Where to gather financial knowledge?
Discussion
Forgive what must seem like a post of ignorance, but I feel it's ever more relevant in this day and age.
I have read a few books on investing where I gained the basic fundamentals of investments and how they work. I also look at my own chosen funds and how they're invested and am happy for others to make the dicisions they're paid to make to ensure those funds (hopefully) prosper.
But what I really lack is the foresight to see opportunities and separate what may be scams and what is a legitimate financial investment. Scrolling through the 'fousands of income streams' it's clear there's a lot to weary of. I have a personal rule that if i find something on Facebook/insta/or some random spam email drops on me then I don't give it the time of day. But where do forgive the pun 'The adults' speak of and share insight. I went through a phase of buying the financial times but to be honest it was largely beyond my comprehensionbof understanding at the time, this was 20 years ago. Is the financial times still a legitimate source of information?
For what I've discovered mainly, is that as soon as you start delving online for investment discussion the algorithms force feed crypto scam artists and the like your way which is not what I'm looking for.
This place is great by the way.. which is why I'm asking here really as intelligent people bring info to the table in this forum. I'm just interested in where that info comes from.
I have read a few books on investing where I gained the basic fundamentals of investments and how they work. I also look at my own chosen funds and how they're invested and am happy for others to make the dicisions they're paid to make to ensure those funds (hopefully) prosper.
But what I really lack is the foresight to see opportunities and separate what may be scams and what is a legitimate financial investment. Scrolling through the 'fousands of income streams' it's clear there's a lot to weary of. I have a personal rule that if i find something on Facebook/insta/or some random spam email drops on me then I don't give it the time of day. But where do forgive the pun 'The adults' speak of and share insight. I went through a phase of buying the financial times but to be honest it was largely beyond my comprehensionbof understanding at the time, this was 20 years ago. Is the financial times still a legitimate source of information?
For what I've discovered mainly, is that as soon as you start delving online for investment discussion the algorithms force feed crypto scam artists and the like your way which is not what I'm looking for.
This place is great by the way.. which is why I'm asking here really as intelligent people bring info to the table in this forum. I'm just interested in where that info comes from.
rufusgti said:
Forgive what must seem like a post of ignorance, but I feel it's ever more relevant in this day and age.
I have read a few books on investing where I gained the basic fundamentals of investments and how they work. I also look at my own chosen funds and how they're invested and am happy for others to make the dicisions they're paid to make to ensure those funds (hopefully) prosper.
But what I really lack is the foresight to see opportunities and separate what may be scams and what is a legitimate financial investment. Scrolling through the 'fousands of income streams' it's clear there's a lot to weary of. I have a personal rule that if i find something on Facebook/insta/or some random spam email drops on me then I don't give it the time of day. But where do forgive the pun 'The adults' speak of and share insight. I went through a phase of buying the financial times but to be honest it was largely beyond my comprehensionbof understanding at the time, this was 20 years ago. Is the financial times still a legitimate source of information?
For what I've discovered mainly, is that as soon as you start delving online for investment discussion the algorithms force feed crypto scam artists and the like your way which is not what I'm looking for.
This place is great by the way.. which is why I'm asking here really as intelligent people bring info to the table in this forum. I'm just interested in where that info comes from.
Reading books is a great idea but you need to establish what you want to learn and why. Investing in stocks is something everyone should do (and could do if it weren't for ignorance). The biggest issue is most people want to make it rich and super fast and this is where scams come in. ALL these AI algho systems are scams-the ones that aren't, you can not invest in. And the very good ones don't take client money any longer because if they work they don't need anyone elses money.I have read a few books on investing where I gained the basic fundamentals of investments and how they work. I also look at my own chosen funds and how they're invested and am happy for others to make the dicisions they're paid to make to ensure those funds (hopefully) prosper.
