Investing/economics
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Mister_s




Posts: 19863

PostPosted: Sun, 9th Aug 2015 18:26    Post subject: Investing/economics
I don't know if this is the right forum to start such a discussion, but it's the only forum I visit. Maybe there are some economic savvy people in here who made a nice amount of money from relatively small investments.
The main question is: if you had about 10K euros, what would you do with it? How would you invest it? Is it even smart for someone who doesn't give a shit about the stock market, to go on that stock market? What investment options are there?

I've been wondering this for a while now, since interest rates are shit.
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garus
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PostPosted: Sun, 9th Aug 2015 18:53    Post subject:
snip


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freiwald




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PostPosted: Sun, 9th Aug 2015 19:02    Post subject:
start your own little drug imperium
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Mister_s




Posts: 19863

PostPosted: Sun, 9th Aug 2015 19:13    Post subject:
I'll read up on the stock market etc. before I do something like that, but I don't know how much you can learn it. I always assumed there's a huge chance factor in it, I don't like that.
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Invasor
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PostPosted: Sun, 9th Aug 2015 19:26    Post subject:
Mister_s wrote:
Is it even smart for someone who doesn't give a shit about the stock market, to go on that stock market?


Absolutely not. I usually don't recommend anyone to go into the stockmarket unless you are really willing to learn about it (and it takes a lot of time, as garus said).

I'd recommend investing in government bonds. Obviously, pick a country that pays well and has a relatively low risk at the same time. Brazil is paying around 12~14% per year, for up to 35 years (from 2018 to 2050, you pick the year when you want your money back, but in case you need it before that year you can also withdraw, except the interest rate won't be guaranteed in such situation). It is my pick.
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Immunity




Posts: 5610

PostPosted: Sun, 9th Aug 2015 19:32    Post subject:
Mister_s wrote:
I'll read up on the stock market etc. before I do something like that, but I don't know how much you can learn it. I always assumed there's a huge chance factor in it, I don't like that.


Yep, there's always risk in the stock market, it's the nature of the game. And make no mistake, the big fish manipulate it to their will on a daily basis - everyone else is just along for the ride.

That said, if you look at it from a long term perspective, and focus more on holding well established stocks simply for the dividend payouts, you'll rake in a lot more on that than just simply letting your money rot in a bank account for the pittance in interest they pay.

For example (and I'm not trying to plug the stock here, it's just something I'm familiar with as I've been doing a little research myself lately) - take AT&T.

ATT trades at ~$35 a share. They pay, currently, .47 cents per share 4 times a year (every 3 months). This dividend payout has been steadily increasing since 1998, and has never decreased since then, nor have they ever failed to pay it (which is their right if they so choose). Source: http://www.att.com/gen/investor-relations?pid=5675

Assuming you bought 1,000 shares (ideally you'd want to do this when the share price was at a low, obviously), you'd be raking in $1,880 a year simply for owning the stock (and not really having to keep up with its price on a day to day basis). Sure, you have to make a sizable investment to get there, but eventually it pays for itself, and its better then earning nothing at all on it.

Look for well established, stable companies that have a long history of paying dividends if you want to play it safe. This doesn't mean things can't go tits up (never underestimate corporate greed and shadiness), but it does mitigate the risk somewhat.

Isn't Spankie our resident guru investor / finance guy? I'm just a peasant that dabbles in this stuff a little - so probably not the best source.


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Morphineus
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PostPosted: Sun, 9th Aug 2015 20:08    Post subject:
I used to be comfortable with the Belgian stock market/companies... but like others have said: it takes quite some time to invest in it and become familiar. You need to read up on developments, connect other information on possible influences to the market...

It helps when you are working in a field that can connect to some of these. My advice to my friends was usually: only deal into stock you are familiar with and go for smaller profits than the riskier ones.

The dividends route is a quite secure route, any investment has risks but you can cancel out the big risks.

State bonds is another low risk investment. But the less risk the less payout.

So hear some people out who are active on the markets (think it was indeed Spankie who is) and go have a chat with your bank. Doesn't mean you have to go with them, but they can help with the basics.

There's ofcourse real estate, but that's a route that is also quite time consuming and it can create a lot of problems.


