What do you have invested?

Mise said:

So you've made 7.5% in a market that's gone up by 8.75%, net of fees, and that's a success for you?

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More like 8.2% if we assume the 10K initial sum... but it's probably even more than 8.2% given I started with only 4-5 K. I've worked my way up to about 18-19K these days.

Also, please stop blaming things on your Dad... It's not good form at all.

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Given his flaws when it comes to investment strategies, it's hard not to.

Those flaws are that he finds it nearly impossible to sell and that he succumbs to "it will keep going up" syndrome regularly. He's improving though, as he increasingly lets me do most of the thinking so long as I double check with him; this is probably because any stock he picks tanks and we have to hold onto it for long periods whereas ones I pick are gone within a week or two.

JerichoHill said:

Of course, when the downturn hits, its very easy to see who knows their stuff.

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Indeed. It's why I anticipate one to see the merits of this strategy.

Of course, people who short-sell in addition to buying low will have the most advantages. It's why I've talked about a margin account with my Dad, though I'm skeptical of the costs of one. As the disclaimer says, it amplifies gains but amplifies losses just as easily.

El_Machinae said:

I'm on your side, since this is a learning experience. However, this statement triggers warning bells. It should be at least a few years before your father actually trusts you with decent money. Don't fall into a gambler's fallacy (any of them): you're still at the stage where you're effectively gambling.

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My father is very knowledgeable in business/technical practices. Beyond that, he can be a bit... less competent? His insistence of "it will keep going up" for instance, often kills him as a trader, unless he bought when the stock was horribly down. And even then, I've had to be the one to convince him to dump stocks he's made 50% profits on in less than two years.

Taniciusfox said:

this is probably because any stock he picks tanks and we have to hold onto it for long periods whereas ones I pick are gone within a week or two.

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This also doesn't make sense, once a stock has tanked, there's no reason to hold onto it unless you believe you'll get better returns than with any other stock.

Zelig said:

This also doesn't make sense, once a stock has tanked, there's no reason to hold onto it unless you believe you'll get better returns than with any other stock.

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That's his fault and not mine; he doesn't ever want to take losses, so if it goes down, I have to hold onto it until I can sell it at a profit. He won't even tolerate break even.

I like his spirit, but knowing when to take a loss is generally part of good investing.

And the update is?

Zelig said:

This also doesn't make sense, once a stock has tanked, there's no reason to hold onto it unless you believe you'll get better returns than with any other stock.

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When I started investing early on, one of my stocks, that had been doing quite well, tanked hard and stayed at the bottom since. It was never worth very much overall, but I like to keep it around so that big red number on my portfolio reminds me to not be too cocky.

JerichoHill said:

And the update is?

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I appreciate your continued interest in my progress, but my net gains in the short-term can be easily seen in my sig. So far, 1,661 dollars on the 10-20 K I bounce between.

Currently the portfolio is 35 K; father had to take out 10 K for my brother's upcoming wedding. Things continue to look good. I've played with the idea of maybe buying in smaller amounts, however, to increase diversity.

What have I invested?

Stocks:
I am invested in a broad based index fund, no buying or selling. October1 to Jan1 my returns are 11.1%. I'm almost back to $60k in the main account.

My emergency fund was spent on my layoff in '09, so it served its purpose, but I need to build it back up again. That's where my new money is going right now.

Semimonthly I invest $250 in a Total Stock Market and $250 in an Intermediate Corporate Bond index fund at Vanguard. When excess money piles up in my checking account I put it in a Total Bond or Total Stock Market(US) or Total Stock Market(World) ETF depending on what I feel like. I pay no commissions on Vanguard ETFs which is nice. In all cases I leave it alone and reinvest dividends.

I plan on eventually investing in individual stocks and bonds rather than index funds but I am now knowledgeable enough to feel comfortable about that yet. I've recently read both The Intelligent Investor and Security Analysis. The former, in my opinion, should be a required reading in high school. It's a shame that school's reading lists are designed to create English Majors rather than give students useful life knowledge.

Necro yes, but it is relevant.

Reflections

My father pretty much had to take out all the money from the account so as to pay off the IRS for past troubles.

As such, I am left with only 2K to play around with, and for the time being, my short-term trading adventures must end.

This past year, we have had net gains of about 11,500 K, and losses of 3K (many of them were from his own stock choices, and were realised solely because of the fact we had to liquidate stocks so as to get the funds to pay the IRS), for a total of 8,500 K. On an account of 40K, that's 20%+! Not bad at all. 2K of that was earned through the short-term investments, so, in a way, I'm basically left with what I had earned for him.

Overall, it was a success, though not as spectacular as anticipated.

Some thoughts:

-Penny stocks are the closest thing to a casino; they're easy to get into, hard to get out of, and they will either make you rich or make you poor. I received approval to use 1K in a penny stock, and while it paid out, a future loss took it all back and a little bit more. With higher-end stocks, your chance of loss are greatly minimised and you can make educated guesses, but the penny stocks are 100% luck. I'd have more luck playing Blackjack!

