Investing Seems like a Scam...

KaneKungFu123 · #1 06-10-2005, 11:38 AM

how do you research a stock? how do you make predictions when all your thoughts should have already been accounted for? someone has to win, someone has to lose. the little guy is the fish right?

well. i have about 60K that i want to invest, and i plan to make 40-50K/month in the upcoming monthes before taxes from poker, and i would like to invest this money, id be very happy with a 10% annual return. I want very little risk though.

Paluka · #2 06-10-2005, 11:51 AM

[ QUOTE ]
how do you research a stock? how do you make predictions when all your thoughts should have already been accounted for? someone has to win, someone has to lose. the little guy is the fish right?

well. i have about 60K that i want to invest, and i plan to make 40-50K/month in the upcoming monthes before taxes from poker, and i would like to invest this money, id be very happy with a 10% annual return. I want very little risk though.

[/ QUOTE ]

There is no way to get 10% return with very little risk when interest rates are under 4%.

TGoldman · #3 06-10-2005, 11:59 AM

I'd recommend this type of allocation or something similar to it...

50% of your portfolio in a the total stock market index (VTI)
30% in an international stock market index (EFA)
20% in a bond index (AGG)

It's simple and easy to manage, yet still a well diversified portfolio. The expense ratios are all very low as well. You can then focus most of your time and energy on poker without having to worry about your investments. This type of portfolio should diversify away a lot of your risk while still allowing you to have 80% of your entire portfolio in stocks.

RedManPlus · #4 06-10-2005, 02:02 PM

[ QUOTE ]
how do you research a stock? how do you make predictions when all your thoughts should have already been accounted for? someone has to win, someone has to lose. the little guy is the fish right?

[/ QUOTE ]

Exactly.

The little guy is the fish...
And the securities business has 100 great ways to skin you.
It's the whole point of the industry.

Even though...
"Where Are the Customer's Yachts?" was written 70 years ago...
Most people still seem to believe...
That your broker wants to "help" you.

Both previous answers are good advice.

You cannot get a "riskless" return above 3-4%...
And you should definitely diversify...
Using index funds with very low fees (below 1%).

It's not a bad time to buy stocks for the long term.

The US stock market is still 15% below it's 2000 peak...
And tech stocks (NASDAQ Composite) are still 50% lower.

But I would be very cautious about bonds...
There's a lot of risk there.
If the US 10 Year Note goes from 4% to 5%...
You lose roughly 25% of your investment.

And in terms of international...
Make sure any "global" fund...
Contains ONLY high grade stocks from mature economies.
(Go to their web site and check the portfolio).

Investing in "emerging" countries...
Is gambling pure and simple...
And does not fit the risk profile you appear to want.

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joshman1204 · #5 06-10-2005, 02:11 PM

[ QUOTE ]
someone has to win, someone has to lose.

[/ QUOTE ]

This is not true in the equities market. Equities are not a zero sum market like other investment markets (i.e. forex)

James Boston · #6 06-10-2005, 02:21 PM

Brokers are salesmen, no different that any other salesman. Their boss is expecting them to push on the clients what is good for the company. But, it's not fair to say that:

[ QUOTE ]
The little guy is the fish...
And the securities business has 100 great ways to skin you.
It's the whole point of the industry.

[/ QUOTE ]

Nobody's forcing you to cling to your broker's every word. Sure, you'll always pay the commissions, but you don't have to buy/sell, buy/sell everytime you're told.

To the OP, researching stocks isn't an easy thing to do. I, by no means, can come close to understanding it fully or explaining it to you. But there are ways to learn. And don't try to figure out the next big things constantly. It seems to me that too many people are pre-occupied with finding the next Microsoft. If you can find it, great. However, don't try to convince yourself you've found it. That, IMO, is what hurts so many people in the long run. Make solid decisions, and the stock market can be rewarding.

RunDownHouse · #7 06-10-2005, 02:50 PM

Clearly, capital markets are simply one giant scam dreamed up by a few old men scheming ways to get every penny out of the normals. At least you've seen the light.

NoTalent · #8 06-10-2005, 03:52 PM

If you are making 40-50K a month from poker, why don't you hire a financial planner to make some of these decisions for you since you don't seem to have any idea of how to invest. I wouldn't throw your money around from the recommendations from a message board.

Voltron87 · #9 06-11-2005, 05:52 PM

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If you are making 40-50K a month from poker, why don't you hire a financial planner to make some of these decisions for you since you don't seem to have any idea of how to invest. I wouldn't throw your money around from the recommendations from a message board.

[/ QUOTE ]

well said

RYL · #10 06-11-2005, 06:52 PM

[ QUOTE ]
If you are making 40-50K a month from poker, why don't you hire a financial planner to make some of these decisions for you since you don't seem to have any idea of how to invest. I wouldn't throw your money around from the recommendations from a message board.

[/ QUOTE ]

I concur.