elizabeth warren is correct on this

[GG]

For someone who knows little to nothing about finance and investing, is there a trustworthy source anyone can recommend for learning the rudiments of investing as they apply to the individual?

 

What's your end goal - to understand how the markets work and the differences across investment types or to become a casual day trader?

 

I don't recommend the latter unless you have a lot of disposable time.

 

For the former, there are a lot of books on it - ranging from the basic information you can get on the Vanguard/Fidelity/Investopedia sites, and yes, the Dummies for .. books.

[DC Tom]

What's your end goal - to understand how the markets work and the differences across investment types or to become a casual day trader?

 

I don't recommend the latter unless you have a lot of disposable time.

 

And disposable cash.

[Azalin]

What's your end goal - to understand how the markets work and the differences across investment types or to become a casual day trader?

 

I don't recommend the latter unless you have a lot of disposable time.

 

For the former, there are a lot of books on it - ranging from the basic information you can get on the Vanguard/Fidelity/Investopedia sites, and yes, the Dummies for .. books.

 

For me, day trading would be out of the question. My 401k is handled by Fidelity, and I trust them, but I worry if relying solely on that account is akin to the proverbial 'eggs in one basket'. I see a lot of ads hawking gold and silver, but the cynic in me wonders 'if it's such a good investment, why are they selling it?'. I'm certainly not too proud to pick up one of the 'for dummies' books, and that's probably not a bad idea since I'm pretty much a dummy when it comes to my knowledge of investing.

 

I appreciate the tip!

[Jauronimo]

For me, day trading would be out of the question. My 401k is handled by Fidelity, and I trust them, but I worry if relying solely on that account is akin to the proverbial 'eggs in one basket'. I see a lot of ads hawking gold and silver, but the cynic in me wonders 'if it's such a good investment, why are they selling it?'. I'm certainly not too proud to pick up one of the 'for dummies' books, and that's probably not a bad idea since I'm pretty much a dummy when it comes to my knowledge of investing.

 

I appreciate the tip!

Commodities are tough. As an asset class they move to a different beat than the market. If you want to learn about commodities pricing/trading you need to look at everything from how its produced, where its produced, its historical pricing patterns, and the general macro outlook.

 

I haven't the slightest clue when it comes to oil, silver or gold. All of my reading for fun has been focused on investing in equities.

 

For general "you can do it!" type books, Peter Lynch's "Beating the Street" and "One Up on Wall Street" books were enjoyable reads.

 

For some easy to follow investment strategies, Greenblatt's "You Can Be A Stock Market Genius" and "The Little Book that Beats the Market" are accessible and reasonably useful.

 

I've read a lot of value investing themed books. Of all the ideas out there, I think Value Investing has the best track record. Its more advanced and its dry as all hell, but Security Analysis is the bible of value investing. Anything by Buffet, Klarman, Marks, Graham and you're in good hands.

Edited December 19, 2014 by Jauronimo

[GG]

For me, day trading would be out of the question. My 401k is handled by Fidelity, and I trust them, but I worry if relying solely on that account is akin to the proverbial 'eggs in one basket'. I see a lot of ads hawking gold and silver, but the cynic in me wonders 'if it's such a good investment, why are they selling it?'. I'm certainly not too proud to pick up one of the 'for dummies' books, and that's probably not a bad idea since I'm pretty much a dummy when it comes to my knowledge of investing.

 

I appreciate the tip!

 

Just to clarify, having your 401k in a Fidelity is not the same as having your eggs in one basket. That usually refers to someone who invests everything in one security - 100% in company stock, gold, bitcoin, etc.

 

If you have a broadly diversified mutual fund portfolio, including company stock, stock funds, bond funds, etc. You should be good to go.

 

Even if for some very weird, strange reason that Fidelity goes bust, your funds assets should be fairly safe.

[DC Tom]

Just to clarify, having your 401k in a Fidelity is not the same as having your eggs in one basket. That usually refers to someone who invests everything in one security - 100% in company stock, gold, bitcoin, etc.

