Most of the trading on the exchanges is done by large corporations by computer, and happens extremely fast.
So fast that optical cables have to be adjusted in length to not favor any one trader or region.
Individuals simply cannot beat the market other than by pure chance, after which you regress to the mean.
So fast that optical cables have to be adjusted in length to not favor any one trader or region.
Individuals simply cannot beat the market other than by pure chance, after which you regress to the mean.
If the government hangs up on you when you call and ask for a bailout, that would mean you haven't really been doing it with other people's money.
Indeed, I do not have a lot of experience, but the managed funds I have tried before where not worth it, only 1 out of 4 was able to make any money and they where reputable funds.
That's my point. Why spend money lining the pockets of the fund manager? Just buy index funds and move on with your life ... assuming you have money to invest.
Tom
In my case the time spent acquiring two engineering degrees paid me back by allowing me to stay in the same company and location for 41 years. I advanced up the engineering ranks to a level where I was happy, where I remained for 15 years. I enjoyed my job. I stayed in the same house for 37 years, so using any extra funds to pay down the principal on my mortgage worked for me.
You stated that you work full time and that you live in a small town. Do you currently work in an electronics related job? Will you stay in that company or physical area long term after getting a college degree? Are there other opportunities for employment in Electronics in your area? Will there be in the years to come? Will you look for employment in the electronics field if you are not working there now? Will this require a move?
I ask these questions because the answers may influence what you call investment. Anything related to the stock market caries risk. As others have stated, the risk is not always obvious, and may vary with other yet unseen forces. I took a $5000 investment to about $200K during the stock market heyday from about 2000 to the crash of 2007 when most of it vanished due to the collapse of the real estate market, which was greatly accelerated by "sub prime" loans and derivative investments. People were encouraged to take the equity out of their houses and use it to buy more property, so when the property values halved in a few months' time, a large segment of the speculative real estate holders had negative net worth, and everything crashed, taking the stock and banking markets down with it. South Florida where I lived at the time was worse case with about 1/4 of the houses in our area foreclosed and vacant. A 2006 hurricane trashed many houses making matters worse. Similar scenarios are unfolding again in several parts of the USA.
In this case paying down my mortage was a good investment. Yes, my stock market holdings went from $200K to $20K in a few months, but during the good years I had taken money from the stock market profits and completely paid off my mortgage, added a swimming pool and paid off most other debt. If you believe that you will be in the same house for several years, and property values are likely to increase long term, then use some of that monthly check to pay down the principal of your mortgage is your loan allows it. Compound interest is beneficial when you are on the receiving end but works against you when you are paying it. Make a spreadsheet for your current house loan to see how much per year goes to actually paying off the principal. In the first few years of the loan, it is very little. In my case putting money toward the loan was the right choice, but I had an 8.5% loan. Your results will be different.
you live in a small town
I don't like Oslo and live well outside the city limits sort of in the country, there's some farms around and a lot of forests. It takes me between 35 and 45 minutes driving to work pending on traffic, current employer is just at the city limits.
Do you currently work in an electronics related job? Will you stay in that company or physical area long term after getting a college degree?
Sort of, In my current position I'm sort of a jack of all trades - master of none. And I'm more or less depending on having a wildly unpredictable work day, I get bored really fast so it's actually a motivation for me not knowing what willl happen or what I'll have to do to fix whatever it is. Electronics is part of it, but welding, mechanical stuff, programming, IT support, Project, Sales, +++ whatever else. This variety might be hard to find in another position or company.
Will you stay in that company or physical area long term after getting a college degree?
I have planted some fruit trees and berry bushes, so I hope to see some of that come to fruition 😀 but I am a pragmatist at heart so I really don't care about "what, when or why" I'll just deal with it whatever it is.
Are there other opportunities for employment in Electronics in your area? Will there be in the years to come? Will you look for employment in the electronics field if you are not working there now?
The answer to all of those are: Probably.
Will this require a move?
Not necessarily, there should be companies that have use for electronics people for years to come, in several different small cities, all of which are about 30-45 minutes drive from my house. Industry is fleeing from Oslo at the moment, several areas where land is being repurposed for industry much closer than my current day job, so odds are good. But if I have to move that's okay, I have no roots.
Edit:
I really wish this thread would be more about investments and less about all this other stuff though. Your advice is relevant and I accept the fact that risk is inevitable, but I would rather move on from that simple fact to the core of what this thread was supposed to be about: Investment.
What you say about the house market is very relevant, and it's part reason why I do not wish to invest in property unless it's to reduce energy or other utility bills where I live.
I don't like Oslo and live well outside the city limits sort of in the country, there's some farms around and a lot of forests. It takes me between 35 and 45 minutes driving to work pending on traffic, current employer is just at the city limits.
Do you currently work in an electronics related job? Will you stay in that company or physical area long term after getting a college degree?
Sort of, In my current position I'm sort of a jack of all trades - master of none. And I'm more or less depending on having a wildly unpredictable work day, I get bored really fast so it's actually a motivation for me not knowing what willl happen or what I'll have to do to fix whatever it is. Electronics is part of it, but welding, mechanical stuff, programming, IT support, Project, Sales, +++ whatever else. This variety might be hard to find in another position or company.
Will you stay in that company or physical area long term after getting a college degree?
I have planted some fruit trees and berry bushes, so I hope to see some of that come to fruition 😀 but I am a pragmatist at heart so I really don't care about "what, when or why" I'll just deal with it whatever it is.
Are there other opportunities for employment in Electronics in your area? Will there be in the years to come? Will you look for employment in the electronics field if you are not working there now?