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dingo_d
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PostPosted: Sun, 9th Aug 2015 20:39    Post subject:
spankie was (is?) in the stock market business, I'm sure he'll now the most about it Smile


"Quantum mechanics is actually, contrary to it's reputation, unbeliveably simple, once you take the physics out."
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thats true you know. newton didnt discover gravity. the apple told him about it, and then he killed it. the core was never found.

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Mister_s




Posts: 19863

PostPosted: Sun, 9th Aug 2015 20:58    Post subject:
Government bonds sound like a good idea, but the problem is the vaulation of that country's currency. I'd have to go for a country like Brazil, Russia or Turkey, but when the euro/whatever ratio goes low I'm fucked. I'd have to go for sovereign bonds and buy in dollars, but the yield would be a lot lower.

My wife had some money before we married and I also, which combines to about 35K. Some of this was invested in land in Turkey, some of it is in the bank as Turkish Lira (annual rate for TL is 10.56%, while euro is 1.25%). Problem is, it's highly unlikely some kind of government will be formed in the near future, and tensions are rising. So if euro/TL goes 1:10 for example (1:3 right now), we're fucked. So we want to get the money out of there. My problem is, I know only NL and Turkey. Since it's practically impossible to invest in something in NL with a good payout, and there are problems coming up in Turkey, I have no clue what to do.

As for stock market, I know myself and I'll play safe. I cannot foresee which company will go high in the future, I just don't have that talent Sad
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Atropa




Posts: 878

PostPosted: Mon, 10th Aug 2015 08:35    Post subject:
If you're trading on a long time scale you really do not have to know that much. More is better obviously but you should still be able to find a fairly secure company to store your money.
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Invasor
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PostPosted: Mon, 10th Aug 2015 14:08    Post subject:
Take a look at the graphic for any random stock in the last 10 years, see how much you'd make on that. Then compare it to whatever you'd make in government bonds in a 3rd world country...

Both brazilian and Russian currencies are very low now, so it's a good time to buy...
Other than that, I guess there's real estate. Stockmarket is only profitable if you really care for it.
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Radicalus




Posts: 6421

PostPosted: Mon, 10th Aug 2015 15:03    Post subject:
I invest my money, but I only invest in small to medium size companies with growth potential. Strictly the tech sector, strictly in Hungary, because this is, what I know. In the last couple of years since I moved here, made my own company successful, and basically mapped out a large part of the market. I know the trends, the shifts, I put a lot of time in this.

Like this my investments make around 16-18% per year, and it takes fuckton of time and effort. The gains are not that breathtaking.

Most importnat is expecation management. You will NOT become rich reinvesting 10k, mate. You have to make peace with that. Unless you were some kind of very rare economic prodigy, but you'd know that by now, if you were Very Happy
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Il_Padrino




Posts: 7492
Location: Greece by the North Sea
PostPosted: Mon, 10th Aug 2015 15:03    Post subject:
Stay clear of the stock markets if you don't know much about it. Very Happy
I also wouldn't invest too much in governments, in particular BRICS countries. The last couple of years it's turned out the economies of these countries aren't all that great as thought (in particular Brazil). Especially now that governments are making lots of debts.

Real estate is only profitable when you have lots of money to invest.

Pesonally, I would invest in foreign currencies. Unfortunately, I know too little about it, but I've heard positive things about investing in Danish Krone (DKK), for example.
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Invasor
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PostPosted: Mon, 10th Aug 2015 20:15    Post subject:
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tainted4ever
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PostPosted: Mon, 10th Aug 2015 20:57    Post subject:
Be careful and don't invest in Forex. It's how a lot of newbie investors lose all their money/time.

Don't put the majority of your money (or any of it) in emerging markets (Brazil India China etc...) they tend to always become a shitshow.

I don't think you have the time or inclination to become a professional investor and earn outsized returns on your 10k. Even if you were an extraordinary investor, it would be extremely hard for you to become rich with those 10k.

So do something conservative and sensible. Place half your money in an index fund, and half your money in government bonds. Every 6 months, rebalance your portfolio so that half is in stocks, and half is in bonds. Then say goodbye to that money for 30 years and let it grow.

Personally I use the "Dryden S&P 500 Index Fund" (https://www.retirement.prudential.com/RSO/web/fundsheets/DCDSP5.pdf)

and a generic US government bonds PIMCO fund. I invest in these via my 401k provided by my company in the USA.