But what I really lack is the foresight to see opportunities and separate what may be scams and what is a legitimate financial investment. Scrolling through the 'fousands of income streams' it's clear there's a lot to weary of. I have a personal rule that if i find something on Facebook/insta/or some random spam email drops on me then I don't give it the time of day. But where do forgive the pun 'The adults' speak of and share insight. I went through a phase of buying the financial times but to be honest it was largely beyond my comprehensionbof understanding at the time, this was 20 years ago. Is the financial times still a legitimate source of information?
For what I've discovered mainly, is that as soon as you start delving online for investment discussion the algorithms force feed crypto scam artists and the like your way which is not what I'm looking for.
This place is great by the way.. which is why I'm asking here really as intelligent people bring info to the table in this forum. I'm just interested in where that info comes from.
All FX trading systems are scams. They don't work. I say all-the ones you are invited to invest in.
Stick with a tracker from a big name and once you start learning you may feel comfortable buying your own stocks.
If you think you will trade £1k to £10k, the chances of losing your money are 99%.
Investing is a life long adventure.
Over the long term almost no one, including seasoned stock pickers, out performs an index tracker.
I don't even think Buffet/Berkshire Hathaway out performed the S&P500 index over the last decade.
For passive buy and hold, they are probably the way to go. As for actively trading, you're attempting to compete with algorithms programmed by super genius quants that operate on millisecond timing.
Good luck.
I don't even think Buffet/Berkshire Hathaway out performed the S&P500 index over the last decade.
For passive buy and hold, they are probably the way to go. As for actively trading, you're attempting to compete with algorithms programmed by super genius quants that operate on millisecond timing.
Good luck.
I spent a bunch of time getting up the curve inq3 last year and I’m very happy with my returns indeed!
For what I was doing and with my size of investments InteractiveInvestor provided a very low fee %age, much lower than the other platforms and it works fine for me, so recommended.
https://www.ii.co.uk/ii-for-friends/customer
If you have >10k to invest, if I intro you and we split the sign on, so you’d have zero fees for the year and £100 cash!
For what I was doing and with my size of investments InteractiveInvestor provided a very low fee %age, much lower than the other platforms and it works fine for me, so recommended.
https://www.ii.co.uk/ii-for-friends/customer
If you have >10k to invest, if I intro you and we split the sign on, so you’d have zero fees for the year and £100 cash!
RichTT said:
Over the long term almost no one, including seasoned stock pickers, out performs an index tracker.
That's an over-simplification. https://www.fool.co.uk/investing-basics/isas-and-i..."For many years, there has been a big discussion in the world of finance as to whether index trackers are a better way to invest than managed funds. It’s sometimes called the Active vs. Passive debate. The evidence is fairly clear cut, however, and it shows that index trackers beat the vast majority of managed investment funds over the long term.
"It’s certainly true that the best managed funds will do better than an index tracker, even over long periods. However, the difficulty is identifying which ones are the ‘best’."
Notwithstanding its curious name, Motley Fool is a great resource.
As is Investopedia.
As is Morningstar, particularly since their fund ratings show you which funds have performed well in the short, medium and long term.
As above it's not really a case of learning, but keeping costs low and not getting too greedy.
A low cost tracker fund is a good start. I personally also have a shares account with HL, and do a bit of trading, with a smallish amount of funds outside of any tax wrapper.
I am 40% down on one share (at one point I was 100% up, and got greedy, lesson learnt).
Know the tax implications if investing outside of any wrappers, understand how the fees will impact your investment. Ie if I invest £100 on HL, it costs £12 a trade therefore straight away I'm 12% down! I personally on buy in with a minimum of 1k.
Don't invest what you can't afford to lose.
I have in no way made good money, it isn't easy as a private investor.
A low cost tracker fund is a good start. I personally also have a shares account with HL, and do a bit of trading, with a smallish amount of funds outside of any tax wrapper.
I am 40% down on one share (at one point I was 100% up, and got greedy, lesson learnt).
