(Part 3) Best investing books according to redditors
We found 3,128 Reddit comments discussing the best investing books. We ranked the 612 resulting products by number of redditors who mentioned them. Here are the products ranked 41-60. You can also go back to the previous section.
First of all, thanks for sharing. Code & idea implementation sucks, but it might turn into a very interesting discussion! By admitting that your trade idea is far from being unique and brilliant, you make a super important step in learning. This forum needs more posts like that, and I encourage people to provide feedback!
Idea itself is decent, but your code does not implement it:
Just because 0 looks good, you decide that 0 is the best threshold. You have to do a research here. You'd be surprised by how counter intuitive the result might be, or how super unstable it might be=))
The lesson is: idea first. Define it well. Then try to pick minimal number of indicators (or functions) that implement it. Check for parameter space. If you have too many parameters, discard your idea, since you will not be able to tell if it is making/losing money because it has an edge or just purely by chance!
What is left out of this discussion: cross validation and picking best parameters going forward
Recommended reading:
I'll also be a little more charitable. You need to read this book and stop selling things based on your spurious views of biology: http://www.amazon.com/Antifragile-Things-That-Gain-Disorder/dp/1400067820
either that or realize that you are a massive charlatan and take proper action: http://www.technovelgy.com/graphics/content08/suicide-booth.jpg
Probably start with something like:
And then you decide whether you are going to focus on one of the two primary trading strategies (mean reversion or momentum) and focus on that one for a bit.
And that's assuming you have the programming knowledge to implement a system that can handle this of course - otherwise I'd go start with C# or C++ until further notice.
Do you mind a quick story?
I was a triple finance major. My university offered a series of courses that allowed me to get degrees in corporate financial management, commercial bank management, and investment science & portfolio management. They taught me that "if you crunch all the numbers, you can definitely get the 'right' answer for what a stock is worth."
I served as the president of the investment club for 2 years - we had $500k in real money and we had beat the S&P by over 2% every year since the fund started.
Here's the BIG part they missed (so much for a finance degree I guess).
Timing... is... everything.
I had bought NuSkin enterprises personally sometime early in the year. I think I roughly doubled my money and figured it was a good stock, so it should be bought. Not having been taught that timing matters, I recommended it to the investment club. Needless to say, it was NOT a good buy... at least, not at that price.
The club lost a little money on it but I learned a valuable lesson. Timing matters.
My friend went to Chicago to be a technical trader and I became a financial advisor. Eventually I learned that 'trading' was not a sin, even though it was taboo in school. Buy a good stock at a bad price - bad trade. Buy a terrible stock at a bargain - moolah!
I think it's great that you're trying to get a foundation for investing, but keep in mind that investing IS really about timing. Sure, you can crunch the numbers, but if you can't look at a chart and say "it's not a good time to buy" then it's all meaningless.
Try THIS BOOK or find something like it. It's important to be able to read price charts and not just to crunch numbers. In fact, if you get good enough at reading the charts you won't need the numbers. Other people can calculate them and leave their footprints in the price charts for you to follow.
Then, of course, pick the book that interests you the most in your series. Then the one that interests you 2nd most. If you get bored with one, put it on a shelf and come back later.
There is no truth in those books, only stories - you make the truth in your own mind based on what you will perceive reading them.
Best of luck.
My recommended reading list includes One Up on Wall Street, Fail-Safe Investing, The Black Swan, How an Economy Grows and Why It Crashes, and Extraordinary Popular Delusions and The Madness of Crowds. The first book talks about picking individual stocks based on what you already know, the second about structuring a portfolio for growth while still playing defense, the third about common fallacies and hubris, the fourth about basic economics, and the fifth about irrational behavior.
If your money is sitting in a US bank account, then you're making a 100% bet on the future of the US dollar. At a minimum, diversify your currency holdings by buying sovereign and high-grade corporate debt in countries with strong currencies.
Caution: Wall of text to follow.
Firstly, congrats on caring at a young age about your finances. That's something not a lot of people can say. With that being said I'll like to take each of your paragraphs in turn and answer your questions at the end.
NOTE: If you just want answers to your questions and not my advice skip ahead.
> While I believe that there are some truths behind "Money doesn't buy happiness", it is a lot easier to be happy knowing that you are well-off.
As a word to the wise from someone a little further down the road let me just say there is more truth than you yet realize in those 4 simple words. Many people don't come to see the truth till their old age looking back on a life filled with regret, so take some time now and seriously contemplate it, because the reality is in 85 very short years you'll likely be dead, and all you ever had will belong to someone else. If the only happiness you get in this life is seeing dollars in your bank account you'll miss out on a lot.
> The leading cause of divorces are because of financial issues. I mean, that has to speak for something.
In the vast majority of divorces it's not a lack of money that's the problem, it's a lack of agreeing on what to do with the money that is. Marriage can work below the poverty line, and above the 1% line. The financial issues of marriage aren't solved with just "more money!"
> I want to be able to support myself, other family members who aren't as well off, and be able to buy my kids (if I have them) a car, pay for their college funds, etc.
Supporting your own family is honorable, but beware when helping out "less fortunate" family members. There are many, many problems that can arise from that if not done properly, and enabling a family member will only make their situation worse, not help them.
> I don't want to be a doctor. Or a lawyer. . . . . who can bank at least a million in one year.
