AYO: One of you money-minded niggas gimme a crash course on investing

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Replies

  • Sh0tSh0t Posts: 1,162
    edited August 2011
    Read Fooled by Randomness by Nassim N. Taleb before you put a dollar anywhere.

    IF you don't have at least 25,000 to invest, don't bother beyond funding your IRA. Under 25,000 you are subject to the Day Trade rule, which is put in place exactly so little people lose money.

    If you have a job that pays 50k, live off 25k for a year or two, then use that 25-50k to start trading/"investing". IF you have less than that, your time would be much better spent using the money to reinvest in your career.

    To really make money in the markets, you have to treat it like a full time job. Do not expect to just "do a little investing on the side" and get any returns worth noting. And until you have certain amount of volume to your trades, fees will erase many of your profits.

    I recommend a bare minimum of 25,001 dollars to get above the day trading rule.
  • American.LooAmerican.Loo Posts: 4,082
    edited August 2011
  • ChicagoBearsChicagoBears Posts: 758
    edited August 2011
    Good information has been dropped. But honestly, I laugh at people who invest in stocks on their own. That's extremely foolish, why? The average people does not have time to do a fundamental analysis of a stock. They probably don't know how to either. Anyone asking what fundamental analysis is..in short it is how analysts come up with the intrinsic or supposed "actual," value of a stock. So you have to be extremely careful when investing in stocks. The best way to invest in stocks has already been mentioned in this thread....mutual funds.
  • Sh0tSh0t Posts: 1,162
    edited August 2011
    I would put mutual funds near the bottom of the list. That's also why in my first sentence i recommended that book. Half of it is spent exposing exactly why mutual funds are a bad idea.

    If you want to be braindead about stock investing, just buy an index fund, do not join a mutual.
  • redhandedbanditredhandedbandit Posts: 2,598
    edited August 2011
    find an industry you like or already follow I havent invested but but for instance the take two interactive (2k video games) stock went from 7 to 14 after the holiday season when la noire and 2k11 with jordan were released a couple years back when apple was going to release orginal ipad and iphone 4 stock jumped 100 dollars a share but it also had a higher buy in rate..when bp had the oil spill was a good time to invest in their stock because it dropped significantly and was almost sure to recover stay up on current events


    disclaimer i havent ever invested but ive been watching the market for a few years now
  • Sh0tSh0t Posts: 1,162
    edited August 2011
    Everything changes when you use real money

    Cherry picking past events and thinking about how they were good investments really clouds what's it's like when the future is unknown and real money is at play
  • blakfyahkingblakfyahking Posts: 14,212
    edited August 2011
    Ok. The 1st thing you need to decide is how you want to build your portfolio. If you're single with no kids and you like to take risks, for possible big returns, invest in small cap stocks. If you're trying to make money grow, invest in large-cap, to mid-cap stocks.

    Also trading and investing are two different things. Investing is with the intention of hanging on for years, where trading can range from a day (day trading) to a few weeks. (Swing trading.)

    I'm going to assume you're starting out. You should start out with Mutual Funds and/or EFT's (Exchange Traded Funds). Also understand that if you're not familiar with the game, you'll be paying a financial adviser for instruction and doing your trades which can affect your return. If you have an understanding of the game and want to trade/invest infrequently, you can holla at a discount broker. (i.e. Charles Schwab) You'll be doing you're research, as you should be regardless, but the rates will be lower.

    There is also Commodities, bonds, options, futures, and currency trading. Avoid derivatives.

    As a matter of fact, as Pico mentioned. get the for dummies books. You can find them on the net in PDF for free. Look for:

    Stock Investing For Dummies

    Mutual Funds For Dummies

    Trading For Dummies

    Day Trading For Dummies

    EFT's for dummies

    the bolded ARE derivatives fam
  • BOSSExcellenceBOSSExcellence Posts: 11,198
    edited August 2011
    come to vegas.. least they give u free alcohol while u give ur money away. lol
    lose it all on a players card and they'll comp u a suite too..
  • MadbeatsMadbeats Posts: 544
    edited August 2011
    I mostly came on this thread to learn, not give advise. I have been told Roth IRAs are the way to go.
  • blakfyahkingblakfyahking Posts: 14,212
    edited August 2011
    Madbeats wrote: »
    I mostly came on this thread to learn, not give advise. I have been told Roth IRAs are the way to go.

    depends on your income and your financial goals
  • blakfyahkingblakfyahking Posts: 14,212
    edited August 2011
    what's up with niggaz constantly recommending commodities?

