T Nation

How/Where To Invest?


#1

I’ve saved up a bit of money and will be getting a bit more later in the year and am wanting to do something useful with it instead of it just sitting in the bank. My friend recently bought some stocks and he’s got me interested in it.

I’m looking for any resources or advice, just in general really, on how/where to invest my money. I’m looking at it more long term than short term and I’m in the UK if it makes any difference. I don’t have much to invest but it’d be in the hundreds of pounds.

Thanks for any help.


#2

I recently started investing. I had a small amount of money that was from my previous employers 401k, so i put it in a roth IRA and only recently invested as it was simply rotting in a money market (no gains/losses).

I had been seeing nothing but headlines of the market constantly reaching new highs so what i did was i looked for a fund that replicated what the market had been doing. I originally wanted to buy s&p 500 but since i didnt have enough money for a full share i found something similar. I looked at the historical chart and saw that SPGI (s&p global index fund) was doing what the market had been doing, steadily growing over the last yr.

I bought in at 138, and its now at like 145.

I then started buying individual stocks just cause i wanted to (at&t, tesla, netflix)

My advice is to start with a small amount of money that you can lose and survive. No matter what happens you will learn and it may sting, or it may mean you make some money.

Just take a small amount of money, pick someyhing and go!

It’s my belief that a lot of people act like they know what they’re doing, but they don’t. The market tends to go up in general so people make money and therefore think they are good at it.


#3

Thanks for your advice!


#4

Forex is fun. There is one website which gives you 10k in fake money to invest into different currencies. I lost about 9k of it in about 7 hours just playing around, then made it all back and then some over the next 3 days. Was a great learning experience, and I was addicted to Forex for next 2 weeks lol.
But it is higher risk, probably not something you want to invest hard earned cash into right away.


#5

General advice, you should be prepared to lose anything you invest. If you can’t handle that then I wouldn’t invest on your own.

Read “The Intelligent Investor” by Benjamin Graham.


#6

This was my dads advice…in my mind it helps to make it less stressful when you look at it this way. In a way it lowers my expectations when i know i could lose everything I’ve invested and still live.

It’s sophisticated gambling, step up to the roulette table and pick number.


#7

I wouldn’t go quite that far for professionals, but for an amateur investor, I completely agree.


#8

@jboy99 I know what you mean and I’ve used the app myself.

@usmccds423 I’ll check that book out and bare in mind that I should be prepared to lose it all. Thank you.


#9

Low cost index fund. Search boggleheads


#10

Is this for retirement? Or are you looking to go high risk (but maybe lose it all?)?

Much different strategy for those scenarios.


#11

Go read that one twice. Read “Rich Dad Poor Dad” and “Cashflow Quadrant” to find out WHY you want to be an investor. I like “Random Walk Down Walstreet” for a good summary of dollar cost averaging. “Millionaire Next Door” is a good mindset refresher. “Total Money Makeover” for budgeting and fiscal responsibility so you can invest more.

Learn the difference between investing and speculating. Decide what that means to your strategy.

If you want MBA-level financial advice for free read all of Berkshire Hathaway’s shareholder letters. They are really good.

Never forget the underlying business an asset represents.


#12

@Lonnie123 I’m only 19 so I wouldn’t say retirement but maybe 10/20 years down the line.

@Basement_Gainz thanks for so many things to look at I’ll start checking them out!


#13

Okay, so here is some very, very generic advice:

  • Investing, in general, should be done with money you can’t use in better ways. Meaning, if you can get a $10k/year raise by taking a few certification courses, do that instead. The younger you are the more opportunities there are to put small amounts of money to work (going to school, learning a trade, starting a small business, etc…)

  • For long time horizons (20 years like you mentioned) just throw it in a target date account. Essentially its a single fund you buy that is made up of thousands of stocks/bonds, so its already diversified. This essentially puts your money is “The Market” and it will generally track the S&P 500 in terms of its movement up /down. Just google “vanguard target date” and pick the date you want the money to be “available” - generally speaking this will yeild about 7% per year growth, or a doubling of the money every 10 years. The target date fund starts more aggressive and gets more conservative as you approach the date.

  • For shorter time Horizons where you NEED the money in under 5 years (saving up for a house/car/vacation/school) just throw it in a savings account or CD. Rates are pretty shitty right now but they are on the way up. This is the only way to ensure the money will be available

  • If you are so inclined to roll the dice, you might try your hand at investing in individual companies. Much MUCH more risky, But the potential returns are much greater. For example, if you invested in the target date fund you might gain 7-10% in a year, but if you invested in AMD last year you would be up like 500-700% … But they could have folded and you would have lost everything too. If you want to try this you might consider sticking to 5-10% of your money to this type of investment.

Or do some paper trades where you just write down the trade and see what you would have made/lost on it. This is VEEERRRY different than actually having your money on the line though as its very easy to “let it ride” on the way up when in fact you might have sold when you doubled your money and watched it climb and climb and climb when you cashed out.

Again - VERY generic advice and there is a ton more that goes into it… But for brain-dead, set it and forget it investing, just use a target date fund (this is where 90% of my funds are)


#14

Thank you that’s a really useful reply, I haven’t heard of target date funds.


#15

good advice.