Investing in Europe is trickier. I don't know if you can easily access US index funds and bond markets. I don't know of anything similar to that in Europe that I can recommend. I don't know if I would even invest in European stocks and bonds at all, given the situation there right now. So maybe spankie can help you further.

-t


Sense Amid Madness, Wit Amidst Folly
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Mchart




Posts: 7314

PostPosted: Tue, 11th Aug 2015 04:15    Post subject:
Anyone saying the stock market is time consuming is lazy and/or doesn't know how it works.

At this point I make more money each year off the stock market then I do my real job. I may retire soon.

I will say if you have 10k to invest right now invest in oil.

I can quite easily describe how capital gains taxation works in the US, but you being in Europe I have no idea how that works.

Remember - Any money you aren't making at least 2-4% a year return on is undergoing devaluation from inflation. You need to invest any money you have beyond a basic buffer you have for savings.

I've made a fortune on $crk and $exxi in the past week. I doubled my money on $crk in only a couple days, $exxi is likely to do the same as they are in a similar position. Many of the small cap oil companies were hammered by this recent down trend in oil, but the bottom has likely been found and most are now rebounding again.

Oil has my attention right now as it is, frankly, easy money. What I generally look for though are swing plays. I look for a stock that loses 30-40% in a day due to 'bad' news, buy it, and more often then not within a couple of months that stock will go back up 30% again. I make a fairly consistent 30-50% by swing trading.
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Mister_s




Posts: 19863

PostPosted: Tue, 11th Aug 2015 11:07    Post subject:
It seems I severely underestimated investing Smile I thought there would be some good investment tips for a reasonable gain (not 1-2%). The purpose isn't getting rich, I don't care much about that.

As for oil. Wouldn't it be dangerous to go into oil considering Iran will be flooding the market? I would've thought the current prices will be in place for a long while.
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Invasor
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PostPosted: Tue, 11th Aug 2015 14:46    Post subject:
Mchart wrote:
Anyone saying the stock market is time consuming is lazy and/or doesn't know how it works.
...
Oil has my attention right now as it is, frankly, easy money. What I generally look for though are swing plays. I look for a stock that loses 30-40% in a day due to 'bad' news, buy it, and more often then not within a couple of months that stock will go back up 30% again. I make a fairly consistent 30-50% by swing trading.

Rolling Eyes

I've seen such stocks go down like the titanic (as in never recovering) more often than not... In fact it was my only relevant mistake in the stockmarket so far, I lost about 20k because I was so sure this one small oil company was going to boom in a few months (it did boom: imploded). At least I learned from that...
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Il_Padrino




Posts: 7492
Location: Greece by the North Sea
PostPosted: Tue, 11th Aug 2015 17:03    Post subject:
Yes, don't get blinded by one success story, in particular online Razz
For every winner, there's (at least) one loser. This is very true for the stock market.

I've heard about guys investing in pennystock, claiming it was the best way to make fast money. Which can be true, but you lose it equally fast Laughing


There must have been a door there in the wall, when I came in.
Truly gone fishing.
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Mchart




Posts: 7314

PostPosted: Tue, 11th Aug 2015 18:37    Post subject:
Invasor wrote:
Mchart wrote:
Anyone saying the stock market is time consuming is lazy and/or doesn't know how it works.
...
Oil has my attention right now as it is, frankly, easy money. What I generally look for though are swing plays. I look for a stock that loses 30-40% in a day due to 'bad' news, buy it, and more often then not within a couple of months that stock will go back up 30% again. I make a fairly consistent 30-50% by swing trading.

Rolling Eyes

I've seen such stocks go down like the titanic (as in never recovering) more often than not... In fact it was my only relevant mistake in the stockmarket so far, I lost about 20k because I was so sure this one small oil company was going to boom in a few months (it did boom: imploded). At least I learned from that...


I've been trading since 2007.

The opportunity oil presents right now is incredible.

This isn't tech. This is a commodity. Two completely different sectors.

I've hardly ever made money off tech. I maybe make a couple percent here or there off tech swing plays, but tech is tech. It's a horrible investment usually because of all the unknowns.

Oil as a commodity has many knowns. Fact - oil is at an incredible low right now due to the influx from shale and the Saudis over producing.

