Your Investing Strategy

I'm a non-professional investor, I think for us, ETF funds and mutual funds are a good way to diversify and I think funds should be most of any portfolio. I don't worry about fees when it comes to index funds, they are cheap to run because there is really no management involved in picking the stocks.

Individual stock picking is more risky (but more fun- actually requires strategy and research), but this is where my 'spare' investing cash goes, such as junk bonds, or companies that I think have some value to grow. This is primarily something to do for fun, in other words, like a form of gambling.


I'm not the kind of person to quit my job and become a day trader, while it is possible to make money, you really have to spend a lot of time with it, and here the game is especially rigged in favor of high frequency traders.

I like to acquire cheese-burgers and pizza. I find these give me an annualized growth rate of 10-15%.

Or to ask another question- who doesn't invest, and why (other than can't afford to, living pay check to paycheck), which essentially means hiding in cash.

Can't afford it. Have around £300 after fixed bills are paid per month. Some of this is usually left, but not much, and there are more "nice to haves" than I could possibly hope to save for.

I try to keep a 6 month cash buffer, but beyond that hand to mouth, and modest doing without.
Replace things as they wear out, maintain things that need maintenance ~ buy quality, but cost effective products.

I'm not a monk, so I do indulge luxuries from time to time, but this is on the scale of a meal out once or twice per year (not spend-y either), second user DVD from charity shops/school fetes etc and an internet connection at home.

I have a small amount of equity in property, but there is no plan to extract that equity in the next decade, and the amount is uncertain, and dependent on the market at that time.

I daytraded for 3 years from '97 to 2000. I worked an afternoon shift so I was doing this trading stuff everyday of the week. It was worse than gambling as far as being addicted. I was with a group of guys on an IRC chat channel who still trade today. Some of the guys worked for firms others were trading at home. One guy committed suicide by jumping from his office building after losing a crapload, and another guy was arrested in Tokyo for illegal trading.

I get the addiction- as a teenager and young adult, I really couldn't care about any of it. Later in life it could develop into an obsession, has less to do even with the gains as it is the obsession trying to pick winners.

This one is a value ETF: http://www.google.com/finance?q=ive
It has companies with lowest P/E ratios in the S&P 500. They are the companies that are considered to be "on sale" right now. In other words, low price, relatively high earnings.

A good rule of thumb is that a good cheap stock is better than just an expensive one, of course that depends on an assessment of value- you're not just buying stock, you're buying a share in a market or business that is predicted to grow or hold steady (Coca Cola is universally enjoyed, although the stock is cheap- I own that stock because of the value of what they produce rather than just what the stock price is).

Yup... £300 ish after *fixed* bills. So before food/clothes/transport/(optional) private health care/stuff for daughter... So no real interest in Coca Cola stock... quite apart from not approving of their sugary #%&*$# in a bottle.

My limited spare cash is sent to and is held in an ISA, which barely offers any return, but is at least tax free, and available for it's purpose of a guaranteed availability buffer against mis-planning or unfortunate circumstances. There isn't a significant margin left for anything else - even a 100% return on a few 10s of pounds isn't worth the candle, nor the risk.

With a windfall lump sum (say an inheritance) I'd have some other ideas on how to use it, but my current stance is rebuilding a buffer of cash after a disastrous short term relationship (net loss in the thousands ~ although I stand a good chance of recovering some of this), and then completing minor projects that have been on an enforced hold for 6 months or more ~ including rebuilding my bike with new front wheel due to unavailability of suitable components to replace those worn out/not suitable for their intended purpose.

Never been much of an investor, but I'd accumulated enough cash under the mattress to put down a decent deposit and buy a flat in London about six months ago. It's probably worth about 20% more than the offer I had accepted for it this time last year. I'm certainly not planning on selling up any time soon, but despite the uncertainties Lieste mentioned I'm kinda hoping I'll have the mortgage paid off in less than 20 years and then be able to sell up and buy half of Yorkshire.

My investing began from the fact that money in the bank doesn't beat inflation, no bank pays me enough for holding my money so that I at least come out even. It's as if I'm slowly spending my money without getting anything for it.

In other words, by doing nothing but holding onto my cash, I'm losing money, regardless. While there are risks to any sort of investing, I figured I would just give it a try if I'm going to lose anyway.

Very soon, it became a game to play in and of itself, it all sounds dry when watching the news, but when I'm actually invested in the outcome, the challenge of it was more thrilling than any strategy game that I enjoy playing.

I can afford it, I just choose not to. I find that when I do invest, I end up obsessing over it and obsessively checking numbers hourly and stressing over losses. Plus I think the entire system is rigged and it's a losing game in the long term.

Two reasons to get a professional from a reputable firm if you wanted to invest in individual stocks and do it the right way:

1. you don't have to babysit your stocks
2. the pros who do it for a living likely have more knowledge and more tools at their disposal than you

I prefer ETF's and mutual funds - the majority of our funds are invested in those. I use Fidelity, T.Rowe Price and Vanguard.

some of my favorite funds:
Fidelity Biotechnology
MOO (Agribusiness ETF)
TAN (Solar Energy ETF)
Fidelity Low Priced Stock
Fidelity Medical Delivery
Fidelity Natural Gas
T.Rowe Price Capital Appreciation
T.Rowe Price Media and Telecommunications

I have more funds then those and about 14 individual stocks just for fun but the individual stocks do require some watching and within the next several years i probably will have sold most of those (for loss or gain).

there are plenty of good funds in those 3 families but whatever mix of funds you choose i suggest you invest across different sectors of the economy and funds with different objectives.

