best for one reason or another.
If you don't have the time (or just don't feel like) reading up and trying to learn more about investing yourself, I suggest you simply go to Vanguard.com and put your money into a Target Retirement fund. Call Vanguard and discuss w/ them. Anything you need liquid or as emergency backup, just keep in savings/money market/cd, etc. This is as simple, effective, and LOW COST (this is important) as it gets.
 
Old 12-14-2012, 07:31 PM
 
Location: Arlington, VA
421 posts, read 803,127 times
Reputation: 88
Quote:
Originally Posted by IndiaLimaDelta View Post
For most people looking for medium- to long-term investment, picking and sticking to a few index funds (with very low management fees) over a long horizon achieves that goal.
But with index funds, you'll need to adjust the percentage of composition as you get closer to retirement. Generally speaking, you'll need to sell stocks and buy bonds. That is, you'll have to manage the investment somewhat actively.

The best way is to invest in a low-cost Target Retirement Fund whose composition the fund manager will adjust for you. It may be a little more expensive than the index funds. However, it could be the real hassle-free type of investment.
 
Old 12-15-2012, 07:13 PM
 
1,403 posts, read 1,854,888 times
Reputation: 451
Quote:
Originally Posted by TempusFugitive View Post
The last bit is very true.
Well, I retired in my early 40's and don't have to work anymore, so I have time to troll in random Internet fora.
Quote:
Backward thinking doesn't mean 'Ignoring the future'. My advise, in general, suggested looking at things like beer companies that have been around for centuries - Barring a major scandal(Which could happen in any industry) or people not buying beer any more, you're looking at a relatively safe bet. At the very least, there will be interest in purchasing the company for the name. Others: Utility companies like hydro generators in England - Barring people not using electricity any more or a major accident, they're also relatively safe. The British government recently approved a twenty year plan dedicated to expanding electrical infrastructure to deal with future needs. Of course, a major EMP attack could ruin him, but that could happen to any investment.
It's not that people won't be buying beer anymore (although consumption habits can change over the time horizon we're discussing) -- the risk is that, for a variety of reasons, the beer industry's profit margin may decline, for example, or that it's stock prices may not represent value over time.
Quote:
This doesn't change what I suspect India's point is: There is no such thing as a completely safe investment. Hedge funds crash, companies go bankrupt, investment bubbles burst. Nothing is a good substitute for you doing your own research in to where you're placing your money.
Indeed.

My best years were 2008-2009 when my own portfolio tripled. Since then, I have not had any year with lower than 50% return (this year until mid-September, when I liquidated most of my positions, was close to 100% return and since mid-September my few short positions have yielded about 20%). My wife thinks I am a genius. I tell her, in response: 1) I am a trained professional (I studied economics at Ivy League universities and have graduate degrees) 2) I spend A LOT of time on research and number crunching 3) I am highly opportunistic and contrarian, 4) these were/are highly unusual times and 5) I was very, very, very, very, very lucky -- and I never count on being lucky too long.

When envious friends and family inquire, I give the advice I gave earlier, essentially the financial industry's version of "fire and forget."
Quote:
Originally Posted by LoveAlbuquerque View Post
But with index funds, you'll need to adjust the percentage of composition as you get closer to retirement. Generally speaking, you'll need to sell stocks and buy bonds. That is, you'll have to manage the investment somewhat actively.
Yes, that's correct, at certain intervals, you should swap stocks for bonds or even cash. But over, say, 20 years, that's something that needs to be done 3-4 times at most. I consider that a very minor intervention.
Quote:
The best way is to invest in a low-cost Target Retirement Fund whose composition the fund manager will adjust for you. It may be a little more expensive than the index funds. However, it could be the real hassle-free type of investment.
Yes, that is more-or-less hassle-free, but the cost of that in compounded management fees is substantially high for something anyone can do easily once or twice a decade.
 
Old 12-15-2012, 07:39 PM
 
7,970 posts, read 18,099,726 times
Reputation: 2597
While the discussion has been thoughtful, it's not region-specific. Of course, if any region-specific recommendations were made, that would be considered advertising per the Terms of Service. So it's an unfortunate case of Catch-22. The best thing to do at this point would be simply to close the thread.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Closed Thread


Options
X
Data:
Loading data...
Based on 2000-2016 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Virginia > Northern Virginia
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6. The time now is 09:22 PM.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top