That is a very big dream, but it's not unrealistic. Big dreams are good, and as long as you can approach them level headed they help give you focus. I say that your dream is worthwhile, and although I caution against greed as it can destroy you and your life, there is nothing wrong with wanting to be a CEO making $1,000,000.
ANSWER TO YOUR QUESTIONS
> So tell me. Where do I start investing and also building my way up to becoming the CEO of a company?
You start right where you are. There is nothing stopping you from pursuing your dream now. Begin with learning. Learn what it takes to be a CEO, learn how other CEO's have done it, learn what your talents are. There will be much learning for you starting out.
I recommend the internet and a library card. Read a CEO's biography (it's as close as you'll come to getting to interview some CEO's). How is it that Donald Trump was able to go from rags to riches twice?! What would it take for you to do that? Learn all there is to learn about running a business, being a leader, and leading a successful venture.
> At what age?
NOW! Bill gates was already writing software and starting Microsoft at your age (not to say you're behind or anything like that.) There is no age limit on being a CEO, and there is certainly no age limit on learning and working hard.
> What majors in college should I be looking at?
This will be up to you and what you feel you would be good at. Do you want to be a CEO just to be a CEO, perhaps some business major then? Learn from other CEO's stories and what they majored in.
> And at what colleges?
Personally there is little impact based on what school you choose. There are CEO's that never went to college, and there are CEO's that went to Yale/Princeton.
The fact is it takes maybe $200 to start an LLC and call yourself a CEO, no college degree needed. What comes after that is actually making the money! In order to do that you have to provide a good or service that people want. The more people you make happy, the more money you'll get.
Something you should know now is that starting a company, and running a company is HARD WORK. I know some owners of start-ups that had to work 60 - 90 hours a week with little to no sleep to build their business. I know others who fell into the CEO position because their daddy owned the company, and they were lazy, and thanks to their lack of action the company collapsed.
> And of course, looking to do this in a legal way.
Welcome to America :), where hard work, sacrifice and the willingness to learn and strive can and do payoff.
One last piece of advice: Don't be a jerk. When you become the CEO of a company and you are making the millions, when you someday are the hotshot, don't look down on those around you. Remember where you came from, and those that helped you along the way, and there will be those that will help you!
People will always respond better to someone who is nice than someone who is a jerk.
Here is some recommended reading once you get that library card:
There are many more books, but that's a start.
Jon Acuff went from amateur blogger to best selling author, and is a great motivational writer. His books make me want to run a marathon, and are good for motivating you.
Dave Ramsey went from bankruptcy to running a 300 person business and earning in the %1 of earners in the nation with a national brand. His book is about being a leader in business and you'll need to lead if you want to be CEO. It's a hard job, and not nearly as cushy as you might think.
Thomas Stanley is a researcher who studies those with a net worth over $1M and his book will show you that being rich doesn't contradict with a frugal lifestyle.
The others and highly recommended in general!
The fact is you'll need to grow up, turn off the TV, and look weird to your friends. How many 15 yr olds do you know reading books about how to run a company and studying up on what it takes to be a CEO, or how to start a business? I don't know many, but I do know that at 17 years old William Gates III started a joint venture with Paul Allen (their first business). They both went on to make the top 20 richest billionaires list. Bill still holds the top spot.
If you want to be rich, you want to be a CEO, then work at it. Work at it now, work at it often, and work at it always. I have no doubt if you dedicate yourself you can do it. The fact of the matter is that most people reading this are tired just thinking of the work it takes to be CEO, and that's why they never will be.
Best of luck on your future success, and don't forget the little people.
~ Dragon J.
Edited for formatting.
> OP needs to seek out a trained financial adviser.
Don't. Financial advisers are mostly just salesmen, and most sell shitty products with high fees. It's impossible to navigate which ones are good and which ones aren't unless you know finance yourself, in which case, you will no longer need a financial adviser and can invest yourself for the lowest fees (use Vanguard for the lowest fees).
It's really not all that complicated to invest if you play the game of diversification and just try to get the average market return. Trying to beat the market is another game (a game which we who are interested in bitcoin are playing) and takes another level of sophistication.
Just read these two books and you'll know all you need to know to invest your own money well for the lowest fees. That is if you're playing the simple diversify-and-get-average-market-return game.
The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between
A Random Walk down Wall Street: The Time-tested Strategy for Successful Investing
This list should give you a good start.
“Day Trading with Short-term Price Patterns and Opening Range Breakout” by Tony Crabel
Trader Vic: Methods of a Wall Street Master
You should probably read most of the books in this link.
Evidence Based Technical Analysis
And for the masochists, Reading Price Charts Bar by Bar
A few posters in here are saying its not worth it considering the "hidden costs" and they reference taxes, repairs and maintenance. The fact that they consider Taxes and mainenance as hidden should give you a sense of the type of investor they are and why they think it isn't worth. I mean seriously? if there is one thing certain in life it's Taxes and Death but people here are calling these costs hidden?
my advice is to grab this book from amazon. It will seriously take you a half hour to read and help you get an understanding of the costs at a high level, and don't listen to anyone who would consider Taxes a hidden cost, or even maintenance. Who buys a home and assumes it will have zero maintenance?
http://www.amazon.com/gp/product/0981893562/ref=oh_aui_detailpage_o02_s00?ie=UTF8&psc=1
Is it worth the effort to invest in factors? The answer is "probaby yes" if your end goal is to increase your average returns over a 20-30 year time period and are willing to introduce a small amount of additional complexity. I highly recommend Berkin & Swedroe's "Your Complete Guide to Factor Investing" if you want to evaluate the evidence for a factor-based approach.