Fact - while there is an over supply of oil right now demand is ever increasing. By 2030 there will be an estimated 62 mbpd deficit. This is roughly 5 Saudi Arabias per day of oil. The only way to meet increased demand is by using increasingly more expensive extraction methods that have short term impact on the supply increases anyways.

The point is that we are sitting at peak cheap oil right now. Oil will never again reach prices this low. If you think I'm full of shit that's fine, but you are missing out on investment opportunities of a lifetime right now.

And this is the key to trading that many don't understand. You don't invest in bubbles. You don't invest when everyone else is buying. You buy the panic. You buy when everyone else has sold/selling. Buying the fear is how you make great gains. You're buying after the bubble has already burst.

Buy when everyone is selling and sell when everyone is buying. The simplest piece of advice that people do not understand because they let emotion drive their investments.



There isn't a single tech stock I'd put any money in right now. Same goes with most of the market as things are at all time highs.
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Mchart




Posts: 7314

PostPosted: Tue, 11th Aug 2015 19:01    Post subject:
Mister_s wrote:
It seems I severely underestimated investing Smile I thought there would be some good investment tips for a reasonable gain (not 1-2%). The purpose isn't getting rich, I don't care much about that.

As for oil. Wouldn't it be dangerous to go into oil considering Iran will be flooding the market? I would've thought the current prices will be in place for a long while.


The best case estimates for Iran are 500k bpd. To even reach this output will require 3-4 years of building up infrastructure to do it. They are a drop in the bucket. The current price of oil already has that level of fear accounted in as it is as well.

And again, by 2030 we will be short 62 mbpd. Only increasingly expensive extraction technologies will fill this gap, which means a higher cost. The Earth won't magically grow an extra 5 Saudi Arabias by 2030 to give us cheap oil extraction.
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nouseforaname
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PostPosted: Wed, 12th Aug 2015 03:23    Post subject:
can I be the dick that asks if you have a pension/retirement plan? if I had an extra 10K I could put it in my retirement plan and not pay the ~45% taxes on it, and still get a small return on investment when I cash out in 30 years, that would seem like a safe investment. In Canada you don't pay the marginal tax rate on retirement savings contributions (which is anything past 85K in income).


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Mchart




Posts: 7314

PostPosted: Wed, 12th Aug 2015 03:36    Post subject:
You can invest in stocks and still put it into a 401k/IRA and get the tax benefit. At least that's how it works in the US, not sure about Europe.

I have two different brokerage accounts. The reason why follows -

My normal 'work' taxable income puts me in the second to last tax bracket. This means this money is taxed at 15%. Any short term capital gains (Those held under a year) are also taxed at 15%. Any long term capital gains are taxed at 0% in the bottom two tax brackets. So any money I make off stocks/whatever that I held for over a year I pay nothing on. I have about a $13k gap I can make off my stocks until any income over that additional $13k puts it in the higher tax bracket. In this higher tax bracket long term gains are now taxed at 10%.

So once I break that additional $13k (Which happens fast) I start using my roth IRA brokerage account.

Although as capital gains (Stock trading) is slowly becoming my primary source of income I have been using the IRA brokerage account less and less as I have increased living expenses since i'm paying more / living better.

For the purposes of the OP, yes, he should open a retirement style account for the tax benefits as he obviously will not be using just $10k for anything other then end-game/retirement.

Again completely clueless how this works in Europe besides the fact that you guys get taxed to fuck and back.
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Mister_s




Posts: 19863

PostPosted: Wed, 12th Aug 2015 11:16    Post subject:
nouseforaname wrote:
can I be the dick that asks if you have a pension/retirement plan? if I had an extra 10K I could put it in my retirement plan and not pay the ~45% taxes on it, and still get a small return on investment when I cash out in 30 years, that would seem like a safe investment. In Canada you don't pay the marginal tax rate on retirement savings contributions (which is anything past 85K in income).

We have 35K in savings as I said earlier, but I'm only willing to risk 10K. Besides that, we have some property in Turkey, which may or may not turn into something in the future. Everyone gets a pension here (Netherlands) and the pension build up from my work should be enough (though no one can predict 40 years into the future obviously).

I opened this thread because we fear bad things might happen in Turkey, where the majority of our money is.

