Talking stocks, trading, and investing in general

[Piobaire]



OK need some investing advice/help and not sure if this is the right place to post.  New into the professional job market (couple months now) and don't have too much to invest.  Maybe a couple thousand give or take.  What should I be looking at doing currently?  Obviously I'm looking at making the most I can from it within the shortest amount of time, but tips and tricks from my finance courses in college are slipping my mind right now.  Stocks have always interested me, but not entirely sure of techniques and such for best trading investments.

Any advice on what I should look into?  Or multiple options?  

Two questions:

1) Have you maxed your 401(k) yet?
2) Have you maxed a traditional or ROTH IRA yet?

If the answer to either of those is, "No" then I suggest you do that first.

 

[stevent]

Gwph!!!

 

[jbarwick]

+1 on an S&P ETF. any reason you would go for spider over vanguard or others?

laxer if you set up an account direct with vanguard there are no trading fees.

I didn't know where his account was set up so I just said the S&P SPDR or an ETF of some sort.

 

[tropics]

gotcha.

 

[SkinnyGoomba]



Two questions:

1) Have you maxed your 401(k) yet?
2) Have you maxed a traditional or ROTH IRA yet?

If the answer to either of those is, "No" then I suggest you do that first.

+1

In addition to this, it's important to have a proper safety net in place, proportioned to your expenses. It's good to be able to go 6mo out of pocket without having to cut into your investments. Some would suggest more (two years), but I would rather not have such a large cash/near cash position.

 

[Concordia]

ETFs often have higher expense ratios than their equivalent indexed mutual funds, as well as presenting trading costs to enter and exit. You also run the risk that their derivative exposure or a short-seller's action could cause it to blow up. Not a big risk, necessarily, but if you're not needing hourly liquidity and you have time to get organized, you're usually better off in a fund.

 

[austinite]



ETFs often have higher expense ratios than their equivalent indexed mutual funds, as well as presenting trading costs to enter and exit. You also run the risk that their derivative exposure or a short-seller's action could cause it to blow up. Not a big risk, necessarily, but if you're not needing hourly liquidity and you have time to get organized, you're usually better off in a fund.

I thought it was the opposite. For instance, VTI has a lower expense ratio than does it's equivalent index fund VTSMX (.05 vs .17). The advantage of the index fund is that it can be purchased without commissions and in any increment. You are right that the ETF market order has risk, though I would argue that it is irrelevant for a long term investor.

At the end of the day, both options are going to get you far more diversification and save you money on taxes in comparison to the investing style in this thread!

 

[GreenFrog]

lol my brokerage account's value went up 7X because of my apple position and the impending stock split. It's obviously a temporary system error because they made my share position 7x larger without adjusting the share price, but I was shocked for a microsecond when I logged in today.

My networth number was suddenly 3X what it actually is.

 

[jbarwick]

+1

In addition to this, it's important to have a proper safety net in place, proportioned to your expenses. It's good to be able to go 6mo out of pocket without having to cut into your investments. Some would suggest more (two years), but I would rather not have such a large cash/near cash position.

I agree on the safety net as well but shouldn't have assumed this. We currently have 6 months mortgage and utilities but will bump it up to include all expenses shortly. We have relatively stable jobs and could live on 1 income but have some safety is great and will only rise. 2 years is downright crazy! I have friends with over 1 year of expenses and they just say it is to feel safe though again, they are both in stable jobs with very marketable skills if something were to happen to either job.

 

[Piobaire]



I agree on the safety net as well but shouldn't have assumed this.  We currently have 6 months mortgage and utilities but will bump it up to include all expenses shortly.  We have relatively stable jobs and could live on 1 income but have some safety is great and will only rise.  2 years is downright crazy!  I have friends with over 1 year of expenses and they just say it is to feel safe though again, they are both in stable jobs with very marketable skills if something were to happen to either job.

Short term disability. You can either buy a policy or just have some money on hand.

 

[Concordia]



I thought it was the opposite. For instance, VTI has a lower expense ratio than does it's equivalent index fund VTSMX (.05 vs .17). The advantage of the index fund is that it can be purchased without commissions and in any increment. You are right that the ETF market order has risk, though I would argue that it is irrelevant for a long term investor.

At the end of the day, both options are going to get you far more diversification and save you money on taxes in comparison to the investing style in this thread!

I see that Vanguard's ETFs are getting a lot less expensive. The S&P 500 option is 5 bp, same as the fund. It may still be different in other shops.

Anyway, both flavors will indeed get you started in the right direction. But we're still largely ignorant of the risks in ETFs, and should be cautious about relying too much on them.

 

[papa kot]

I am not a particular fan of ETFs as they miss the whole point of mutual funds: Buy and hold.

While I am not certified to provide financial advising, I can tell you my game. Go long on low cost index funds and do not panic.

 

[jbarwick]

Short term disability. You can either buy a policy or just have some money on hand.

Short-Term Disability does not help if you are fired from your job. Most office type environments offer STD these days though at a 50%-60% benefit which is better than nothing. My old company was trying to squeeze every penny they could out of the employee which is probably why they started losing talent. I let for opportunity and partly because of the "total pay" package they offered.

 

[djblisk]

What do you guys think of that Apple split? I really think the Iwatch is going to be a bust.

 

[Piobaire]



Short-Term Disability does not help if you are fired from your job.  Most office type environments offer STD these days though at a 50%-60% benefit which is better than nothing.  My old company was trying to squeeze every penny they could out of the employee which is probably why they started losing talent.  I let for opportunity and partly because of the "total pay" package they offered.

I never said it helps if fired from your job now did I? You stated you could not see why your friends with "very marketable skills" had money in the bank. My entire point was that one has emergency money for more reasons than a hedge against unemployment.

Also, most office type jobs do offer it but the employee pays for it, with only upper management getting paid for policies. As I said previously, you can pay premiums for it, or have some money in the bank ear marked for just such an emergency.