Based on your question, Ben Felix's paper "Factor Investing With ETFs" is where I would start if you haven't checked it out already. It provides a good, quick summary of the benefits of factor investing and a Couch Potato-style model portfolio with couple of added factor ETFs. The downside is that these funds are US-based, which means you have to convert to US dollars through your brokerage (they usually charge a 2% fee) or do a fancier maneuver called "Norbert's Gambit". I personally found it worthwhile to learn how to do Norbert's Gambit because once you do it once, you can do it as often as you'd like in the future.... and you'll save yourself lots in fees, too!
If you don't want to convert currencies, then Vanguard's Canadian-listed factor funds like VMO or VVL might work for you. Blackrock also has multifactor ETFs like XFC, XFS, and XFI that may work. Personally, I prefer US-listed ETFs like the ones listed in Ben's paper because they have a longer history and are cheaper to hold.
Based on your questions and lack of knowledge, keep your money in a savings account. Spend a couple of months learning about investing, how to read financial reports, how to decipher an 8k and 10k report. I don't mean this to be condescending, but if you start investing now or in six months, there will be almost no difference in your earnings, but there could be a huge difference in your losses unless you take some time to learn about the various investing methods, theories, and the actual hows and whys.
Start reading Peter Lynch's One Up on Wall Street, Beating the Street and Learn to Earn.
Each brings different things to the table. Again, please take no offense, but Learn to Earn is probably where you should start. It's aimed at teens/young adults learning about investing for the first time.
I'd recommend hitting up the library for these. When you get to the library, you'll find shelves of books on how to invest. Some are useless and others really good. Read a few chapters in each. If you have questions, run it by this board. There are plenty of people here who are more than happy to share their mainly educated opinions. And the good thing about reddit is that if one of us says something wrong, others are quick to correct or offer their two cents.
I'd also recommend The Millionaire Next Door, The Black Swan and the Richest Man in Babylon. while these last ones aren't how to invest, they are books about why and how we invest.
I'm a Taleb groupie and read everything by the man. I loved Black Swan, and also loved Antifragile: Things That Gain from Disorderso you may want to try that one when your reading pile dwindles.
Keep saving, but take your time investing. Learn the basics, stick your toe in and then take the plunge.
> What are the other allocations aside from CCP that are often recommended?
For passive investing, the CPM Model ETF Portfolios. For something more active, probably factor investing. Larry Swedroe has written a great book on this, which you can find on the Library Genesis. The main problem with this approach though is a lack of Canadian ETFs which capture the factor premiums effectively, so you have to do your own research here.
> Also here is WS allocations. What do you think of the assets below? Should I copy it at Questrade?
Seems solid to me. Captures all the main asset classes - US, Canada, International Developed, Emerging Markets, and Fixed-Income. Don't see the point of 5.5% in cash though. Also, this will be harder to rebalance on Questrade (I assume WS does the rebalancing for you?) as you pay a fee of at least $4.95 for selling ETFs. To help with that, consider going with 5 ETFs - one for each of Canadian aggregate bond index, Canadian equities, US equities, International developed equities, and emerging market equities.
Another option would be to use WS Trade, as they charge no commission for buying/selling stocks/ETFs. But if you want to hold US-listed ETFs, they do charge a currency exchange fee, which you can avoid on Questrade using something called "Norbert's Gambit". Holding US-listed ETFs is best in an RRSP though (which WS Trade currently does not let you open), as you avoid the 15% withholding tax on dividends imposed by the US government. But I still think WS Trade is the best option for TFSA accounts.
> You are unlikely to happen upon an investment strategy by sheer luck as effective as those your advisor would use EVERY DAY.
That's why professionals beat the odds. Oh, that's right. They don't. They frequently lose to dart boards. That's because no one (except Buffett, apparently) can actually beat the market.
What on earth could a financial advisor do with $200K that she couldn't do herself for cheaper? If she sticks it into the S&P500 and leaves it, she's going to beat 95% of the professionals out there. What is an advisor going to do for her, other than charge fees to do what she can do at Vanguard.com for free?
Edit: OP, here are some books to read: 1, 2
Online courses are really hit or miss. Most college courses on "business" don't really teach how to start or run a small business. They either teach big business... how to work in a large corporation... or how to create a startup. Both of those are markedly different from starting and running a small business (even an online one).
There are some great books about starting and running a small business, though. Here are a few of my favorites:
Financial Intelligence for Entrepreneurs
This is an excellent book on business finances for the non-accounting types. I took accounting classes in college but never really got what all the financial reports really meant to my business' health. This will teach you what's important in the reports, what you should look out for, and how to read them. This is critically important for a small business owner to understand, even if you plan to hire a bookkeeper and accountant.
The E-myth Revisited by Michael Gerber
Awesome book about building systems in your business to really grow it to the point where it's not just a job for the owner. It's easy to read and probably one of the top 5 business books of all time.
Entreleadership by Dave Ramsey
This is a good book and covers several different aspects of entrepreneurship from hiring and managing employees to marketing, setting the vision, etc. It's hokey at times, but is a good read.
The 7 Habits of Highly Successful People by Stephen Covey
Not necessarily a "small business" book, but easily my top #1 book recommendation of all time. It's hugely applicable to any professional, or anyone really. I re-read this book every couple of years and still get more out of it after almost 20 years.
