got this bearish market and not a thing to do with it
August 11, 2011 9:30 AM Subscribe
The market is down and everybody is telling me to BUY BUY BUY. What should I invest in?
Assume that I have already made max contributions to my retirement funds, have bought all the nice clothes I need, own my car, have no debt, have taken a vacation already, and I just want to invest for some good, clean, long-term return fun. What should I invest
a) $1000
b) $5000
c) $10,000
in right now? I want all of your advice!
Assume that I have already made max contributions to my retirement funds, have bought all the nice clothes I need, own my car, have no debt, have taken a vacation already, and I just want to invest for some good, clean, long-term return fun. What should I invest
a) $1000
b) $5000
c) $10,000
in right now? I want all of your advice!
As jaded as this sounds and I'm not a fan of their practices - I'd put money into Goldman Sachs.
posted by bitdamaged at 9:35 AM on August 11, 2011
posted by bitdamaged at 9:35 AM on August 11, 2011
Long-term? Invest in an S&P 500 index fund and let it ride. See also: A Random Walk Down Wall Street.
posted by stopgap at 9:39 AM on August 11, 2011 [1 favorite]
posted by stopgap at 9:39 AM on August 11, 2011 [1 favorite]
Invest in index funds. If your buy-in is over $10,000, Vanguard will give you a lower expense ratio.
posted by deadweightloss at 9:41 AM on August 11, 2011
posted by deadweightloss at 9:41 AM on August 11, 2011
BTW, this is VERY specific to August 11, 2011. I don't want general information--I'd like very specific things!
So you want stock tips? There are two kinds of stock tips, useless ones and illegal ones. Nobody here has information that can beat the market's expectation on any given company. You might as well ask us which number to bet on at the roulette table. If they did have secret information, it would be illegal for you to use it to make investment decisions.
If you want diversification, than as others have said put money in a low cost index fund. They are cheaper than they were a week ago. You may be buying at the bottom, or there could be a 20% drop coming up next week. You never know. If you want to get lucky on the stock market buying individual stocks, good luck, there are people with a lot more insider information than you throwing a lot more time and money at it than you are and most of them lose money.
posted by burnmp3s at 9:51 AM on August 11, 2011 [13 favorites]
So you want stock tips? There are two kinds of stock tips, useless ones and illegal ones. Nobody here has information that can beat the market's expectation on any given company. You might as well ask us which number to bet on at the roulette table. If they did have secret information, it would be illegal for you to use it to make investment decisions.
If you want diversification, than as others have said put money in a low cost index fund. They are cheaper than they were a week ago. You may be buying at the bottom, or there could be a 20% drop coming up next week. You never know. If you want to get lucky on the stock market buying individual stocks, good luck, there are people with a lot more insider information than you throwing a lot more time and money at it than you are and most of them lose money.
posted by burnmp3s at 9:51 AM on August 11, 2011 [13 favorites]
"long-term return" and "VERY specific to August 11, 2011" are ABSOLUTELY contradictory. So,
a) Index funds
b) Index funds
c) Index funds
posted by misterbrandt at 9:53 AM on August 11, 2011 [4 favorites]
a) Index funds
b) Index funds
c) Index funds
posted by misterbrandt at 9:53 AM on August 11, 2011 [4 favorites]
There are two kinds of stock tips, useless ones and illegal ones
I would disagree.
But you need to find out what you are investing for. Is this money that will serve you in the long term? A short-term bet?
posted by Ironmouth at 9:54 AM on August 11, 2011
I would disagree.
But you need to find out what you are investing for. Is this money that will serve you in the long term? A short-term bet?
posted by Ironmouth at 9:54 AM on August 11, 2011
Don't make any rash decisions because you think you need to BUY BUY BUY today. You simply don't. Talking to a financial adviser when possible, or read a book on investing.
posted by grouse at 10:12 AM on August 11, 2011
posted by grouse at 10:12 AM on August 11, 2011
Don't get financial advice from the television.
