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Ask HN: Investments

by aakriti1215 on 5/8/17, 8:25 PM with 19 comments

What do you use to invest your savings? How do you decide what stocks to buy/keep?

  • by arca_vorago on 5/8/17, 9:27 PM

    Just head over to /r/wallstreetbets to see all the things to not do. Or... leverage x3, yolo, and join in the yacht club. Up to you.

    Want safe returns? They're smaller but have less risk. Index funds, CD's, t-bonds. Want lots of money? You take a gamble.

    Unless you are applying machine learning etc into higher freq trading, I'd avoid stock picks in general. The market thrives off little guys shoveling cash into the mouths of big movers who have faster connections and data sources (bloomberg terminals), know more, and move faster on info. Algorithmic trading accounted for over 85% of market volume in 2012!

    If you are really interested though, I think the key differentiator for those who still pursue more risky options is hedging techniques.

    I'm just a sysadmin learning data science and wanting to apply it to the market, only paper trading so far, so take what I say with a grain of salt.

  • by tedmiston on 5/9/17, 12:45 AM

    I'm a big fan of index funds or robo advisors (on top of index funds) for the bulk of one's investments. A little individual stocks on the side and a high-interest checking / savings account are a decent way to round it out.

    If you're looking at investing five figures or more and unsure of allocation, it's worth doing a bit of research or sitting down with a financial professional.

    Also remember that everyone has their own risk tolerances. If people give you advice like "never buy individual stocks", that's just their way of saying that their risk tolerance is below average. It's worth feeling out how much you'd be comfortable losing in exchange for potentially greater rewards.

  • by fenici on 5/8/17, 8:39 PM

    My primary investment is in Australian residential property, secondary is broad index funds (Vanguard ETFs), third is cash. I don't trade stocks, it's too much like gambling IMO.

  • by akg_67 on 5/9/17, 12:12 AM

    I suggest you do some reading before getting started with investing.

    Bogleheads wiki and forum has good information and knowledgeable forum participants.

    https://www.bogleheads.org

    https://www.bogleheads.org/wiki/Main_Page

    In addition, following books will give you good fundamental understanding of why and what of investing.

    Your Money or Your Life, Vicki Robbins ...

    Millionaire Next Door, Thomas Stanley

    A Random Walk Down Wall Street, Burton Malkiel

    Personally, 95% of my investment portfolio is in Index Funds/ETF. The other 5% I use as play money that keeps me engaged in investing, finance, and trying out new strategies and investments.

  • by smt88 on 5/8/17, 8:27 PM

    Don't pick stocks. Put your money in index funds.

  • by amerkhalid on 5/8/17, 10:39 PM

    100% of my savings are in index ETF or funds.

    But I have a small yearly budget (less than 5%) for gambling with stocks. I enjoy picking stocks and reading financial news. I got lucky with a few picks but mostly it is a wash. This is a hobby for me, just requires a lot of discipline to not go above yearly budget.

    As for how I pick stocks; financial news, regular news, if I like the company & its CEO. I definitely read up on CEO's biographies. Finally, I would do financial analysis, mostly avoid companies with a lot of debt, or very high PEs.

  • by et-al on 5/8/17, 9:28 PM

    Here's a similar Ask HN from five days ago if you didn't see it:

    https://news.ycombinator.com/item?id=14256980

    (I recommend using the search box at the bottom in the future.)

  • by 1ba9115454 on 5/9/17, 12:53 PM

    Businesses I build my self. In a way when you buy a stock you are buying a fraction of a business at a premium rate.

    Why not invest in your own business, you get total ownership at a huge discount to the stock market.

  • by zerr on 5/10/17, 6:44 PM

    How to invest in index funds as a foreigner residing outside US?

  • by barelyusable on 5/9/17, 9:33 PM

    Vanguard automatic investment in S&P500 index fund. Make it every week to get 52 investments per year. Increase the amount of weekly investment each time your income goes up.

  • by miguelrochefort on 5/11/17, 12:21 PM

    100% of my savings are in ETFs (XAW.TO and XIC.TO).

    I'm looking at getting back into cryptocurrencies (Bitcoin and Ethereum).

  • by bsvalley on 5/8/17, 9:42 PM

    Buying stocks with your savings is not good at all :)