Getting Things Done by David Allen
THE productivity book. Even if you only absorb and implement 25% of the strategies in this book it will make a huge difference in your level of productivity. It's really the game-changing productivity system. This is one of the biggest problems with small business owners - too much to do and no organization. Great read.
I've been sponsoring a child in (Nepal, India, Peru, Equador as each child grew up at some point) at Save The Children. You learn a lot from the children's/site leader's letters about different cultures and makes it less of a faceless exercise.
I read Andrew Tobias's book, Only Investment Guide You'll Ever Need's chapter on Charity in college and it made me decide right then to make charity a part of my investment plan. I have to say it is something I am proud to have done for every 30 years through good times and bad.
Two excellent titles on the subject are Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition by Natenberg and Options, Futures, and Other Derivatives (10th Edition) by Hull.
The former is lighter, more entertaining read that is easier on math and touches on applied trading. The latter is a more thorough, academic title.
A number of other helpful resources are available. The Ally Invest Options Playbook provides a handy reference for various option strategies. The Interactive Brokers Probability Lab (free version linked at the bottom of the page) provides a modeling tool to visually explore option strategies by modifying expectations of volatility and price. CBOE offers a complete course on the subject. Finally, Tastytrade offers a long running set of shows, tutorials and discussions covering many aspects of options and option trading.
The 1 comment per hour rule is here
You know whats next
In other news i could really recommend this book , the title is a bit sensationalistic but really good history of algo and electronic trading https://www.amazon.com/Dark-Pools-Machine-Traders-Rigging/dp/0307887189
Most people, including experts, underperform the market average when they try stock picking themselves. That's why people buy the average by investing in index funds.
Vanguard might honestly be a better place to start unless you also want a range of other products like a checking account (with checks and bill paying), CDs (certificates of deposit, a type of savings account), currency trading, etc. Schwab is probably a better "full service" bank/brokerage, though.
If you don't have a lot of money to start with, and this is for long-term investing, I recommend starting with 1-3 conservative mutual funds or ETFs, and resist the temptation to try to do individaul stocks. The "three fund portfolio" is a very solid technique. This book is a great introduction to sensible investing, which explains why this is a good strategy.
Basically, index funds and ETFs let you hedge your stock market bets by pooling your money in a big basket of stocks. The S&P 500 (e.g. VOO or SPY ETFs) are up more than 22% this year. That's hard to beat for individual stocks. It's possible to get lucky, but over time, you're likely to do worse than the stock market.
Look into Scott Patterson's - Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market.
It talks about the abuses of the make or take system in stock exchanges.
Try Fail-Safe Investing by Harry Browne, gives you all the main parts of a safe portfolio. Where to stick your money and most of it will be safe in any economic situation.
Risk parity with leverage makes a lot of sense- that's exactly what I do with my portfolio.
IB's margin rates are quite cheap, but that's mostly just because other retail brokers are stupid expensive. Have you considered using futures? That effectively gives you leverage at a very competitive rate (way cheaper than even IB margin). Note that taxation is different with futures ("Section 1256").
Consider that leverage can be very dangerous:
All of these arguments suggest keeping your use of leverage very light. The penalty in future wealth of using too little leverage is far less than for using too much leverage.
What you're suggesting could be viable, but you're straying far off the well-trodden path. You need to do tons of research on topics like how futures work, applying the Kelly criterion to investing, fat tails, negative skew, All-Weather and its All-Seasons cousin, balanced portfolios, life-cycle investing, etc. etc. before even thinking about this.
I think that was talking about the Invest Like a Pro book he self published on Amazon. The YNAB book was published by Harper Collins so unless he’s got some really crazy deal with them, he can’t just send it to people as a PDF. He’s the author, but it’s not his property anymore.
Hey, we graduated at the same time! As long as you keep paying extra towards your high-interest loans first, you will pay them off quickly. One thing that will allow you to pay off your loans even faster is to change your repayment plan to 25 years instead of the standard 10.
This sounds counterproductive, but what this will do is dramatically reduce your minimum monthly payment. I did this and my monthly payment went from $500 to $260. However, I still pay the full $500 (plus some). Now, I am able to force $240 of the original $500
minimum payment to my loans with the highest interest rates.
This only works on federal loans because the interest rate will not change. Call your loan servicer and ask about a 25 year FIXED repayment plan. They will try to get you on an income-driven repayment plan, but don't do this as your payments will change as your income does. You want the 25-year fixed payment. I had a friend that tried this, but for some reason, his loan servicer would not let him do it. I think that your income and debt balance have some influence on whether or not you can get on the 25-year plan.
Another thing that you can do to retain more of your income is to rework your car insurance. You are on the right track by not paying it monthly. This saves you some premium as you pay for it all at once. To get the cheapest rates, you should buy a policy that lasts a full year (not 6 months because your rates can increase 2 times per year as opposed to 1). You should also get a $1,000 deductible. Most people have $500 deductibles. If you get a $1,000 deductible, you get put in a lower risk pool and will have a lower premium to pay. Just be sure that your emergency fund could take a $1,000 hit instead of a $500 one if you get in a wreck. Make sure that you also have good coverage like 100/300. Don't ever get the state minimums as this is not enough coverage and you will get sued to cover everything your insurance fails to pay if you are in an accident.
Another thing that you should do is read these 3 books. It sounds like your debt is under control and you are already familiar with Dave Ramsey (you are ignoring his snowball method for the much much much much much better avalanche method). So your debt is under control and will be paid off in a few years. What happens then? You should read these three books now, so you can set up your future today:
"The index card" by Harold Pollack.