 

If you have a broadly diversified mutual fund portfolio, including company stock, stock funds, bond funds, etc. You should be good to go.

 

Even if for some very weird, strange reason that Fidelity goes bust, your funds assets should be fairly safe.

 

Azalin, if you're really concerned, diversify by opening an IRA and investing that in non-Fidelity funds. I wouldn't recommend it, as there is such a thing as over-diversification. But it ultimately comes down to your comfort level - if it keeps you up at night, do something about it.

 

But it shouldn't keep you up at night, because GG's right.

 

But if you want to invest in commodities, find a fund like the SPDR Gold Shares (GLD) or one of Fidelity's commodity funds like FCSSX - neither of which I'm recommending here, just presenting them as examples of the principle. If you want to invest in commodities, better to do it in one of those types of vehicles rather than directly, since like Jauronimo said the commodities markets are very different. I've looked into the commodities markets - they scare me. And that's coming from someone who trades options successfully.

[Chef Jim]

 

The industry is headed for a real dark day everyone who now feels warm and safe in their ETFs and market tracking funds get kicked in the balls since the lack of active investment strategies is pushing ridiculous valuations. After the crash in 2008, funds flooded from active strategies into passively managed vehicles. The average man has been sold on the idea that these index tracking ETFs are safe bets. If we see this looming correction that we've been hearing about for the past 18 months, people aren't going to know where to turn.

 

That's why people who do this on their own grossly underperform the market.

 

 

 

And disposable cash.

 

And a full liquor cabinet.

[GG]

Azalin, if you're really concerned, diversify by opening an IRA and investing that in non-Fidelity funds. I wouldn't recommend it, as there is such a thing as over-diversification. But it ultimately comes down to your comfort level - if it keeps you up at night, do something about it.

 

If Fidelity is the 401k manager, they offer a wide array of funds, not just the house Fidelity funds.

 

they key to diversification is also matching the investments to your life goals. If you're younger (not you, but you know what I mean) you can take more risk. If you're nearing retirement or will have major payments due soon, you should dial down risk.

[DC Tom]

If Fidelity is the 401k manager, they offer a wide array of funds, not just the house Fidelity funds.

 

they key to diversification is also matching the investments to your life goals. If you're younger (not you, but you know what I mean) you can take more risk. If you're nearing retirement or will have major payments due soon, you should dial down risk.

 

I know Fidelity's got a huge number of funds...but I didn't know they had non-Fidelity funds. I've also never seen a 401(k) plan that wasn't limited to thirty or so funds, regardless of company.

 

But I've also never seen a situation where 30 funds was too few to choose from.

[Chef Jim]

I know Fidelity's got a huge number of funds...but I didn't know they had non-Fidelity funds. I've also never seen a 401(k) plan that wasn't limited to thirty or so funds, regardless of company.

 

But I've also never seen a situation where 30 funds was too few to choose from.

Typically in a 401k platform they are required to carry other fund families. I love presenting open architecture 401k platforms and plugging in the funds they want. It's huge here in the Bay Area to insert lots of socially responsible funds. I do remember when I first got into this business Fidelity 401k plans had way too many funds in them. People were over diversifying their plans. Some were a mess.

Edited December 19, 2014 by Chef Jim

[Deranged Rhino]

So to be a day trader all I need is a computer, some cash, and time? It's foolproof, right? I can turn $30,000.00 into $300,000 with just a few clicks of a button and lots (and lots) of drinking?

 

That's what I've surmised thus far... and since it's the holiday's I'm already half way there on the last part.

[boyst]

I am just lucky I have family that specializes in this stuff. Jeesh, I never knew how lucky. I know little about retirement plans, etc. but I got off to a good start. A Roth by age 24. Several mutual funds by age 19 that automatically rolled A shares. Of course I havea 401K, too. It amazes me every time that I meet someone who does not have anything saved personally for retirement. Yeeesh.

[Chef Jim]

So to be a day trader all I need is a computer, some cash, and time? It's foolproof, right? I can turn $30,000.00 into $300,000 with just a few clicks of a button and lots (and lots) of drinking?