The answer to all of those are: Probably.
Will this require a move?
Not necessarily, there should be companies that have use for electronics people for years to come, in several different small cities, all of which are about 30-45 minutes drive from my house. Industry is fleeing from Oslo at the moment, several areas where land is being repurposed for industry much closer than my current day job, so odds are good. But if I have to move that's okay, I have no roots.
Edit:
I really wish this thread would be more about investments and less about all this other stuff though. Your advice is relevant and I accept the fact that risk is inevitable, but I would rather move on from that simple fact to the core of what this thread was supposed to be about: Investment.
What you say about the house market is very relevant, and it's part reason why I do not wish to invest in property unless it's to reduce energy or other utility bills where I live.
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Carefully read tomchr’s advice above. Average people usually don’t have the expertise or the time to invest in individual stocks, and should invest in the stock market via an index fund, or a professionally managed mutual fund. Don’t make the common mistake of over-estimating your abilities in this area.
I have little-to-no abilities, not assuming I know anything at all.
That is the reason why I am considering signing up for a service that would simply give me informed opinions twice a month and be done with it. It's my choice whether or not to act on that advice, but then at least I would be able to have an informed opinion. I was asking if there are any alternatives to "The Motley Fool" that may be better suited for this purpose.
I carefully read all the posts here, which is why it becomes a bit tedious when you're all behaving like broken records, still there's a tiny bit of relevant information in most of the posts, and I do appreciate all of you taking the time to answer.
I will probably get some funds like Tom says, but that's just to assure a certain diversity in the investment profile, it will not be the first thing to invest in, maybe when the market flattens out a little bit more I will assume the bottom has been reached.
The Motley Fool doesn't know any more than you do about what stocks will go up. If they did,
they would just be investing for themselves, and not selling investment advice. Wouldn't you?
Same goes for anybody else. But this book should help you better than the school of hard knocks:
https://www.amazon.com/Random-Walk-Down-Wall-Street-dp-1324051132/dp/1324051132/ref=dp_ob_title_bk
they would just be investing for themselves, and not selling investment advice. Wouldn't you?
Same goes for anybody else. But this book should help you better than the school of hard knocks:
https://www.amazon.com/Random-Walk-Down-Wall-Street-dp-1324051132/dp/1324051132/ref=dp_ob_title_bk
But all of that plays into the risk tolerance, time horizon, etc. You're talking about investing money that you will borrow. That's exceptionally risky, in part because that money will need to be paid back on someone else's schedule. So exploring other options for achieving your investment goals in ways that offer lower risk seems prudent. No?
And how many subscribers do you think Warren Buffet, Motley Fool, etc. have? Millions? Let's say 10% of the subscribers act on the advice and buy whatever stock d'jour. What happens to the price of that stock then? Don't think talk will move stock prices? Just watch the Tesla stock price when Elon Musk decides to blow off some steam.
There could be a message there... You're about to step off a cliff. Many have died there. Would you rather we give you a push or should we at least offer you a parachute?
Why not? If you're only able to invest $800ish/month you can buy about five shares of Apple, for example. Or one share of Tesla. About one quarter of a share of Google/Alphabet. You will never get to anything that resembles a diverse portfolio that way. So how will you achieve diversity? By trading penny stocks? They come with their own risks.
I believe there are now services that will allow you to buy fractional shares. I'm thinking they function like mutual funds except they only invest in individual stocks, but I have no idea.
How will you know? What if you guess wrong? Will you be able to meet the loan payments while the stock market recovers? If this really, really is what you plan to do, I suggest re-reading Jack's advice regarding the volatility indicators. In addition to VIX there's also VXO. You can often find them as ^VIX and ^VXO in stock tracking apps/websites.
In your first post you mention that the interest rate on the loan is currently 1.67%. I'm assuming this is tied to the discount rate such that if the Norwegian central bank raises the key interest rate, the interest rate on your loan will increase as well. Google says the capital gains tax in Norway is 22%, so you have to have an investment return of 1.9% to break even. If the interest rate goes up to 2.67% (which is not unreasonable in the short term) you suddenly need a 3.0% return to break even. Interest rates can only go up - especially in Europe that's just coming out of negative interest territory. Will the rate go up and stay up or will the rate come back down once inflation is under control? None of us knows for sure. That adds risk for you. How high a stock market return will you need for the risk to be worthwhile to you? What's your confidence that you're able to time the market and get that return?
Tom
There’s little that I would add to Tom‘s good advice. The many risks he points out, and that you seem ignorant of, should cause you to suspect that in investing on your own, you would be a lamb going to slaughter. Your frustration with the advice you’ve been given in this thread further indicates to me that you are much too anxious to simply jump into the pool without understanding how deep is the water.
The game - the hardest game in the world - counts on the bright eyed lambs believing they can possibly succeed!
There was one guy at my previous work who was buying stocks with his credit card. Yes, everyone thought he was nuts. He believed he could, above and beyond the risk of a few 10's of k$ at 18% if things didnt go as anticipated.
It really does not help when there are news organizations (TV and WEB presence) that encourage people to empty their IRA and put it into the stock market. Even if you have to pay a tax penalty it will be worth it they say.
Really, you can easily get bad investing advice if you just look around.
I am also sure you can make money flipping or investing into housing. It can have the same risks as other investment vehicles.
I have also seen the housing investment thing go bad.
Really, you can easily get bad investing advice if you just look around.
I am also sure you can make money flipping or investing into housing. It can have the same risks as other investment vehicles.
I have also seen the housing investment thing go bad.
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