Ben Naftzger, Online marketing, software & ecommerce guy
Mise à jour il y a 178w
You are a pretty young 22, so before you do anything I recommend you read this book first... Retire Early Sleep Well: A Practical Guide to Modern Portfolio Theory, Asset Allocation and Retirement Planning in Plain English, Second Editio: Steven R. Davis
Seriously. Go. Read. It.
Berkshire Hathaway may or may not be one of the companies you have been paying close attention to, but I am sure it is one you respect. So I draw your attention to Warren Buffet's 2013 Letter To Shareholders: "The goal of the nonprofessional should not be to pick winners but should rather be to own a cross section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal."
~80-90% of professional teams (teams of people) who actively manage investments (i.e. managed mutual funds) can't beat S&P 500 returns over the long term, so I would suggest you instead follow a very simple, but proven path to success by building a portfolio of carefully selected index funds.
Page 86 of the book I recommended above demonstrates how a simple portfolio of carefully selected index funds can provide a 150X return in 32 years, turning $100,000 into $15,000,000 - therefore Index Fund returns don't have to be boring or any less sexy than searching for "hot stocks".
If you still want to geek out further after you read that book, you can easily join in the community over at Bogleheads Investing Conseils et informations to debate the best portfolio of index funds to hold.
As per Eric Jang's listed 'Con' in this thread and to reiterate an answer to your final question: yes, there is a large pool of data that statistically shows that you would in fact be a "fool" of sorts to try your hand at active investing - no disrespect intended of course, as you are obviously smart enough to be asking for advice
I wish someone had given me advice like this before I started making my first trades, which is why I took the time to chime in here.
Leah Xu, Software Engineer at Spotify (2017-present)
Mise à jour il y a 133w
I'm in a similar position to you in both age and occupation, so I'm going to recommend what I've been doing.
You're 22, which means time is on your side when it comes to investing. If you're looking to invest long-term, you should put your money in a broad market index fund. Compound interest is amazing, and in the long term you'll beat most actively managed mutual funds. Vanguard is a great company with very low expense ratios since their mutual funds track broad markets. They also have funds that target your retirement date that you can invest in. When it comes to investing, that's the strategy that I've approached. I have both a retirement account and a personal investment account. I don't plan on taking the money out of the retirement account until I retire and I'm going to be very thoughtful about withdrawing my money from my investment account, only taking what I absolutely need -- hopefully in pursuit of another investment opportunity and not out of necessity.
Now for the fun part! First (and most importantly), I don't expect to make money off of trading. In fact, I'm prepared to lose a significant portion of the money I'm trading. If professional traders cannot consistently beat the market, don't think you'll be able to so easily. There's a good bit of luck involved, even with ample amounts of research.
Now that I've gotten that out of the way, I wholehearted recommend Robinhood if you're looking to get your feet wet in trading. I put in just $500 as an initial fund and I'm allowing myself to buy whatever I want to based on which companies I believe are undervalued. I'm planning on adding $50 a month. You'd be surprised how the markets can affect your emotions even though you're gaining and losing the equivalent of a cup of coffee or a cheap meal. I'm using Robinhood to teach myself the emotion roller coaster that is trading, in the hopes that I won't be reckless in the future. Given this perspective, not having to pay for each trade is wonderful because I'm buying a share or two at a time (seeing as I don't have a large fund to leverage). However, I will caution that you will not get the full experience of trading since you can't sell and trade easily because of the long hold. I'm willing to accept this inconvenience to allow myself to experience trading with relatively little risk.
Mise à jour 3 / 30: Over the past few months, I've lost 15% on my Robinhood picks and I've made 7% on my index funds. More importantly, as the market was going down, I trusted the the US economy would go back up, but I had no idea about the specific companies that I picked. I think that 15% is a very inexpensive (but emotionally profound) lesson on picking stocks.
Benyamin Shoham, works at Wibiya
Répondu il y a 157w
The investment realm you are talking about is called: Value investing.
It is the method of investing in good companies: Those with experienced and trusted management, first of all. You should check the management resume, ask for references, talk to them if possible. ask the hard questions.
Above that you will want to find companies with good business models that are undervalued.
It's not enough to find the good companies (which is hard enough) but you have to find companies that are also worth more than their market value.
In order to realize that you have to analyze their business and financial reports inside and out.
Value investing is by far the best method for investing your money, IMHO and by Warren Buffett and his flock of followers. If you know how to do this well, forget about diversity and stability, and go only after those great deals you find. That is a good way to beat the market. It requires most of your time and attention for the next, let's say, 10 years to become a pro value investor.
If you're not following that path, forget about beating the market, buy index funds, bonds, gold and cash in equal parts, and rebalance your account quarterly. This way you will probably get market growth with minimal risk and minimal effort.
Any path between those two is bound to get you grave losses and aversion to the capital markets. This is a shame not because you lost some money, but because the capital markets are your best sound option for a very long term investing and early retirement.
Link to early retirement and value investing ("The smart investor") already appeared in other answers, you make your pick.
