On April 07 2015 00:19 Numy wrote: The way I see it is the same as gym stuff. The wealth of information out there sometimes makes it hard to really gauge the quality of the information so having someone you know/trust give you the information is less risky. Also just knowing it's taken care of means you don't have to actively worry about it.
I'm all for paying money to save time and effort, but there should be an acceptable limit. Dumping everything in an index is far superior to paying for an advisor for 95%+ of the population however. Especially considering a broad market index like the S&P500 outperforms the vast majority of advisors while not needing a fee. Jsut to take Wave's example - if you want $2,000 returns, you'd've needed to invest $6,000 in the S&P500 through an index like VOO or SPY on April 1, 2013, and it would've cost you around ~$10 - $20 in fees. It's better returns than what any advisor can be reasonably expected to generate.
Advisors are helpful for when you have a complex financial situation, where an advisor can help you navigate tax consequences, adjust strategies for specific returns at specific times, or just for generally sorting through the paperwork of managing a large portfolio. Most of that typically applies only to individuals with very large liquid assets.
There can be something to be said about finding an advisor during a bear market, but in a bull market there's very little benefit. It's why hedge funds, for example, are drastically underperforming the index right now.
What do you use to do this yourself then? I am woefully ignorant for these type of things but would like to know more. Or a place you recommend I can read up on it?
I can do it pretty easily through my bank. They're pretty cheap as far as investing goes. €10 a quartile for the account, and fees are not high for transactions. The online interface is really good too, you can check out everything you want on the funds/stocks. Prices, fees, history, information, etc.
@Cheep: What would you do to balance out the risk for economic hardship? Bonds? Maybe gold?
Depends on the time horizon of your investment. If you're saving for long-term you just ignore it and assume the business cycle will eventually recover. Keep cash on hand for true emergencies. The beauty of an index fund is that you're never really gonna get wiped (the worst we've seen in recent memory was down 50% over two years from 2007 - 2009, which honestly isn't that bad considering how awful the economy was at the time; again, the comparison is with individual stocks, many of which went down that much in less than a single year, or even worse).
Your individual situation might of course be different, but I think most individuals with a modest amount of money to invest are probably looking to 1. protect from inflation and 2. get some modest growth over an extended period of time. Assuming most people on this forum are young, you're not really looking to protect capital above all else at your current age. Bonds/gold/other defensive investments are more for older folks nearing retirement who want to protect their money. Or for day traders looking to squeeze pennies out of micromovements. I'm not a debt/commodities expert and I don't claim to understand it, but I can say they're not that appropriate for young people who just want some minimal effort, small growth investments.
On April 07 2015 00:45 Carnivorous Sheep wrote: Depends on the time horizon of your investment. If you're saving for long-term you just ignore it and assume the business cycle will eventually recover. Keep cash on hand for true emergencies. The beauty of an index fund is that you're never really gonna get wiped (the worst we've seen in recent memory was down 50% over two years from 2007 - 2009, which honestly isn't that bad considering how awful the economy was at the time; again, the comparison is with individual stocks, many of which went down that much in less than a single year, or even worse).
Your individual situation might of course be different, but I think most individuals with a modest amount of money to invest are probably looking to 1. protect from inflation and 2. get some modest growth over an extended period of time. Assuming most people on this forum are young, you're not really looking to protect capital above all else at your current age. Bonds/gold/other defensive investments are more for older folks nearing retirement who want to protect their money.
Thanks for the input man. I'm probably not going to touch that money for another 5 years so it might as well accrue some worth.
On April 07 2015 00:51 JonGalt wrote: Thanks Cheep. I have only received 1 paycheck so far so I think I gotta wait a minute before investing but I will definitely be doing that soon.
On April 07 2015 00:41 Ketara wrote: If you invest in gold you're either a college age girl in India, or you watch too much Fox News.
Gold is a commodity. As an asset they're even more volatile than stocks, and largely depend on the state of the economy.
If you want something stable and riskfree, government bonds are safe.
I can't wait until the US government defaults on its debt and the rest of the world switches to the gold standard in response. At which point I will crucify you on a cross of gold while asking "WHERE'S YOUR GOD NOW TOLKIEN??"
On April 07 2015 00:41 Ketara wrote: If you invest in gold you're either a college age girl in India, or you watch too much Fox News.
Gold is a commodity. As an asset they're even more volatile than stocks, and largely depend on the state of the economy.
If you want something stable and riskfree, government bonds are safe.
I can't wait until the US government defaults on its debt and the rest of the world switches to the gold standard in response. At which point I will crucify you on a cross of gold while asking "WHERE'S YOUR GOD NOW TOLKIEN??"
On April 07 2015 00:41 Ketara wrote: If you invest in gold you're either a college age girl in India, or you watch too much Fox News.
Gold is a commodity. As an asset they're even more volatile than stocks, and largely depend on the state of the economy.
If you want something stable and riskfree, government bonds are safe.
I can't wait until the US government defaults on its debt and the rest of the world switches to the gold standard in response. At which point I will crucify you on a cross of gold while asking "WHERE'S YOUR GOD NOW TOLKIEN??"
r u ron paul?
honestly i'd rather ron paul than ted cruz, who most recently mentioned that the first amendment was all about keeping government out of religion, not religion out of government. and that we need to establish a Christianity based law system. nothing against Christianity, but theocracy is not for me.
On April 07 2015 00:41 Ketara wrote: If you invest in gold you're either a college age girl in India, or you watch too much Fox News.
Gold is a commodity. As an asset they're even more volatile than stocks, and largely depend on the state of the economy.
If you want something stable and riskfree, government bonds are safe.
I can't wait until the US government defaults on its debt and the rest of the world switches to the gold standard in response. At which point I will crucify you on a cross of gold while asking "WHERE'S YOUR GOD NOW TOLKIEN??"
r u ron paul?
honestly i'd rather ron paul than ted cruz, who most recently mentioned that the first amendment was all about keeping government out of religion, not religion out of government. and that we need to establish a Christianity based law system. nothing against Christianity, but theocracy is not for me.
On April 07 2015 00:41 Ketara wrote: If you invest in gold you're either a college age girl in India, or you watch too much Fox News.
Gold is a commodity. As an asset they're even more volatile than stocks, and largely depend on the state of the economy.
If you want something stable and riskfree, government bonds are safe.
I can't wait until the US government defaults on its debt and the rest of the world switches to the gold standard in response. At which point I will crucify you on a cross of gold while asking "WHERE'S YOUR GOD NOW TOLKIEN??"
r u ron paul?
honestly i'd rather ron paul than ted cruz, who most recently mentioned that the first amendment was all about keeping government out of religion, not religion out of government. and that we need to establish a Christianity based law system. nothing against Christianity, but theocracy is not for me.
EPT