 

That's what I've surmised thus far... and since it's the holiday's I'm already half way there on the last part.

And here's the real beauty. Seeing you'll be doing lots of trades most of your taxes will be short term gains taxed as income. I remember after the dot bomb there were people out there with hundreds of thousand of dollars in losses but still had a boatload of taxes to pay. Nothing better than that double whammy.

[Deranged Rhino]

And here's the real beauty. Seeing you'll be doing lots of trades most of your taxes will be short term gains taxed as income. I remember after the dot bomb there were people out there with hundreds of thousand of dollars in losses but still had a boatload of taxes to pay. Nothing better than that double whammy.

 

Ouch, that would really suck.

[Chef Jim]

Ouch, that would really suck.

I've seen a tax return with 100 years worth of carry forward losses.

[GG]

Oh, no Charlie Brown,you are an evil financier.

 

http://www.bloomberg.com/news/2014-12-18/metlife-gets-risk-tag-from-u-s-panel-faces-fed-oversight.html

[Azalin]

Just to clarify, having your 401k in a Fidelity is not the same as having your eggs in one basket. That usually refers to someone who invests everything in one security - 100% in company stock, gold, bitcoin, etc.

 

If you have a broadly diversified mutual fund portfolio, including company stock, stock funds, bond funds, etc. You should be good to go.

 

Even if for some very weird, strange reason that Fidelity goes bust, your funds assets should be fairly safe.

 

Thank you. I worked with a counselor at Fidelity, who helped me set my risk level and made suggestions accordingly. I'm probably only going to work for another 5 or 10 years or so (I'm getting old), so I opted for what he described as midway between conservative and risky. I have it broken down like this: 5% in an Interest Income Fund, 25% Bond Funds, 21% international stocks, 25% large caps, 24% medium & small caps. I stopped keeping company stock because it's been pretty flat for quite a long time, but pays a dividend every quarter.

 

Commodities are tough. As an asset class they move to a different beat than the market. If you want to learn about commodities pricing/trading you need to look at everything from how its produced, where its produced, its historical pricing patterns, and the general macro outlook.

 

I haven't the slightest clue when it comes to oil, silver or gold. All of my reading for fun has been focused on investing in equities.

 

For general "you can do it!" type books, Peter Lynch's "Beating the Street" and "One Up on Wall Street" books were enjoyable reads.

 

For some easy to follow investment strategies, Greenblatt's "You Can Be A Stock Market Genius" and "The Little Book that Beats the Market" are accessible and reasonably useful.

 

I've read a lot of value investing themed books. Of all the ideas out there, I think Value Investing has the best track record. Its more advanced and its dry as all hell, but Security Analysis is the bible of value investing. Anything by Buffet, Klarman, Marks, Graham and you're in good hands.

 

Thanks for the tips! I do know enough about commodities to know that I don't dare try getting into them, but I'll definitely give a few of the books you suggest a look.

Azalin, if you're really concerned, diversify by opening an IRA and investing that in non-Fidelity funds. I wouldn't recommend it, as there is such a thing as over-diversification. But it ultimately comes down to your comfort level - if it keeps you up at night, do something about it.

 

But it shouldn't keep you up at night, because GG's right.

 

But if you want to invest in commodities, find a fund like the SPDR Gold Shares (GLD) or one of Fidelity's commodity funds like FCSSX - neither of which I'm recommending here, just presenting them as examples of the principle. If you want to invest in commodities, better to do it in one of those types of vehicles rather than directly, since like Jauronimo said the commodities markets are very different. I've looked into the commodities markets - they scare me. And that's coming from someone who trades options successfully.

 

Speaking of IRAs, someone has suggested I look into a Roth IRA, which I like the idea of since it appears I'll not get soaked on taxes investing in one.

 

Thanks for the advice - all of you. You've given me plenty to consider.

[OCinBuffalo]

Never heard of FINRA I take it.