Just my 2c, invested over 65 years and yielding a Porsche
Zack Miller, Animateur du principal podcast Fintech, Tearsheet.co
Répondu il y a 75w · L'auteur dispose de réponses 90 et de vues de réponses 107.9k
I think this question is a little misdirected.
Robinhood is a tool. So is E*Trade, Schwab, and Fidelity for that matter. They’re large platforms you can buy a wide variety of financial products on and implement various investment strategies.
As a tool, Robinhood itself is predicated on a great user experience et frais peu élevés. The value of a great user experience is up to the individual but it’s accepted practice that as part of a good investment strategy, lowering fees is important (if only because higher cost platforms and fund managers haven’t been proven as a whole to outperform cheaper ones).
And as far as tools go, Robinhood is legit. It’s under the regulatory regime (in the U.S.) of FINRA and carries SIPC insurance, which as a customer, should protect your securities and cash if Robinhood as a company tanks (it doesn’t protect your investment losses).
But the real question isn’t qu'il s'agisse you should start using Robinhood — it’s a tool like any other brokerage platform. The real question is what to do with your money once you sign up. What investment strategy should you use?
Tools + Investment strategy = Portfolio management
*By the way, if Robinhood is a tool, robo-advisers like Betterment and Wealthfront are more than just tools. They’re automated portfolio managers and as easy as they make it to invest and rebalance your investment portfolio over time, they have their own investment strategies built into their platforms. So when you use one of these services, you should understand that you’re essentially consuming their investment advice.
Répondu il y a 197w
TL;DR Robinhood is great for beginners, since most beginners only buy and sell.
I have very little experience trading. I am currently a Computer Science major and my first "investment" was actually a 401(k) from a well-paying tech internship. My second was stocks, through Robinhood.
Robinhood lowers the costs of learning to trade stocks since you aren't paying commission. If you're a more experienced investor, you probably pick a smaller number of stocks, know what your target selling prices are for each, how long you expect it would take to get there, and just generally know what you're doing. I didn't know anything when I started, so I used a "shotgun" approach of buying 1-3 shares of many many companies, and sold early and often. This is only really possible with Robinhood (provided you have some extra cash in your account, since funds take a while to clear - I cover this in the gripes section). The only stock I am still holding on to, which was also the first stock I ever purchased, is Berkshire Hathaway's BRK.B.
Similar to the above point, with Robinhood you can also have a reasonably diverse portfolio on a sub $600 investment (which was what I started with). Elsewhere, if I wanted a portfolio of 10-15 different companies, I'd pay $100-$150 simply to buy + sell those (assuming $5 per trade), and it's very hard to breakeven a $150 cost on a $600 investment (unless you're willing to wait months).
Additionally - as an example - sometimes I might own 14 shares of Company X, but I want to sell 7 now and hold on the the other 7. With another broker, I would pay the commission 3 times - once to buy the 14 shares, once to sell 7, and again to sell the other 7. With Robinhood, all of this is eliminated. The only cost is the buying price of the stock, and the revenue is the price you sell the stock. Your profit (or loss) is the difference. So, it makes investing easier to understand.
You can also generally sell stocks earlier, since you simply look for an x% gain, not an "x% gain after commission". You also feel less guilty if you pick a stock that performs badly - it's easy to sell as soon as you realize you made a bad pick.
As a beginner investor, chances are all you're doing is buying and selling. You probably also do this 'more often' than regular investors since you're learning and will probably need to sell stocks that were bad picks quickly. Do it for free with Robinhood, don't pay a commission for this when you have a choice not to. If you want to "graduate" to using options or some derivative security, maybe TradeKing or another low-commission online broker is a better choice for you.
Note: I'm still new to this so I don't do margin trading. I have no idea how that feature compares with other brokerages.
My biggest current (early Jan 2015) gripe with Robinhood is the 3 days it takes to "clear funds". It was okay initially but these days I'd actually like to be able to pay a commission simply to have the funds clear in an hour.
My second-biggest gripe with Robinhood is the in-app charts - I really want more detailed charts and a weekly chart. But charts are easily found elsewhere so it's not a deal breaker.
Oscar Deng, amateur trader, undergrad mech. eng. student, cash trades
Répondu il y a 142w · L'auteur dispose de réponses 54 et de vues de réponses 96.6k
If you are asking whether or not it is that simple. Then you are not ready. Everyone below has given tons of resources so start there.
The simple answer is: No, it is not that simple.
However, I believe Robinhood is a great place to practice with a few thousand dollars or less. No minimum needed in the account and no trade fees (although they make money by taking a cut of any profits you make in the form of a penny or two per share over the price you actually buy it for.).
Once you learn more about stocks, you'll begin to realize that Robinhood is a cash only platform, which limits you from options, short selling, margin trading, and day trading, which is about 99% of what professional trading is made up of.
I myself am a 3rd year Mechanical Engineering major and have been investing internship-earned money into Robinhood to learn more about the ins and outs of the market (Fundamental and Technical analysis) as well as the nuances of each kind of market (Tech, Biotech, Software, Food, Raw Materials, etc, etc). This way, I can prepare myself for full on investing on a more robust platform once I have a full-time salary.