Index funds.
posted by Sphinx at 10:17 AM on August 11, 2011
Index funds.
posted by Sphinx at 10:17 AM on August 11, 2011
"long-term return" and "VERY specific to August 11, 2011" are ABSOLUTELY contradictory. So,
I disagree with this, although I agree with your conclusion of index funds. Warren Buffet himself says that the way to make money is to think long-term, but to buy I bargain. In fact, I just swapped half of my long-term savings that have been sitting in a moderate growth fund into a more aggressive index fund that had dropped precipitously over the last few days. This isn't money I need tomorrow and I can wait the ten years it may take to be a positive investment, but I bought it at a hilariously low price.
INDEX FUNDS.
Also, make no mistake, you won't make a quick buck today. Buying today is a smart thing to do because you can get a great quality, high-return fund for a cheap price. That doesn't mean it'll be going up any time soon.
posted by InsanePenguin at 10:20 AM on August 11, 2011
I disagree with this, although I agree with your conclusion of index funds. Warren Buffet himself says that the way to make money is to think long-term, but to buy I bargain. In fact, I just swapped half of my long-term savings that have been sitting in a moderate growth fund into a more aggressive index fund that had dropped precipitously over the last few days. This isn't money I need tomorrow and I can wait the ten years it may take to be a positive investment, but I bought it at a hilariously low price.
INDEX FUNDS.
Also, make no mistake, you won't make a quick buck today. Buying today is a smart thing to do because you can get a great quality, high-return fund for a cheap price. That doesn't mean it'll be going up any time soon.
posted by InsanePenguin at 10:20 AM on August 11, 2011
I think ETFs are the way to go. You can go broad, sector-specific, etc., and they often have very low expense-ratios (see: Vanguard Funds). Also, they trade like stocks so there is no minimum and your portfolio is liquid.
Some of the ones I own in my own little personal (non-retirement) portfolio:
VTI
VWO
VOT
VEA
VO
EWZ
CEW
REM
Honestly, if you're making one decent size buy right now, I say dump it all in VTI (total market fund) and let it ride. If you're investing for long-term, don't even check the thing more than once a month or so. And if the market tanks another 600 points, well that's your cue to buy in again if you can afford it. Time will do the rest!
posted by Ekim Neems at 10:24 AM on August 11, 2011 [1 favorite]
Some of the ones I own in my own little personal (non-retirement) portfolio:
VTI
VWO
VOT
VEA
VO
EWZ
CEW
REM
Honestly, if you're making one decent size buy right now, I say dump it all in VTI (total market fund) and let it ride. If you're investing for long-term, don't even check the thing more than once a month or so. And if the market tanks another 600 points, well that's your cue to buy in again if you can afford it. Time will do the rest!
posted by Ekim Neems at 10:24 AM on August 11, 2011 [1 favorite]
One guideline for long term investing is that it is always a good time to buy.
Note about VTI. While it is a total market fund, it is also market cap weighted. That means that, for the most part, you are investing in large companies and not much else. Nothing wrong with that, but if you actually want to get some small cap and medium cap companies in your portfolio (and I'm not saying you should or should not) then you might do better to invest in a funds that specifically cater to them.
But you'll never catch me arguing against Vanguard index funds.
posted by It's Never Lurgi at 10:31 AM on August 11, 2011 [1 favorite]
Note about VTI. While it is a total market fund, it is also market cap weighted. That means that, for the most part, you are investing in large companies and not much else. Nothing wrong with that, but if you actually want to get some small cap and medium cap companies in your portfolio (and I'm not saying you should or should not) then you might do better to invest in a funds that specifically cater to them.
But you'll never catch me arguing against Vanguard index funds.
posted by It's Never Lurgi at 10:31 AM on August 11, 2011 [1 favorite]
I picked up a bunch of APPL over the past few days. They are a great value by any measure right now.
posted by lohmannn at 10:37 AM on August 11, 2011 [1 favorite]
posted by lohmannn at 10:37 AM on August 11, 2011 [1 favorite]
Dividend-paying broad index funds in a DRIP.