This book tells you everything you need to know about personal finance. It is very simple and you will be ahead of the curve if you read this.
https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528/ref=sr_1_2?ie=UTF8&qid=1536937178&sr=8-2&keywords=the+index+card
The second book you should read is "Unshakeable" by Tony Robbins. This book covers some of the same stuff in "the index card", but it goes into more depth about how to invest in index funds for taxable accounts, 401k, Roths, and other IRAs. This book can show you how to minimize your fees and help keep your risks manageable. It is a great book for learning how to invest for the long haul (it's not a get rich quick scheme).
Honestly, depending on what your interest rates are on your student loans, you should probably start investing some of your money rather than just paying off loans. Sure it will take you longer to pay off loans, but why pay off a loan today that has a 2-3% interest rate when you could buy into an index fund that will pay you 10% on average? I would aggressively pay down the high-interest stuff (anything above 4%) as fast as possible. Once that is paid off, I would shift some of the money to invest. I would still pay more than the minimum on the remaining loans. Doing this will allow you to take advantage of compounding interest and your net worth will be higher when your loans are paid off. This is where you should stop listening to Dave Ramsey. Ramsey's goal is to get you out of debt as quick as possible. His goal is not to increase your net worth as much as possible. Once you get all your student loans above 4% paid off, your student debt is manageable and will be close to the traditional inflation rate. As long as you keep paying the current minimums, it will be gone by 2025 (sooner if you pay a little extra). But your net worth could be significantly higher if you take a few hundred dollars a month and invest it.
https://www.amazon.com/Unshakeable-Your-Financial-Freedom-Playbook/dp/1501164589/ref=sr_1_2?s=books&ie=UTF8&qid=1536937326&sr=1-2&keywords=unshakeable+tony+robbins
The third book you should read is "Your money or your life" by Vicki robbin. This book is crazy and has a cult-like following on places like the financial independence subreddit. This book shows you how to become financially independent. It has a foundation based on the mindset that "if you always want more, you will never have enough." This book shows you how to make a plan to retire as soon as humanly possible based upon your age, income, and fixed expenses. I have read it and adopted many of the concepts. I don't necessarily plan on retiring early, but I will be secure and able to retire if shit hits the fan, the option will be up to me and not my employer.
https://www.amazon.com/Your-Money-Life-Transforming-Relationship/dp/0143115766/ref=sr_1_1?s=books&ie=UTF8&qid=1536937840&sr=1-1&keywords=your+money+or+your+life+2018+edition
I hope this helps. Good luck!
So, I'm a bit over 40 and lived a lucky and sheltered life so far -- nothing compared to what you've been through.
However roughly speaking, we're financially at the same point: a year in FI, business owner and a family. Two years ago, I made a dumb mistake investing in a startup, and decided I want to know how to do this better.
I took the plunge and looked into investing. I read J.L. Collins stocks series but felt it was too risky for me. Then I bumped into The Permanent Portfolio, which is a very conservative, much less volatile way of investing. It suits me much better. Last year I started with 10k, and since January, I add about 2-3k every month.
It's my observation that to start investing, you need to find out what kind of risk you want to take, and how much time you want to put into it. 100% stocks is not for me, and I'm a fire-and-forget guy, I don't like to spend time analysing and agonising over decisions.
Find out what feels good to you (in the sense of: how much volatility), and start with a small amount. Add every month a bit more.
My starting point might not be yours, but I started by studying the various portfolios here: https://portfoliocharts.com/portfolios/
and understanding the charts and numbers. If I didn't understand, I looked it up or asked around in real life or here on Reddit.
For me, it took me a number of frustrating weeks. It felt like grasping for straws, and trying to make sense with very limited understanding. But now I never think about it, and just invest.
Much of the below text is based on personal opinion and reading many articles and books such as "Ivy League Portfolio" (http://www.amazon.com/The-Ivy-Portfolio-Endowments-Markets/dp/1118008855). I lack sources for majority of the comments below, so feel free to call my bluff just know that I know I have read everything below in multiple locations.
Stocks are more risky than bonds over a short duration, however they have a higher expected return over a long duration. A "balanced" portfolio will include both stocks and bonds to be able to both decrease volatility (ups and downs) but also so that you can rebalance between the 2 and sell stocks to buy bonds when stocks are high and bonds are low or the opposite.
Within stocks there are different things you can hold. One example if REIT, another (this is maybe not actually within stocks but it is not within bonds) is commodities. Or, you can focus on the size, small cap versus large cap. So you can hold all of the equity or you can hold (domestic: small cap, large cap, REIT, commodity, bonds), (international: small cap, large cap, REIT, bonds). You can also add in actively managed mutual funds as those also can act as diversification.
Now, most people will simply suggest a 3-fund portfolio (domestic equity, domestic bonds, international stock). Some research such as displayed within "Ivy League Portfolio" suggests a 5-fund portfolio (domestic equity, domestic REIT, domestic bonds, commodities, international stocks) and holding those 5 gives better volatility control as well as better gains from re-balancing. Other people are quite lazy and simply invest 100% U.S.A. equity such as S&P 500 index. To make matters worse, there have been studies which suggest that re-balancing actually provides no benefits other than decreased volatility.
