Brain
Posts: 3792
Joined: 2/14/2007
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Obviously I'm not Warren Buffet and I don’t think anybody is as good as he appears to be, I’m not saying he’s Bernie Madoff , I’m just saying there’s something fishy about Buffet. The truth is unless you have inside information I think it's very difficult to predict the future. I’d really like to know how Buffet knew to invest in Goldman Sachs, but I digress.
Getting back to your question, from what I’ve learned over the years, the best thing to do when investing is to diversify. By diversifying you can minimize your risk. People should not have all their investments in health insurance companies because if healthcare reform really happens, and I’m talking about real reform which contains costs, that’s bad for health insurance companies. So the first thing to do, in my opinion, is to diversify.
Secondly, I think it’s true these companies, and I’m thinking of mutual funds people invest into, these funds charge significant fees. Usually the benefit you get from their expertise is offset by the cost or fees; so I’m not keen about mutual funds either.
My view is you can do as well as mutual funds but avoid the fees by buying index funds and diversifying your investments. The other thing that’s important is to avoid crashes. So based on research other people have done that I read, I think the best thing to do is buy stocks in November after a decline in value which usually begins by people selling stocks to realize tax losses before year-end. Actually I read is you can make 10 times more money if you buy in November and sell in April then you can if you hold the stock for the whole year.
What happens is people have lost money investing in particular companies and they would like to deduct those losses on the following years income taxes and that usually happens at the end of the year, and since people like to start early they start selling stocks in October; that’s my opinion anyway and I think I’m right.
So buy stocks in November when prices are lower and then the other thing you have to do is sell in April when prices are high. Usually not much happens over the summer with up-and-down fluctuations and then the other reason to sell in April is of course you avoid getting anywhere near the month of October.
This is a pretty long answer to a ‘simple’ question and I almost forgot one other thing; these stock market companies or brokerage firms that sell stocks. And I’m thinking of a company like Merrill Lynch, who say they are bullish on America remembering their advertising; these companies don’t recommend stocks to people necessarily because they think they are good investments.
What’s happening is that banks are telling the brokerage firms to sell stocks in companies that banks own. Brokerage firms then tell their salespeople to push these companies. So when they have an IPO, for example, and you hear about how one of these big investment banks underwrites the IPO then they get the stockbroker firm salespeople to recommend the IPO company not because it’s a good investment but because it’s good for the bank for people to buy it, since the bank invested a lot of money getting the company listed on the market.
I don’t understand the whole process very well because I’ve never worked for a stockbroker but I thought about changing careers. Maybe somebody on here is a stockbroker and they can explain how banks are telling stock brokerage firms to get stockbroker salespeople to recommend stocks in certain companies to the public better than I can.
For me, the bottom line is I don’t trust stock brokerage firms because their salespeople push stocks banks tell the stockbroker to sell. And I don’t trust guys like Bernie Made off
or that other guy from Texas who burned people for about $1 billion. There’s just too many crooks that have set up investment companies and people who don’t know anything about investing go to them and trust them with their money.
And the crooks disappear somewhere with other people’s money or it‘s a Ponzi scheme or some other bad news story; for me it‘s just too risky, I don‘t trust my mother these days and when it comes to money don‘t trust anybody. Fortunately, a lot of crooks are getting caught now and going to jail but people are not getting money back.
Feds arrest 26 in $61 million Medicare fraud
Doctors, nurses among those accused in Miami, Brooklyn and Detroit
Federal agents arrest 26 suspects in three states, including a doctor and nurses, in a major crackdown on Medicare fraud totaling $61 million in separate scams.
Get them All!!!
http://www.msnbc.msn.com/id/34437085/ns/us_news-crime_and_courts/
So the best thing to do, in my opinion, is to buy index funds and diversify your investments. Or, get a balanced mutual fund that invests in real estate and bonds and GICs/interest and stocks and also in stocks of other countries, whether it’s China or Japan or South America or Europe: and diversify, diversify, diversify.
quote:
ORIGINAL: servantforuse
Brain, I would be interested in knowing just where you invest your own 401 plan or other retirement savings ? It is evident that you hate corporations. Where do you invest ? Just curious..
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