Yes, the financial industry does have a PR problem. But other than trying to educate the great unwashed, what can be done about it? There's ample evidence in this thread alone to prove they don't want to be educated at all. In fact their firmly held beliefs about markets and finance are entrenched in an ignorance that they're proud of to the point of boasting about it. They cover their ears and say "la-la-la-la-la-la-la-la-la-la! I CANT HEAR YOU!"

It doesn't matter what I've heard. In this thread, I am merely helping jboyst, and the millions like him, to express himself in a way you guys are more likely to understand. Ask jboyst if he's ever heard of it. Ask a whole bar full of people, whether its a dive or a classy place, if they've ever heard of it. The answer is no.

 

That's why I am saying appoint a Commissioner, make a show of it, and make that person just as relevant(otherwise known as in the media all the time) as Roger Goddell. I don't remember the last time I read about FINRA on the front page...of anything. Get it?

 

And again, the converse argument can be made about all finance people: they don't want to educate anyone, because it's beneath them/could cost them $. It's better for both sides, the willfully ignorant, and, the willfully arrogant, to proceed as things are: I get that. You can clearly see the ignorant side, can you also see the arrogant side?

 

And, my original point remains unscathed: you might want to be a little less indifferent, because if we end up with Warren as POTUS? We're all going to wish we were never born. As an industry, doing a little explaining of yourselves, your choices, and how we will avoid another 2007 going forward...would go a long way to busting Warren as the benighted inquisitor that she is.

That's the crux of it and the industry knows it. It's been that way for eons, whether its the evil Wall Street mortgage originators, the speculators of Marx's ire, the moneychangers of medieval times, or basically any market maker in between a seller and a buyer.

 

That's why the industry rarely fights the regulators and knows that it can never win in the court of public opinion, because it's always the evil bankers' fault. When in reality, finance just gives its customers the rope. The customers can use the rope to pull themselves out of a hole or to hang themselves.

Interesting. When I first starting doing health care, this was the exact same attitude. We've changed that attitude, at least amongst my health care clients, significantly. They fight regulators now, and win, routinely. Which is why we don't advertise.

 

There's got to be somebody in this world that is capable of taking on the problems you face and providing a better solution than what you are doing now. Perhaps a good place to start would be recognizing that by being "above" showing up for court...of public opinion, or in the media, or the internet...you aren't going to endear yourselves to anyone, especially those who are willing to hear you out.

 

And, in my business? Blaming the client gets you fired. We would never call "give them the rope, and see what they do with it", professional conduct.

The Elizabeth Warrens of the world think that finance should be more judicious in giving up that rope. The trouble is, nobody knows where that point is. It's much easier for Warren to be the Monday Morning QB. I'm guessing she would have been part of the Barney Frank crowd in 2006 proclaiming there was nothing wrong with the mortgage markets and banks would have been hurting the consumers by stopping all real estate lending.

When I was in Dallas consulting a mortgage company you know, one of the managers at the "factory"(my term...it's a hilarious place where they carried mortgages around in laundry baskets, rolled them on conveyor belts, and hung them on wire lines, and shot them down the lines...the absurdity is hard to put into words), completely and accurately predicted 2006-7 in every detail.

 

He told me everything as he was carrying the "liar basket"...containing the now-famous Barney Frank mortgages...to the desk that handled them. He knew damn well that they had to approve them, or risk the government's wrath. So, they set up the desk and had developed a program in MS Access ( that company literally had "first name" recorded independently in 253 different forms, programs, and even different databases = why I was there) to track these liar mortgages in detail, so that when they inevitably foreclosed, they could beat back the Fannie Mae/regulator nonsense.

 

I believe that if we could have put that guy in front of Congress for just a half hour none of this would have ever happened.

BTW, the real image problem is that the industry doesn't do a good job of admitting that the retail investor is at a disadvantage to the professionals. The big banks acknowledge it, but all the retail hucksters thrive on letting birdbrains think that they can compete with Goldman Sachs. And then the birdbrains blame the entire industry because they were suckered in by investment advice from some loudmouth on TV or radio.

So, if you have correctly defined both the problem and the solution as you see it, where the F is it?

 

I know! You'd rather keep blaming the the client, right?