So, let me try a different track. https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations According to Vanguard, historically speaking, having the ability to re-balance between stocks and bonds has provided worse return than 100% stock. The only historic benefit of being able to re-balance between domestic stock and domestic bonds is significantly reduced volatility. Now, you are asking whether or not you should add more complexity to your portfolio. More complexity means that you need to pay slightly more attention to your asset allocations, more work involved with re-balancing, if this is a taxable account more paperwork due to dividends even without re-balancing, and potentially slightly worse return. Worse return specifically is due to historically speaking real estate has had slightly lower return than the U.S. stock market as a whole.
If you are most concerned with trying to decrease volatility and the actual return is secondary then fine, add a REIT fund. If you are more concerned about long-term growth and prefer to be more hands-off and passive then just go with the U.S. equity fund.
On What to Read
Here are some suggestions on books and websites:
The Millionaire Next Door by Stanley and Danko - https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474
If You Can by William Bernstein - http://efficientfrontier.com/ef/0adhoc/2books.htm
Free version is here - https://www.dropbox.com/s/5tj8480ji58j00f/If%20You%20Can.pdf?dl=0
The Investor's Manifesto. Preparing for Prosperity, Armageddon, and Everything in Between by William Bernstein - https://www.amazon.com/Investors-Manifesto-Prosperity-Armageddon-Everything/dp/1118073762
The Bogleheads Guide to Investing - https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283
The Coffeehouse Investor - https://www.amazon.com/Coffeehouse-Investor-Wealth-Ignore-Street/dp/0976585707
The Bogleheads' Guide to Retirement Planning - https://www.amazon.com/Bogleheads-Guide-Retirement-Planning/dp/0470455578
The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William Bernstein - https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071747052/
Total Money Makeover by Dave Ramsey - https://www.amazon.com/Total-Money-Makeover-Classic-Financial/dp/1595555277
Personal Finance for Dummies by Eric Tyson - https://www.amazon.com/Personal-Finance-Dummies-Eric-Tyson/dp/1118117859
Investing for Dummies by Eric Tyson - https://www.amazon.com/Investing-Dummies-Eric-Tyson/dp/1119320690/
The Millionaire Real Estate Investor per red-sfplus’s post (can confirm this is excellent) - https://www.amazon.com/Millionaire-Real-Estate-Investor/dp/0071446370/
For all the M.Ds on here and HNW individuals, you might want to check out https://www.whitecoatinvestor.com/ and his blog – found it to be very useful.
https://www.irs.gov/ or your government’s tax page. If you’ve been reading, you know that millionaires know more than your average bear about the tax code.
https://www.reddit.com/r/TheRedPill/comments/7vohb3/money/
https://www.reddit.com/r/TheRedPill/comments/3hzcvn/financial_advice_from_a_financier/
https://www.artofmanliness.com/2017/09/22/4-money-tips-4-personal-finance-legends/
Personal Finance Flowchart from their wiki - https://i.imgur.com/lSoUQr2.png
Additional Lists of Books:
https://www.bogleheads.org/wiki/Books:_recommendations_and_reviews
https://www.whitecoatinvestor.com/books-4/
Subreddits
https://www.reddit.com/r/investing/
https://www.reddit.com/r/personalfinance/ - I would highly encourage you to spend a half hour browsing their wiki - https://www.reddit.com/r/personalfinance/wiki/index and investing advice - https://www.reddit.com/r/personalfinance/wiki/investing
https://www.reddit.com/r/financialindependence/
https://www.reddit.com/r/SecurityAnalysis/
https://www.reddit.com/r/finance/
https://www.reddit.com/r/portfolios/
https://www.reddit.com/r/Bogleheads/
MRP References
https://www.reddit.com/r/marriedredpill/comments/40whjy/finally_talked_to_my_wife_about_our_finances_it/
https://www.reddit.com/r/marriedredpill/comments/67nxdu/finances_with_a_sahm/
https://www.reddit.com/r/marriedredpill/comments/488pa0/60_dod_week_6_finances/ (original)
https://www.reddit.com/r/marriedredpill/comments/6a6712/60_dod_week_6_finances/ (year 2)
https://www.reddit.com/r/marriedredpill/comments/3xw015/how_to_prepare_for_a_talk_about_finances/
https://www.reddit.com/r/marriedredpill/comments/30z704/taking_back_the_finances/
https://www.reddit.com/r/marriedredpill/comments/2uzukg/married_redpill_finances_and_money/
https://www.reddit.com/r/marriedredpill/comments/3637q5/some_thoughts_on_mrp_and_finances/
https://www.reddit.com/r/askMRP/comments/8dwaqt/best_practices_for_finances_within_marriage/
https://www.reddit.com/r/marriedredpill/comments/588e5o/gain_control_of_the_treasury/
Final Thoughts
There are already a lot of high net worth individuals on these subs (if you don’t believe me, look at the OYS for the past few months). This should be a review for most folks. The key points stay the same – have a plan, get out of the hole you are in, have a budget, do the right moves for wealth accumulation. Lead your family in your finances. Own it.
What are YOU doing to own your finances? Give some examples below.