Set it and forget it.
posted by blue_beetle at 10:41 AM on August 11, 2011 [1 favorite]
Set it and forget it.
posted by blue_beetle at 10:41 AM on August 11, 2011 [1 favorite]
Response by poster: My portfolio is currently a 50/50 split. I have some extra cash that I'd like to invest. I'm definitely not trying to make money tomorrow or even six months from tomorrow, but it'd be nice to see it grow eventually.
posted by 200burritos at 12:16 PM on August 11, 2011
posted by 200burritos at 12:16 PM on August 11, 2011
My portfolio is currently a 50/50 split
50/50 split of what?
posted by burnmp3s at 12:28 PM on August 11, 2011
50/50 split of what?
posted by burnmp3s at 12:28 PM on August 11, 2011
Seconding DRIPs.
Index funds are also pretty safe.
GOOG and AAPL are currently undervalued, but you'll get as many people telling you that these can't keep growing at this rate and are overvalued and "the sky is falling" and if these were so great, then why isn't everyone in them.. or conversely that everyone is already in them so they can't go up... etc... I still say they are undervalued.
posted by jmmpangaea at 12:58 PM on August 11, 2011
Index funds are also pretty safe.
GOOG and AAPL are currently undervalued, but you'll get as many people telling you that these can't keep growing at this rate and are overvalued and "the sky is falling" and if these were so great, then why isn't everyone in them.. or conversely that everyone is already in them so they can't go up... etc... I still say they are undervalued.
posted by jmmpangaea at 12:58 PM on August 11, 2011
Best answer: I'd suggest you consider spending some time at The Motley Fool website. There is a lot of information and a lot of sound investing advice there.
The biggest keys to successful stock investing, in my experience, and I have been very successful to date, is 1) buy with an eye to holding the stock for at least a couple of years, often longer; 2) look hard at the company fundamentals, and aim for companies that are profitable, well run, in reasonably sound industries, and free of high levels of debt; 3) don't forget to factor in whether the company pays dividends; and 4) keep a fairly close eye on your stocks after you buy, including checking recent news and how they are performing against the market as a whole.
I applaud your instinct to buy now. It is when the market panics and stock prices fall to these sorts of bargain levels that the shrewd investor buys and makes money over the long haul.
posted by bearwife at 5:22 PM on August 11, 2011
The biggest keys to successful stock investing, in my experience, and I have been very successful to date, is 1) buy with an eye to holding the stock for at least a couple of years, often longer; 2) look hard at the company fundamentals, and aim for companies that are profitable, well run, in reasonably sound industries, and free of high levels of debt; 3) don't forget to factor in whether the company pays dividends; and 4) keep a fairly close eye on your stocks after you buy, including checking recent news and how they are performing against the market as a whole.
I applaud your instinct to buy now. It is when the market panics and stock prices fall to these sorts of bargain levels that the shrewd investor buys and makes money over the long haul.
posted by bearwife at 5:22 PM on August 11, 2011
@jmmpangaea AAPL undervalued? not sure about that
You're potential to loose money investing in an index fund NOW is low:
check out
DIA
SPDR
posted by BobbyDee at 10:36 AM on August 12, 2011
You're potential to loose money investing in an index fund NOW is low:
check out
DIA
SPDR
posted by BobbyDee at 10:36 AM on August 12, 2011
@BobbyDee: AAPL is trading currently with a P/E of 14.79 and forward P/E of 11.63, while growing earnings by approx 20% per year. I'd call that cheap, but that's only my opinion.
posted by jmmpangaea at 10:40 AM on August 12, 2011
posted by jmmpangaea at 10:40 AM on August 12, 2011
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posted by 200burritos at 9:31 AM on August 11, 2011