    do niggaz really know what commodities are? :(
  • black caesarblack caesar Posts: 7,471
    edited August 2011
    what's up with niggaz constantly recommending commodities?

    do niggaz really know what commodities are? :(

    Nigga I'm referring to soft commodities agricultural products that are grown. salt, sugar, coffee beans, soybeans, rice, wheat. You're thinking hard commodities.
  • black caesarblack caesar Posts: 7,471
    edited August 2011
    the bolded ARE derivatives fam

    I'm aware. I was just telling him different financial instruments. I said in the same sentence to avoid them.
  • Platinum FalconPlatinum Falcon Posts: 28
    edited August 2011
    i wouldnt even touch the stock market right now until things get settled down with congress...especially since you are just starting. Throw that cash in a CD untill you are truly ready to invest.

    I agree. Just make sure when choosing a CD make sure you are at least beating inflation it dosen't matter by what percentage just make sure you are beating it so that way you aren't losing money. Another thing to be wary of since the economy is going up and down now try to go for the short-term higher yeilding CDs 12-months are good because it is just short enough that if the market does better and you find a higer-yeilding CD you are not locked into that same rate when you could lock into the higher yeilding percentage rate and when the market starts sucking you will be locked into that higher rate.
    Alternatively if you want to take some risks, you could try peer-to-peer loaning, I also deal with this because I don't want to lend my money to big banks and corporations, but that's just me being a humanitarian.
  • blakfyahkingblakfyahking Posts: 14,212
    edited August 2011
    Nigga I'm referring to soft commodities agricultural products that are grown. salt, sugar, coffee beans, soybeans, rice, wheat. You're thinking hard commodities.

    what's the difference?

    a commodity is a commodity champ

    there really isn't too much risk between in investing in metals vs. "soft" commodities.............never heard that term before

    the average nigga is not a farmer, so why tell them to fuck with some shit they would have no use for if it was delivered to their doorstep?
    I'm aware. I was just telling him different financial instruments. I said in the same sentence to avoid them.

    I got you.

    the way I read it, I thought you might have been implying something else.

    I agree with what you said about derivatives, just wanted to make sure it was clear tho


    there are a lot of derivatives out there, and it's easy too get them confused
  • Sh0tSh0t Posts: 1,162
    edited August 2011
    Soft commodity is a term. It refers to things grown/raised. The perishable nature of such items gives them a certain present-bias.

    I'm a fan of commodities, all types. Don't be scared of derivatives, either.

    You can't have one investment strategy if you want to make money all the time. Different options are better at different types.

    Expecting growth? Go long stocks/commodities, buy calls
    Pessimistic? Learn to short, buy puts
    Tons of volatility? Complex options

    etc

    What strategy you are using at any given time is dependent on the market. You have to take what the market gives you.
  • blakfyahkingblakfyahking Posts: 14,212
    edited August 2011
    Sh0t wrote: »
    Soft commodity is a term. It refers to things grown/raised. The perishable nature of such items gives them a certain present-bias.

    I'm a fan of commodities, all types. Don't be scared of derivatives, either.

    You can't have one investment strategy if you want to make money all the time. Different options are better at different types.

    Expecting growth? Go long stocks/commodities, buy calls
    Pessimistic? Learn to short, buy puts
    Tons of volatility? Complex options

    etc

    What strategy you are using at any given time is dependent on the market. You have to take what the market gives you.

    props for the bolded..........didn't know that


    I don't know about "present-bias" tho................cause most "soft" commodities are traded with futures

    so there is really nothing present about them





    I think I might need to finished updating my investment related threads I used to drop in here to make sure mofos aren't passing out wrong info

    where were all you investment minded cats before when we 1st started contributing to this forum section? LOL

    a lot of jewel are in the threads on the older pages...............sion put out a lot of good info
  • SionSion Posts: 18,751
    edited August 2011
    Props & major respect to everyone dropping knowledge out chea....


    Aye Loo if you want some advice you can go to this thread:

    http://community.allhiphop.com/showthread.php?246886-Sion-s-How-To-Invest-Thread-%5BEverything-you-need-to-invest-properly-and-much-more-%5D&p=3149114&posted=1#post3149114

    The only thing I'd like to add tho is that T/S u should try extra hard to stay away from Mutual funds they're not all peaches & cream....