I suggest reading this. It's a good introduction to the subject:
https://www.amazon.com/gp/product/0981893562/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1
Let me start off by saying your comment made my day, thank you. Also, if I could give some encouragement, it'd be that understanding market sentiment for commodities isn't something that comes naturally to anyone. I spend a lot of time online at night researching - kind of became a hobby. I'd highly recommend getting a Seeking Alpha account and putting gold ETFs on your watchlist to get articles on gold. Read anything that's written by Avi. I've learned an immense amount from him. (I also like Taylor Dart.) What you just said about 'the economy doing great so gold would do bad' is a pretty common mistake. Don't take any "truths" on gold as a certainty. Sometimes it moves inverse the SP500, sometimes it moves inverse the dollar, but not always. It's not a hedge. It crashed alongside the SPX during 2008. It's pretty correlated with the Yen and inflation expectations, but knowing that won't really help you in the long run. Fundamental analysis will only get you so far. People will use news to explain price action after the fact, never before - because it doesn't work.
"Gold moved $10 today because Trump tweeted something mean about China." BS... there's always news going on. You can know everything about global economies and still not be a successful gold trader. But basic technical analysis and market sentiment will get you pretty far. I look at the CFTC report (https://www.investing.com/economic-calendar/cftc-gold-speculative-positions-1618) for a reference on how people are positioned. See how in August gold was at one of the highest net long positions ever? Red flag.
As for technical analysis, I watch plenty of YouTube chartists. If you want to think like a technician, you have to listen to them. Lastly, I love this book (https://www.amazon.com/Charting-Technical-Analysis-Fred-Mcallen/dp/1456468693/ref=sr_1_3?ie=UTF8&qid=1483683042&sr=8-3&keywords=technical+analysis+of+the+financial+markets) too. It's not dry at all, and was a great starting point. Happy trading.
I started with this book and it's helped a lot--> https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528/ref=sr_1_1?keywords=personal+finance+index+card&qid=1565197060&s=gateway&sr=8-1
It simplifies everything for you. Made me realize I don't need an FA, but if you do need one there are resources in the book to help make sure you choose someone who will actually help you and act in your financial interests. Not all financial advisers do that, nor are they required to.
Also I saw one of your other comments about the house issue -- if you're not making much right now not sure how you would expect to pay off a house that quickly unless I'm misunderstanding your question. Also for side income, a house isn't really a sure thing except in certain circumstances. A huge portion of your investments would become tied up in one asset that could flood, get damaged in a hurricane, etc. Nothing wrong with buying a house for yourselves to live in if that's what you want and can afford it, but sounds like you're getting way ahead of yourself with the decision to buy a house as an investment.
The reason why the Fama-French 3 factor and Carhart 4 factor are so prevalent is because people generally agree on these factors. Without going into history too much, the number of factors have grown over time from CAPM (1 factor) to Fama French (3 factor), to Carhart (4 factor). There are even more, but at some point, it starts looking like a "factor zoo".
After the success of Fama-French, and quantitative investment firms that use the approach like DFA and AQR, almost every finance program teaches this type of approach. This has influenced a lot of finance students, who themselves started to look for new factors. Some of the new studies try to find further nuances in existing factors, while others go off all new tangents, a fun one that comes to mind is a paper that tries to create a factor out of moon cycles.
We have so many factors now that academics are writing meta-papers describing the problem of there being too many factors to choose from.
If you want a nice summary of some pretty widely accepted factors, I would recommend a very accessible book called Your Complete Guide to Factor-Based Investing
Just pointing out possible mistakes in my opinion. Your 1st buy was in a strong bearish trend, highly unrecommended, you should have shorted there or waited for reversal signs to buy. Your second buy was in a classic old-school shooting star candlestick which indicates trend reversal, in this case from up to down, you should've also shorted. Your third buy was after a classic double top reversal, which is almost always a short.
If you're dead serious about learning technical analysis I highly recommend this book.
Good Trades!
I agree you should diversify into foreign ETFs. I think you should also consider other asset classes (commodities and real estate). I wouldn't worry about dividend yield either with your timetable, you want price appreciation more than dividends (plus dividend stocks are overvalued now since people have been piling into those in lieu of bonds). I'd keep VTI or SPY for your US holdings.
Some ETFs for other asset classes (not necessarily these in particular, may be substitutes with better fees, etc.):
GCC for commodity exposure
VEU for broad global equity exposure
RWO - broad diversified global real estate (both US and international)
I wouldn't touch bonds now for anything (way overpriced), but on your 15 yr+ timetable you probably wouldn't want to weight them too heavily anyway.
For your extra ETF I'd vote for ARGT (Argentina) - they're just starting a new bull market.
This is a good read for building a relatively low-maintenance portfolio: http://www.amazon.com/The-Ivy-Portfolio-Endowments-Markets/dp/1118008855
Do your own due diligence of course too. I'm just some guy on reddit. Good luck!
Kinda surprised at no Enterleadership by Dave Ramsey.
Practical advice on how to grow your business, treat people, and manage money.
Dave Ramsey's EntreLeadership sets out to do just that - provide experience based advice for new business owners.
Why not just get the standard options book:
https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X
It actually does use indicators, and those indicators predict trends.
Mathematical models: I have only studied indicators. In the beginning of my project, I tried to create my own indicators using parametric equations, but it wasn't working. I couldn't get the algorithms to produce results better than random backtests. So I moved from that into real indicators.
Books:
The Ultimate Day Trader
It was the most helpful when I was getting started and learning about indicators. It taught me how trading was done, and it introduced the typical algorithmic trading like MACD crossovers, bullish convergence/divergence. It may be too much for beginners. As a warning, reviewers on Amazon don't think highly of the book.
I had to learn a lot on my own through trial and error and the occasional google search, so I The Ultimate Day Trader is the only book that I fully read.