Know the tax implications if investing outside of any wrappers, understand how the fees will impact your investment. Ie if I invest £100 on HL, it costs £12 a trade therefore straight away I'm 12% down! I personally on buy in with a minimum of 1k.
Don't invest what you can't afford to lose.
I have in no way made good money, it isn't easy as a private investor.
There will always be some funds which outperform an index tracker for a period, and there will always be some funds which underperform for a period.
No one has ever come up with any form of reliable way of knowing in advance which funds might outperform for any given period of time. If someone does have a methodology for this, I’d be all ears!
Most private investors just buy whatever has done well ( I.e. using past performance) which almost invariably is a bad strategy.
No one has ever come up with any form of reliable way of knowing in advance which funds might outperform for any given period of time. If someone does have a methodology for this, I’d be all ears!
Most private investors just buy whatever has done well ( I.e. using past performance) which almost invariably is a bad strategy.
One point I would recommend watching out for is the difference between "investing" and "trading".
Although they may look similar at face value they really aren't. An investor who's paying attention and not too greedy should achieve success by following a few basic rules. You don't need to be an expert and if you can save >1% a year on fees you're off to a head start. To get involved in trading without comprehensive knowledge and experience is IMO high risk.
Saving just 1% a year on fees? That doesn't sound much. What's the problem?
The problem is that 25 years later a quarter of your money has made its way into someone else's pocket!
Although they may look similar at face value they really aren't. An investor who's paying attention and not too greedy should achieve success by following a few basic rules. You don't need to be an expert and if you can save >1% a year on fees you're off to a head start. To get involved in trading without comprehensive knowledge and experience is IMO high risk.
Saving just 1% a year on fees? That doesn't sound much. What's the problem?
The problem is that 25 years later a quarter of your money has made its way into someone else's pocket!
Panamax said:
RichTT said:
Over the long term almost no one, including seasoned stock pickers, out performs an index tracker.
That's an over-simplification. https://www.fool.co.uk/investing-basics/isas-and-i..."For many years, there has been a big discussion in the world of finance as to whether index trackers are a better way to invest than managed funds. It’s sometimes called the Active vs. Passive debate. The evidence is fairly clear cut, however, and it shows that index trackers beat the vast majority of managed investment funds over the long term.
"It’s certainly true that the best managed funds will do better than an index tracker, even over long periods. However, the difficulty is identifying which ones are the ‘best’."
Notwithstanding its curious name, Motley Fool is a great resource.
As is Investopedia.
As is Morningstar, particularly since their fund ratings show you which funds have performed well in the short, medium and long term.
DanL said:
Surely what that’s really saying is that unless you get lucky, trackers are better than managed funds… I’m sure the funds that outperform will tell you it’s skill or knowledge, but odds are it’s luck.
Golf. In any season, most players fail to win the Masters despite the fact they're all are trying to win. But one player does win. Is that just pure luck? And if he comes second, does that mean he's no better than the average of all the non-winners?Famous saying, "The more I practice the luckier I get".
DanL said:
Surely what that’s really saying is that unless you get lucky, trackers are better than managed funds… I’m sure the funds that outperform will tell you it’s skill or knowledge, but odds are it’s luck.
100%Hence you get some funds that are absolutely great for 3 years then become a complete dog.
And others that are complete dogs for years, and then rocket up to the top of the performance table.
Panamax said:
DanL said:
Surely what that’s really saying is that unless you get lucky, trackers are better than managed funds… I’m sure the funds that outperform will tell you it’s skill or knowledge, but odds are it’s luck.
Golf. In any season, most players fail to win the Masters despite the fact they're all are trying to win. But one player does win. Is that just pure luck? And if he comes second, does that mean he's no better than the average of all the non-winners?Famous saying, "The more I practice the luckier I get".
For spotting scams, just ask yourself this: if I knew about some secret method to get rich in the markets, would I be advertising it on social media, or keeping it to myself and quietly getting rich as hell? Nine times out of ten that'll keep you out of trouble.