 

Better: why don't you try telling everyone that they know nothing and you know everything, and they should just STFU and buy a mutual fund, again. That's sure to stop Warren. It won't play right into her hands or anything. Nah. She won't use it as a pretense to demagogue you at all.

 

This thread proves one thing beyond all doubt: Your industry needs a kick in the ass, not a pat on the back. Get off your asses and do something. Do you want Warren to make the case, Hillary to steal the case, get elected, and F things up worse than they already are?

[Nanker]

There is irony in someone calling for a czar to regulate an unregulated industry when the industry is already heavily self-regulated by an overseer.

I get it that there's a PR problem, and how the industry handles it, well GG said it best. But for the rest of the troglodytes there is this:

 

The evil financiers are playing Jew to Phoxahontas Warren's Adolph Hitler.

It's fundamentally Aristotelian and a first cousin to xenophobia. A"populist" rabble-rouser whips up hate of a class by feeding on ignorance and fears to grab and centralize power by promising to "save the people" from an enemy which is not really part of "our country" and works counter to "our" interests.

That's why I used to laugh when I would hear John McCain and others rail against "special interest groups". That turned to mild nausea and now sits at pure revulsion.

 

The only thing most politicians have the guts to do is ask you for your money so they can keep in power. They certainly don't listen to or pay attention to anything but the $s coming in, and they'll tell us any half truth or lie in order to get that from us. B.O. is brilliant at doing this, and Warren is just the latest in a long line of political charlatans. He lies more than Baghdad Bob and sit atop the throne and a vast pile of wealth. He's the most powerful man in the world for the moment but he's a sociopathic liar. He is Putney Swope.

[OCinBuffalo]

There is irony in someone calling for a czar to regulate an unregulated industry when the industry is already heavily self-regulated by an overseer.

I get it that there's a PR problem, and how the industry handles it, well GG said it best. But for the rest of the troglodytes there is this:

 

The evil financiers are playing Jew to Phoxahontas Warren's Adolph Hitler.

It's fundamentally Aristotelian and a first cousin to xenophobia. A"populist" rabble-rouser whips up hate of a class by feeding on ignorance and fears to grab and centralize power by promising to "save the people" from an enemy which is not really part of "our country" and works counter to "our" interests.

If we run with this analogy...then Hitler didn't make Hitler. Hitler was created, or better, allowed to be created, by intellectuals and industrialists, the "we know better" crowd...with the notion being that they could control him/use him as a figure head. They were fools, and many were strung up by their real heads with piano wire.

 

That's exactly what's going on here: Warren isn't the thinking. Warren is the messenger for the "thinkers"...no different than Obama. In both cases, neither Obama or Warren have or will operate by their controller's design(largely because it an awful design, and the rest because Socialists, whether they are of the Stalinist or National design, will never allow others to control them, once they have the power)....just like Hitler.

 

Now, again, we can stick our heads in the sand, call everybody else stupid/too disaffected to bother engaging in a real discussion with...

 

or...

 

we can stop making the same mistakes over and over, and then whining about everbody else's pereceptions, when it is our perceptions that need the kick in the ass.

 

IF "Wall Street" had the proper perspective, I wouldn't be hearing things like "Yeah, I know there's a PR problem, but(insert dopey excuse here)...". Instead, I'd be hearing "we have a PR problem no one in this country can afford for us to have, thus, here's what is being done about it".

 

The simple fact is that by blaming everybody else besides yourselves for the PR problem, "Wall Street" does NOTHING to remove the problem, and makes it worse. Doubly so when they use politicians to cover their asses.

 

The real irony here is you pretending that doing the same thing over and over, will somehow yield a differnt result.

 

When we get up tomorrow, it will still be YOUR problem, you will still be part of "Wall Street", like it or not and therefore, this remains YOUR problem to solve. Calling people names/more finance-babble is not going to fix the problem. Niether is telling me to STFU, or whatever else that isn't: owning up to your part in the 2007 mess, and talking about why it will never happen again.

Edited December 24, 2014 by OCinBuffalo