Investments - Kind of long post

ShadowsRevealedShadowsRevealed Posts: 83 Copper ✭✭
edited May 2016 in Community Cafe
Hey guys so in this thread I wanted to look at investments. I've been in the community for a short time and am impressed with the depth of knowledge we have here. So before we begin, I would like to point out that this is not advice and no one here is pressuring or influencing anyone to make any investments, it's merely a debate or presentation of ideas.

The other day I was watching the Keiser Report and Max was going over how in 1950 90% of stocks were owned by individuals and 10% were managed funds. By 2014 this trend had reversed with 90% of stocks held by managed funds and only 10% of the market owned as individual's owning individual stocks. Why do I see this as a problem? Well, I am required to put X% of my salary in a mandatory fund (There are about 25 options to choose from), which is matched by X+3.5% match by my employer (great deal). However I am required to put it into managed funds which have fees, and are subject to manipulation.

My question is, wouldn't it be better if people could manage their own retirement accounts? It seems we are allowing fund managers to scrape money off the top, in a system that employees can't escape.

Honestly, I would be happier being able to keep my X%, and then they just give me the X+3.5% and say "good luck", then be forced into this system of market manipulation.

Anyways, on to the core point of this. Every month I have a bit of extra money left some of which I put in BitGold, but I am not sure what to do with the rest. Would it be smarter to put it into newer younger stocks that could grow, or older more developed stocks that pay dividends?

Don't be worried to share your opinion here, everyone is entitled to their own thoughts and strategy. Being kinda of young it would be foolish of me not to consult the more seasoned members we have here - thanks guys!

Comments

  • rohanibuang61rohanibuang61 Posts: 2,379 Gold ✭✭✭✭✭
    Hi @ShadowsRevealed I think you are making very and assertive move towards saving the surplus you have with BitGold as an insurance and not investment.
    Unless if we are born under silver spoon with access money in hand, then it is wise to diversified our investment portfolios that carrying risks and return.
  • GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
    So if I understand you correctly @ShadowsRevealed , your company is more than matching your contribution. That is a good deal and it gives you a general diversified exposure to the market, even if there are fees tacked on. You make an interesting point about all these funds. Even the hedge funds find it hard to "beat the market" these days.

    Many of the markets are rigged, what with high speed trading and price manipulation ( Michael Lewis' new book - Flash Boys- is an instructive read) so the individual investor must seek his own path to a positive return on his risk taking.

    There's something to be said for going back to basics. Investing in situations that make sense to you and that you know. Taking the time to do your own homework and making a judgement about the people who run the company. Do you trust them? I recommend "The Intelligent Investor" by Graham as a good place to start.

    If you find a good company stick with it as long as the value proposition makes sense. There were lots of people who bought Apple at $50 , sold it at $75, and then watched it climb to $700.

    At your young age, learning is the first objective. If you lose some money, consider it your tuition and learn from it. Best of luck.
  • ShadowsRevealedShadowsRevealed Posts: 83 Copper ✭✭
    Yes @GrandpaBrian they more than match my mandatory contribution by 3.5%. I just didn't like being forced to use a predetermined company, especially with such limited offerings. I think I would be better off getting the money in Stash or Loyal3... I wonder if I can just roll the mandatory fund into another fund every month? Or should I stop being so rambunctious and just sit tight a while?

    I saved your book recommendation and will download it on Kindle tonight.

    Yes, personally I like the idea of individually investing in companies you believe in and have researched yourself. And if individuals own most of the stocks (say back to 90%) then there is only 10% they can high frequency trade, or place into funds (which I'm pretty sure they sometimes dumb bad stocks into, to mitigate risk and loss away from other ventures). Basically, if we all owned our own shares individually, they would have a much smaller market share to play with against our will.

    Yea, I've made a few investing mistakes so far, hopefully going to limit those as time goes on...
  • GoldmattersGoldmatters Posts: 4,069 Admin
    @ShadowsRevealed great questions. First I'm not sure where you live, but if you live in the US you CAN manage your own retirement in an IRA. Based on your income, a traditional IRA would allow you to take a tax deduction off your income (currently up to $5500 per year). You can then invest that money in a tax sheltered account any way you choose.

    There are way to rolll over your 401k into an IRA without penalty, usually if you leave your current job. ( this is a separate situation from the IRA I just talked about).

    I agree that some people would be better off managing their own retirement, however MOST people do NOT have the time to do the research and gain the understanding of the stock market to do this, as they have full time jobs.

    Great questions
  • GoldmattersGoldmatters Posts: 4,069 Admin
    @ShadowsRevealed Seperate from the IRA discussion, this interview has some interesting ideas from a seasoned money manager
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