-While I was immune to fear, I was not immune to greed. I sometimes didn't stick to my set profit margin and instead chased the stock up. This usually still gave us a bit more cash, but other times set us back several months. Should we get some more money from his patents, I will have to consider this and change strategies accordingly.

-While my father made me hate the word "like," given how he "liked" every stock he owned, I was a bit susceptible to this myself. We narrowly got out of the Bank of Ireland before it tanked. Note to self: avoid attachment.

On my own, private investments:

-In line with point 3 above, I took a hit on IRE. IRE devoured all my gains with its losses.

Fortunately, my father said he'd insure any loss I took... so logically, I decided to get adventurous. Since it's a state bank, I think I'll hold onto it for a while. Especially considering he won't have any cash for some time, so it can't hurt. Maybe Europe will introduce a new bailout. You never know what the future holds.

-SGAMY has paid out time and time again for me, but as much as I am an avid supporter of theirs, I shouldn't get too attached. I have made like 100-200 bucks off of them, however!

-I simply do not have the swaths of capital to reliably short-term trade myself without going into super-risky penny stocks (I did make a 20% net gain in 2 weeks before, but I know I shouldn't be seduced by it). I shall stick to my original plan, where I invested in 200-300 dollar blocks in high-yield stocks.

I made 107.33 this year, with 183.80 last year. 32.08 in dividends on top of that! I pay no taxes on it (since I file under my parents), so not too shabby! IRE has claimed 672.00, however, but fortunately, that was insured! As such, the loss is only on paper.

1488.00 was what was deposited, so the total gain is 19.5%. Not bad!

I will be sticking to long-term investments for a while, that's for sure.

Whenever father gets the money, I will adding another 304.82 to the account, as well as 262.22 on top of that. No idea what I'll put it into. Perhaps a CEF? CEFs offer large interest rates with the downside you can't tap into the money normally unless the fund self-liquidates. But earning an extra 10% a year with no maintenance is very promising... especially when I have 40-50 years ahead of me.

Me and 10 mates have bought a very big patch of land in Medawi , Bali . We are going to build an alternative style resort with a surf school , yoga classes , natropathy etc ( surfing is my only real sphere of interest ) . There will be 11 villas so at any time if a member wishes to live or holiday in a villa , he simply forgoes his share of the income for that period while paying the upkeep . If you want to sell , then any of the the other ten members get the first opportunity to buy it at a rate of a 10% premium since the inception .

A couple of the members live there and will oversee the building and take a salary . If it all goes belly up we still have the dirt .

With my limited means , it is my only chance to own a little piece of paradise . All I could buy in Sydney is a crappy unit . Frankly , that just wouldn't stir my passion .

Rugbyleaguefan said:

Me and 10 mates have bought a very big patch of land in Medawi , Bali . We are going to build an alternative style resort with a surf school , yoga classes , natropathy etc ( surfing is my only real sphere of interest ) . There will be 11 villas so at any time if a member wishes to live or holiday in a villa , he simply forgoes his share of the income for that period while paying the upkeep . If you want to sell , then any of the the other ten members get the first opportunity to buy it at a rate of a 10% premium since the inception .

A couple of the members live there and will oversee the building and take a salary . If it all goes belly up we still have the dirt .

With my limited means , it is my only chance to own a little piece of paradise . All I could buy in Sydney is a crappy unit . Frankly , that just wouldn't stir my passion .

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I'm sure things are a bit cheaper in Bali, but even so, that sounds rather expensive!

I wish you luck and hope it turns out good.

Taniciusfox said:

I'm sure things are a bit cheaper in Bali, but even so, that sounds rather expensive!

I wish you luck and hope it turns out good.

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Thanks ! It's pretty nerve-racking but I have 2 things in my favor , the strong Australian dollar and the fact I don't care massively about money . But I certainly fear regret .

Time, education, and a Honda Civic.

Eh, at a guess that should cost like $300-400k all up. Depends on location and what constitutes a villa but for arguments sake have bought a near-new 30 unit complex, with a nifty infinity pool, spa and massage rooms close to town for 350k and that was considered expensive. Then again, returns on them are not spectacular in the order of 6-8% new (58k - 43.75k/pa) which ain't all that great when one factors in tax, rapid depreciation of the asset (most resorts are rebuild every decade and a half or so), security of title and the lures of ex-pat life. From a revenue, long-term, retirement strategy I still favour serving the middle-class domestic market, which is constant/steady being tied to the government or big companies, and is far easier to manage than the other options (dealing with tourists is a bane on ma existence). I also tend to support the Philippines for this general strategy in preferance to Indonesia (mostly because of the better land tenure laws).

Then again, I'm atypical since the darling is a citizen of the Unitary Republic. I also hold more than just Australian citizenship and am looking to expand that in politcally safer directions.