I'll look into oil.
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nouseforaname
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PostPosted: Thu, 13th Aug 2015 00:39    Post subject:
Mister_s wrote:
nouseforaname wrote:
can I be the dick that asks if you have a pension/retirement plan? if I had an extra 10K I could put it in my retirement plan and not pay the ~45% taxes on it, and still get a small return on investment when I cash out in 30 years, that would seem like a safe investment. In Canada you don't pay the marginal tax rate on retirement savings contributions (which is anything past 85K in income).

We have 35K in savings as I said earlier, but I'm only willing to risk 10K. Besides that, we have some property in Turkey, which may or may not turn into something in the future. Everyone gets a pension here (Netherlands) and the pension build up from my work should be enough (though no one can predict 40 years into the future obviously).

I opened this thread because we fear bad things might happen in Turkey, where the majority of our money is.

I'll look into oil.


ahh, I was thinking about ongoing investment from annual income. I think kinda the tl;dr of mcharts posting is just figuring out how to pay the least taxes on moving work income to investments. we don't have quite the same thing in Canada as the US that you get the same tax free benefit of investing income into stocks ... although we are about to put $10K per year into a tax free savings account (using any investment strategy) and don't have to pay any taxes on gains (also dividends are tax free and you can withdraw at any time).

also I have both a government pension plan and an employer pension plan but I still don't think it will be enough, which is why additional savings is necessary. but tbh if real estate is OK in the netherlands why not just put the money towards a new house/condo?


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sanchin




Posts: 763
Location: Poland
PostPosted: Thu, 13th Aug 2015 06:56    Post subject:
Because 10k is not enough for a new house. I've got a similar problems - I earn too much to just let the money rot in the bank, and to little to afford playing in the real estate market. I've been thinking about buying a garage (or even two, depends on the prices which are ridiculous) and renting it for a long time. Number of cars grows constantly, parking spaces do not - at least not at the same pace.
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Mchart




Posts: 7314

PostPosted: Thu, 13th Aug 2015 08:48    Post subject:
Again, small cap oil stocks. Anyone want to guess how much money I've made since I suggested to everyone on here to invest in exxi and crk?

You could have already doubled your money on crk.

Exxi, GDP, crk, sd, mcep, bxe

Bottom was found two weeks ago. The longer you wait the more you miss out on. Buy the fear and take the "risk".

There is now a downtrend formed in eia/api production reports and continued inventory draws for over a month. The price of oil is only down due to fear from a number of events and the lag time / false hope of shale output.

Oil will be over $100 per barrel before you know it and all these small oil producers make money at around the $65-$70 barrel mark. All I mentioned have enough spare cash on hand to survive at least a year with prices at $40 per barrel. Exxi in particular will likely start buying back bonds/shares which will cause the price of the stock to skyrocket like crk.

End rambling
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AmpegV4




Posts: 6248

PostPosted: Thu, 13th Aug 2015 08:58    Post subject:
@Mchart are you just doing straight stock or leveraged trades over short periods? I see I can trade cfd's on Brent and west Texas oil also agree price is at unprecedented low.
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Mchart




Posts: 7314

PostPosted: Thu, 13th Aug 2015 09:05    Post subject:
I wish I would take the time to figure out how to trade options, but I haven't done so. I trade normal shares of said tickers.

You could try your luck and gamble with UWTI but that has decay unlike a normal stock.

EXXI in particular is a very safe play as they have 2b cash on hand, lots of mineral rights/land, and with a 170m market cap! ($300 mil at 1.8 share!) They could easily buy all outstanding shares like CRK is doing and it would make a mint for current owners. EXXI will likely be to 15-20 a share in a year IMO.

So to clarify I'm not trading the commodity itself, I'm trading small US oil producers who have been raped by this drop in oil prices. Although as I mentioned you can trade something like UWTI which is a 3x etn based off WTI crude price.

Of course I could be wrong. Unlikely in the case of oil though, and with the risk/reward on Exxi it's insane not to. If it goes back up to $11 a share in a year you'll turn $10k into $100k.

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Mister_s




Posts: 19863

PostPosted: Thu, 13th Aug 2015 16:37    Post subject:
exxi looks good, but I don't understand how you can predict it'll go up. Are you just guessing/hoping it'll go up since it's very low, or do you have some info I can't find? I might be willing to throw 2K at it, I must read more about it (and the stock market itself), but it seems just a random gamble. Going down almost 80% while the overall rating is 14% up, doesn't give me much confidence.
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