Low cost index funds. Rarely pay more than 1% management fees on my mutual funds. If you have a Roth 401K option I would jump on that as employers are still going to contribute usually 50% up to 6% of your contributions. Its a 50% return on investment right there. If you don't have a 401K option then I would opt for Roth IRAs as I see the government squeezing more and more out of the younger generation...what little they'll ever have... and raising taxes or at least estate taxes.

The Boglehead forum is a decent place to ask questions and read current opinions on the state of investing. I view investing macro economically. Basically the old are going to need healthcare i.e. Healthcare funds and the young are not getting decent jobs. I just don't see how inflation can rise given the younger generations inability to get decent paying jobs right now or afford buying the houses the elderly are going to try and sell once they need to go to assisted living or die.

I don't know if I'm typical or atypical.

For the longest time I felt I just couldn't afford to invest, or I was too lazy to just sit down and get started. At some point, maybe 5 years ago, I started an IRA with USAA. I did it as an automatic deduction from my paycheck. A little after that I started a mutual fund and two Cordell(?) college funds for my children. Again, just an automatic deduction.

The mutual fund is interesting. I started buying into it when the Dow was at 8000. After a couple of years I saw that I could probably afford to put more in every month and so I did. And after about 4 years I started seeing a return and then upped my investment some more. As I put the money in as an auto-deduction from my paycheck I found I just spent less money.

This year I have realized about a 30% return on that mutual fund, or about $26000. That is for doing nothing other than putting the money into a mutual fund instead of the bank, or checking account, or whatever. Now that I'm seeing that it is growing, I'm more motivated than ever to stuff even more money into it.

My investing is both short and long-term. I'm hoping to buy a house in about 4 years and my mutual fund represents my savings towards that. My IRAs are my long-term goals. I just max them out and I don't even look at what the stock market does. I just dollar cost average everything and hope for the best.

I do review my investments every month. I may move some money to different funds that are paying better. For example, I put my son's fund in one mutual fund, and my daughter's in another, and my daughter's is out performing my son by about 15% so far...so I may switch his. Stuff like that. But that's about the extent that I really get involved with investing. I just auto-deduct money into some mutual funds, diversified between different funds, and look at the long game.

I don't know enough to invest for the short term. So for me, going with mutual funds has been pretty good so far.

mutual funds are a good option but you need to see what kind of investments your broker/bank is making. if you disagree with the kinds of things he's putting money into you should consider changing the fund.

i like high risk, high return investments and FX.

i trade leveraged fx between 20 and 50x leverage. the risks are high but i tend to trade around major news events, and i never make a trade so big that i can't hold onto a trade that's not going well. there's always plenty of balance remaining in the account.

eventually in FX the currencies always rebalance so a bad trade just needs to be held for a while and it'll recover. either that or set reasonable stop losses and factor in making a loss as part of your trading plan.

never make a trade or investment that you can't afford. you should never trade more than 10-20% of your trading account balance on a single trade unless you like russian roulette.

Yeah, there's a school of thought that says you let it ride and forget about it for a while. If you're always looking at the market, you might be tempted to pull your money during every correction, and by definition, you are losing money when you do that. You'll never get anywhere if you pull out on every downturn.

If you look at it this way, over the long run, the market has gained value, not lost value, in other words, the DOW Jones isn't at -160000 today. If you were alive during the Great Depression, you might have lost everything- but if you rode through it and stayed in, you might be a very rich man today, were it possible to live that long.

I'm a buy and hold guy. The only ones of these (I copied the holdings I info to a new listing and thus removed the values/shares held info for purposes of this post) I don't own are QCCO and FB. I just have these on here because my buddy at work owns them and is always looking for a quick buck rather than buy/hold and has for ten years now refused to buy, for example, CELG, which I find hysterical.

I recently noticed that I rarely purchase the same stock after taking profits from it. Which means my portfolio always consists of totally different shares at some point. Okay, not a strategy but a perk...

One thing though, I don't feel excited about the stock market anymore. It's just like some monotonous chore. Market goes up, market goes down I go... "meh".

tax-free municipal bonds funds offer a steady, reliable tax-free return paid monthly... good place to store cash you might need and still make a return...

http://www.google.com/finance?q=vicex&ei=bApQU9iXNIKciAKrqQE

A Vice Fund.

It's a fund of entertainment, gambling, tobacco, alcohol, and defense companies. It has an expense ratio of 1.5% though, but the initial buy in of $2000 isn't bad.

I have been using the "buy high, sell low, make it up by doing volume" method.

Phillip Morris may be a good buy in that case- assuming you don't have an issue against the product, the stock is down, but is made up by a good dividend.

The same is also true for Diageo, the guys that own the world's big alcohol brands. Alcohol is never going to go out of style, especially in economic downturns.