Taniciusfox said:

Necro yes, but it is relevant.

Spoiler :

Reflections

My father pretty much had to take out all the money from the account so as to pay off the IRS for past troubles.

As such, I am left with only 2K to play around with, and for the time being, my short-term trading adventures must end.

This past year, we have had net gains of about 11,500 K, and losses of 3K (many of them were from his own stock choices, and were realised solely because of the fact we had to liquidate stocks so as to get the funds to pay the IRS), for a total of 8,500 K. On an account of 40K, that's 20%+! Not bad at all. 2K of that was earned through the short-term investments, so, in a way, I'm basically left with what I had earned for him.

Overall, it was a success, though not as spectacular as anticipated.

Some thoughts:

-Penny stocks are the closest thing to a casino; they're easy to get into, hard to get out of, and they will either make you rich or make you poor. I received approval to use 1K in a penny stock, and while it paid out, a future loss took it all back and a little bit more. With higher-end stocks, your chance of loss are greatly minimised and you can make educated guesses, but the penny stocks are 100% luck. I'd have more luck playing Blackjack!

-While I was immune to fear, I was not immune to greed. I sometimes didn't stick to my set profit margin and instead chased the stock up. This usually still gave us a bit more cash, but other times set us back several months. Should we get some more money from his patents, I will have to consider this and change strategies accordingly.

-While my father made me hate the word "like," given how he "liked" every stock he owned, I was a bit susceptible to this myself. We narrowly got out of the Bank of Ireland before it tanked. Note to self: avoid attachment.

On my own, private investments:

-In line with point 3 above, I took a hit on IRE. IRE devoured all my gains with its losses.

Fortunately, my father said he'd insure any loss I took... so logically, I decided to get adventurous. Since it's a state bank, I think I'll hold onto it for a while. Especially considering he won't have any cash for some time, so it can't hurt. Maybe Europe will introduce a new bailout. You never know what the future holds.

-SGAMY has paid out time and time again for me, but as much as I am an avid supporter of theirs, I shouldn't get too attached. I have made like 100-200 bucks off of them, however!

-I simply do not have the swaths of capital to reliably short-term trade myself without going into super-risky penny stocks (I did make a 20% net gain in 2 weeks before, but I know I shouldn't be seduced by it). I shall stick to my original plan, where I invested in 200-300 dollar blocks in high-yield stocks.

I made 107.33 this year, with 183.80 last year. 32.08 in dividends on top of that! I pay no taxes on it (since I file under my parents), so not too shabby! IRE has claimed 672.00, however, but fortunately, that was insured! As such, the loss is only on paper.

1488.00 was what was deposited, so the total gain is 19.5%. Not bad!

I will be sticking to long-term investments for a while, that's for sure.

Whenever father gets the money, I will adding another 304.82 to the account, as well as 262.22 on top of that. No idea what I'll put it into. Perhaps a CEF? CEFs offer large interest rates with the downside you can't tap into the money normally unless the fund self-liquidates. But earning an extra 10% a year with no maintenance is very promising... especially when I have 40-50 years ahead of me

.

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This is written in a very unclear way. You say you made gains only to say the same stock went down and you lost all those gains. Those aren't gains, those are losses. Your time frames aren't clear either. Are you up 19.5% after a year of trading, or is your smaller $2000 account up 19.5% after you just recently started? There's been an obscenely bull market lately (we'll see what happens monday) and it's very easy to be up a lot especially if you bought some good volatile stocks--some of the ones I was closely following have risen between 35%-80% in the past 4 weeks, including yesterday's big hit.

Hygro said:

You say you made gains only to say the same stock went down and you lost all those gains. Those aren't gains, those are losses. Your time frames aren't clear either.

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As in my smaller, personal account?

What happened was I had many gains from a variety of stocks. IRE tanked, the unrealised loss erased all my gains and then some.

BUT, since that loss is insured, it's only a virtual loss (for me).

Are you up 19.5% after a year of trading, or is your smaller $2000 account up 19.5% after you just recently started?

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After a year.

Wait, so, if you ignore the fact that your daddy bailed you out, how much money would you have been left with? You started with $40,000 --- what were you left with at the end, before your dad bailed you out?

Mise said:

Wait, so, if you ignore the fact that your daddy bailed you out, how much money would you have been left with? You started with $40,000 --- what were you left with at the end, before your dad bailed you out?

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You're mixing my money and his money.

His account started with 40K, and we made a net of 8.5 K or so. The details are in the post.

My account ran a profit but I made a bad choice with IRE. I simply do not have the amount of capital necessary to short-term trade myself, so will stick to long-term investments on my own account. If I had realised the loss, I'd be at 1.1 K.

I see, I misunderstood your post. Thanks.

What made you think that an Irish bank was a good investment?

It was volatile and was showing stable ups and downs. I got greedy. What more can I say?