Investment/Stock market questions!

[stephenNUTS]

Hey guys

I think alot of you know I frequent 2+2 forums BFI section and try my best to help any newbies/traders/investors with stock market or investment related issues

If you want to ask any Q's about this subject feel free to post them here.I am a retired former CEO of a Wall Street brokerage/trading firm and have 25+yrs experience in this arena.While I am NOT going to give out 'individual' stock picks or have the time to analyze each persons whole portfolio...I know I can help out in some fashion either way

Just pay attention,watch and you will learn

Thanks,
Stephen Feraca

[Tickner]

I'm wondering what books you think would be most useful to someone who knows a little about finance and investing, but has never actually did any trading before.

I am currently in the middle of "A Randon Walk Down Wall Street" and I especially liked the brief history of "castles in the air".

[stephenNUTS]

Originally Posted by Tickner

I'm wondering what books you think would be most useful to someone who knows a little about finance and investing, but has never actually did any trading before.

I am currently in the middle of "A Randon Walk Down Wall Street" and I especially liked the brief history of "castles in the air".

Hey Tickner

Couple of questions for you and others when they respond ...as it will make it easier to give you a better/more accurate opinion:

How experienced are you and what type of time frame with regard to investing in the stock markets ?

Such as trading shorterm(day or swing trades)......investing Medium-Longer term (6+ months or more)....or LONG TERM buy and hold 1yr+ through whenever?

Do you invest in stocks,mutual funds ,ETF's,bonds,otions,etc?

TTYL,
Stephen

[Tickner]

Right now I do not invest. I am currently in university and do not have much extra money to save. That said I am majoring in Finance/Economics so I know a good bit about the "language" of investing and the general theory from the academics.

In the future I will certainly be investing. I am really not sure where I will be in 5-10 years but I will be doing something related to business.

I looked into options trading and I think I would be interested in learning more about that path. I have also always been interested in learning about day-traders and the analytical/thought processes they use to make money consistently (does this person even exist?)

Through reading A Random Walk, it basically has told me so far that long run the market has developed returns of approx 12%/year for investors historically and that if you buy and hold a properly diversified portfolio you expect to make pretty good returns with decently low risk. It also points out that technical analysis / fundamental analysis both have their pros/cons but any strategy that requires you to be constantly buying/selling over the short term will have very high transaction costs and won't allow you to beat the market because of those costs and all the extra time you have to put into it.

Meh, maybe I am just rambling, I am so new to all this

[crunchi]

Hi stephen,

Currently I put all my savings into index funds, but i am very keen to try out some stock picking because i know that it is possible to achieve higher returns. My time frame is long term.

So my question is:

How would you recommend a 23 yr old go about learning all there is to know about stock picking?

[stephenNUTS]

Originally Posted by Tickner

Right now I do not invest. I am currently in university and do not have much extra money to save. That said I am majoring in Finance/Economics so I know a good bit about the "language" of investing and the general theory from the academics.

In the future I will certainly be investing. I am really not sure where I will be in 5-10 years but I will be doing something related to business.

I looked into options trading and I think I would be interested in learning more about that path. I have also always been interested in learning about day-traders and the analytical/thought processes they use to make money consistently (does this person even exist?)

Through reading A Random Walk, it basically has told me so far that long run the market has developed returns of approx 12%/year for investors historically and that if you buy and hold a properly diversified portfolio you expect to make pretty good returns with decently low risk. It also points out that technical analysis / fundamental analysis both have their pros/cons but any strategy that requires you to be constantly buying/selling over the short term will have very high transaction costs and won't allow you to beat the market because of those costs and all the extra time you have to put into it.

Meh, maybe I am just rambling, I am so new to all this

Tickner

You are not rambling at all and for the most part your post is quite accurate.Historically the markets have returned 10%+ from a LONG TERM buy & hold perspective.However as an experienced trader/investor I can say with conviction ...that a a much greater return can EASILY be attained with proper timiing ,research,analysis,money management,and most importantly discipline.

GL,
Stephen

[stephenNUTS]

Originally Posted by crunchi

Hi stephen,

Currently I put all my savings into index funds, but i am very keen to try out some stock picking because i know that it is possible to achieve higher returns. My time frame is long term.

So my question is:

How would you recommend a 23 yr old go about learning all there is to know about stock picking?

Hey Crunch.

As a young/new investor that is looking over the long term,starting your investment portfolio with simple index/mutual funds or ETF's is a great starting point.As you get more experienced with the markets.you can then switch to a 'stock picking' game plan.Obviously this will entail abit more risk....but with the proper work/research/discipline involved,the rewards can dwarf the former returns

GL,
Stephen

[Tickner]

Stephen,

Are there any financial funds (mutual funds, EFT, whatever) that consistently return > 10-12%?

[crunchi]

Originally Posted by stephenNUTS

However as an experienced trader/investor I can say with conviction ...that a a much greater return can EASILY be attained with proper timiing ,research,analysis,money management,and most importantly discipline.

GL,
Stephen

Stephen is this attainable for someone who already holds a full time job?

How many hrs/wk do you and other successful investors put into financial analysis?

[stephenNUTS]

Originally Posted by Tickner

Stephen,

Are there any financial funds (mutual funds, EFT, whatever) that consistently return > 10-12%?

NO

Tthere is NO guarantee in the stock market and anyone who tells you so is lying.But over many many years...HISTORICAL returns have been 10%+

Howver ....the tough/downside years feel horrible(like now) but over the LONG TERM your money invested in MF's or INDEX funds will do quite well

GL
Stephen