    Stay away from Mutual Funds. Mutual funds aren't what they claim to be. MOST managers can't beat the market, but they earn a ton of money off the commissions they charge u. From a manager's perspective, even if ur portfolio dips we get paid. & Often times managers are switched w/o ur consent (assuming ur fund is with a large bank or firm with multi-billions under mgmt). For a beginner stay away. Unless you've got a half a mil to 1mil to invest (& even then I'd tell u to stay away or take ur money to a firm that specializes in High Net Worth Individuals) in them STAY AWAY. You don't have to pay a significant amount of money for lackluster to mediocre performance.


    The only mutual funds I'd recommend are the mutual funds that are ran by value investors.... & if u can ASK the money manager what his track record looks like over 5-10 years.
  • SionSion Posts: 18,751
    edited August 2011
    No. I wouldn't recommend stocks without at least $10g's. You can do without it, but again, I wouldn't. Start with Mutual Funds and EFT's. You can get down starting with $1000. Hell some places will let you invest in Mutual Funds for $50 a month! Here's a list of the best Mutual Fund places:

    1. The Vanguard Group

    2. Fidelity Investments

    3. Dodge & Cox

    4. Oakmark

    5.T. Rowe Price

    6. TIAA-CREF

    7. Artison

    8. Harbor

    9. Master's Select

    10. USAA (Yes the auto insurance company)

    Best Discount Brokers

    1. Charles Schwab

    PLACES TO AVOID

    1. ANY BANK (Learned this the hard way in the 90's)

    2. Brokers that work on commission. (Brokers are sells people.)

    3. So called financial planners



    Also when you're looking at Mutual funds, be sure to review the prospectus to determine if the mutual fund is a loaded funds. AVOID loaded funds at all costs. Loaded funds are a sneaky way for some advisors and brokers to get paid more. This is explained in the Mutual Funds for dummies book. It affects your bottom line. Also look at the annual income sheet and statement of additional information.

    This is a good list & PAY ATTENTION TO THE BOLDED.
  • Sh0tSh0t Posts: 1,162
    edited August 2011
    props for the bolded..........didn't know that


    I don't know about "present-bias" tho................cause most "soft" commodities are traded with futures

    so there is really nothing present about them
    The term "future" has nothing to do with the nature of the item, it's just a description of the contract: money now, delivery later. The opposite of "buy now, pay later". It originated from agricultural goods markets. Farmers like money during the winter, so they sell contracts for their crops in December and deliver "at a future date" the crops.

    Futures contracts are the standardized, exchange listed way of doing this. These arrangements are also done outside of the exchanges(forwards).

    The quality of the items, and the risk they might spoil or whatever is a major part of the price action in the forward market and futures exchanges.
  • blakfyahkingblakfyahking Posts: 14,212
    edited August 2011
    Sh0t wrote: »
    The term "future" has nothing to do with the nature of the item, it's just a description of the contract: money now, delivery later. The opposite of "buy now, pay later". It originated from agricultural goods markets. Farmers like money during the winter, so they sell contracts for their crops in December and deliver "at a future date" the crops.

    Futures contracts are the standardized, exchange listed way of doing this. These arrangements are also done outside of the exchanges(forwards).

    The quality of the items, and the risk they might spoil or whatever is a major part of the price action in the forward market and futures exchanges.

    my yout, I understand what a futures contract is

    spoilage isn't really an issue..................the prices are based on fluctuation in prices in the future (hence future being as an adjective to describe the contract)

    people who deal in agricultural products, or use certain commodities as direct materials for their inventories use futures contracts to hedge against price fluctuations in the future, hence my argument about possible present bias


    since futures contracts are standardized, there isn't really a concern about spoilage, because the market ensures that you will get the commodities you pay for

    quaity is not an issue because they are commodities.................remember commodities are fungible

    just like a barrel of oil is the same no matter where it comes from, so is a bushel of corn




    the only issue you face is whether the price of the underlying commodity will go up or down by the time the futures contract expires..................and depending on whether you are long or short, you will have taken a loss or realized a gain
  • lordhonka2lordhonka2 Posts: 1,177
    edited August 2011
    I now the thread starter asked about investing. but why didnt anyone suggest getting in to options trading as a way getting started and getting used to the market. Options are risky but what about the market isnt especially now. I started when a friend put me on to it. I watch learned how to use candle sticks and read up on companies. to make sure i made good choices its short term but you can make some good money. I too would suggest you buy options investing for dummies and there is another book but i cant think of the name it just like options investing for dummies. Its like buy a scratch off and betting that it will hit or betting that it will lose and either way you can get paid
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