Not that it's a scam, but I also wouldn't bother investing in anything like whiskey or art unless you're an expert in the area already, or have a significant base of normal assets first. Putting 10k in whisky is fine if your portfolio of funds is say 250k. Putting 10k in whiskey as your first investment? Braver man than I am.
I'd suggest taking a course on basic accounting so you know what financial statements really mean (be mindful of the way US rules can be quite different to international standards).
I'd suggest learning a bit about UK tax laws so you can at least be aware of what you don't know.
Maybe some basic financial maths so you know about commonly used financial metrics and basic calculations like discounted cashflow, interest rates and so on.
All of this can be had for free easily enough. CFAB (if you can study it without a training contract - I'm not sure) and certificate in treasury fundamentals from the association of corporate treasurers might not be a bad shout if you feel like paying to get actual certifications.
But when it comes to actually learning investing, chances are you'll pretty quickly learn that actually you're best off just using some tracker funds. I used to spend ages trying to pick stocks myself but rapidly discovered that actually with the amount of money I have to manage, there's really not a huge amount of point. Even if I find a good stock, I am completely hit and miss at getting out of the trade at the right time. I see a better return by dedicating that time, effort and mental capacity to my career.
Not that it's a scam, but I also wouldn't bother investing in anything like whiskey or art unless you're an expert in the area already, or have a significant base of normal assets first. Putting 10k in whisky is fine if your portfolio of funds is say 250k. Putting 10k in whiskey as your first investment? Braver man than I am.
I'd suggest taking a course on basic accounting so you know what financial statements really mean (be mindful of the way US rules can be quite different to international standards).
I'd suggest learning a bit about UK tax laws so you can at least be aware of what you don't know.
Maybe some basic financial maths so you know about commonly used financial metrics and basic calculations like discounted cashflow, interest rates and so on.
All of this can be had for free easily enough. CFAB (if you can study it without a training contract - I'm not sure) and certificate in treasury fundamentals from the association of corporate treasurers might not be a bad shout if you feel like paying to get actual certifications.
But when it comes to actually learning investing, chances are you'll pretty quickly learn that actually you're best off just using some tracker funds. I used to spend ages trying to pick stocks myself but rapidly discovered that actually with the amount of money I have to manage, there's really not a huge amount of point. Even if I find a good stock, I am completely hit and miss at getting out of the trade at the right time. I see a better return by dedicating that time, effort and mental capacity to my career.
Edited by Wololo on Saturday 20th January 18:18
I see investing as a trade like any others - those who are good making a living out of being good at it.
Can't know / do everything, so happy to find the right person / institution and buy their services - they can then invest on my behalf and earn a %. so I can get on with doing my thing.
Can't know / do everything, so happy to find the right person / institution and buy their services - they can then invest on my behalf and earn a %. so I can get on with doing my thing.
RichTT said:
Wacky Racer said:
Rule 1 Never lose money
Rule 2 Never forget rule 1
Warren Buffett.
He also made friends with Bill Gates and told him to diversify out of $MS stock and cost bill hundreds of billions.Rule 2 Never forget rule 1
Warren Buffett.
"let your winners ride" David Sacks
(yes this is tongue in cheek)
If you are looking at individual shares/crypto that have out performed the whole market, then you need a whole lot of luck! The magnificent 7 make up over 25% of the 500 companies and if you had invested in those individual companies over the last few years, you would have had amazing high returns, if you had invested in the whole S&P then returns would have been around 12% which beats any savings accounts by a mile and you had to do zero work.
What people fail to talk about with Warren Buffet is that most of his wealth was generated after 60 and he is 93!!
If you had invested 5k (never added a penny after) when you were 20 years old and managed to get 12% return on average until you were Warren Buffets age, you would have over 30million.
Longevity and consistency is the hard part.
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