Building Winning Algorithmic Trading Systems
Gives a lot of good information in getting good backtest results, and the steps an algorithm should have to pass in order to be traded with.
Algorithmic trading: Winning strategies and their rationale.
Currently reading this, and it starts off basic, like most books. It talks about look-ahead biases and that sort of stuff. It also talks about the different backtesting software and programming languages. I'm only on page 40/200, and it looks like it gets more complex.
I also have a few books on options, but those don't have to do with algorithmic trading.
I was reading the book Antifragile.
There was a part where the author describes the major shock he had when first introduced into the forex trading pit. He describes the sheer cognitive dissonance watching traders who could barely write their names and appeared to have an education of a high school level trading so much money. He came from quant like style of trading and was expecting sharp traders. The reality was that these traders knew next to nothing about countries and generally not bright. However, these below average intelligence people were making money hand-over-fist in the currency market. It was such an entertaining part of the book to hear how he describe the reality of large traders.
His take away message is, theory and practice are two very different thing. Practitioners are the ones who wins, not the academics with fancy forumlas.
I'm one of those Robinhood users but I can't complain about much it's not a bad way to start learning how to trade and buy stocks. I contribute every payday into my account it's currently around $5,000. Not much but it's decent. For the last two-and-a-half years I've been investing a portion of my paychecks to the stock market I spent about four months losing a lot of money trying to follow all these YouTube gurus advice. I lost about $1,500 trying to do that. Eventually though I decided I should just teach myself the ropes instead of taking somebody else's word for it. I purchased 4 books from Amazon and these books are great they teach you a lot of stuff about the stock market how to value companies and ideas to help you grow your portfolio over time I just wanted to recommend these books if somebody is just starting out it's not that much money it's about $45 worth of investment it has been great for me since reading them. I also have to recommend a YouTuber that I follow quite closely his name is Jeremy and his channel is called financial education. I like his investment style and I try to do very similar things myself.
.https://amzn.to/2mnwnOg The Intelligent Investor by Benjamin Graham
https://amzn.to/2nVmy A Random Walk Down Wall Street by Burton G. Malkiel
https://amzn.to/2nfkfiE Irrational Exuberance by Robert J. Shiller
https://amzn.to/2nn7imH The Bogleheads’ Guide to the 3 Fund Portfolio by Taylor Larimore
The Investor's Manifesto by William Bernstein
>Things people should be actually be angry or interested in:
>1. News/economic releases being released early to traders
>2. Quote stuffing
>3. Exotic, undocumented order types
I've still got about 100 pages to read in [i]Flash Boys[/i] so maybe they'll be discussed later, but so far I'm surprised by the absence of issues 1 & 3.
I'm with you that early access to news is a different animal than latency arbitrage. The potential consequences are greater and the crowd it preys on is larger and more vulnerable. On a lighter note, it reminded me of the Anne Hathaway crash.
Custom/undocumented order-types are also disturbing, though from my understanding they are more of a problem for the HFT players than regular investors. For anyone interested in learning about custom order-types and the implications, check out the work of Haim Bodek, former HFT trader-turned whistleblower. Bodek was also profiled in Scott Patterson's 2012 book Dark Pools. I highly recommend Dark Pools for anyone interested in HFT - it's a great read and similar writing style to Lewis.
I'm blanking on your second issue though, quote stuffing - could you elaborate? Are you referring to order-canceling?
Props for mentioning the Permanent Portfolio, but a) where's the cash?, and b) not enough gold.
There are a lot of very smart investors out there who think that gold still has a long way to go. I can wholeheartedly recommend the Permanent Portfolio to anyone and present it as a very stable portfolio, but on some level I expect the 25% gold to make the difference between rags and riches.
I saw this recommended yesterday.
If you want it as a Kindle book, you can also get it for free here.
It's kind of addictive when you start earning good money. You never want to go down. I just had a great two yr contract end and I'm using the cash generated over the next four months to market myself in a sector I'd love to be working in, next.
Also worth buying a copy of Rich Dad Poor Dad if you've not read it. The author's style annoys me, but his message is spot on. Just don't bother buying any of his other books.
And yes, better to freelance as the pimp than the hooker ;)
this what you mean?
https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X/ref=sr_1_2?s=books&ie=UTF8&qid=1525120533&sr=1-2
Whatever you do, do not sacrifice your own financial security for their sake. Make sure you have your emergency fund set up; do not ever under any circumstances ever ever ever co-sign any loans for them or give them any credit cards under your name ever, on any planet. Ever. See this previous post of mine for just one reason why.
Rich Dad, Poor Dad is a good book for understanding different perspectives on personal finance.
For stubborn parents, I find that a little bit of a guilt trip goes a long way in helping them understand the potential impact of their actions -- i.e., they have no savings for retirement, what do they expect to do when they want to stop working in 5-10 years? Live off of your income? How is that fair to you? You would most likely just be starting a family of your own and trying to save for potential children's educations and your own retirement, do they really want to be an impediment to that?
I would read this book.
Really great advice.
https://www.amazon.com/Permanent-Portfolio-Long-Term-Investment-Strategy/dp/1118288254/ref=mp_s_a_1_1?keywords=permanent+portfolio&qid=1567914372&s=gateway&sprefix=permanent+portfolio&sr=8-1
J Scott wrote one a few years back. "How to Flip Houses" or something like that. TBH though I didn't think that it was that great. A lot of it was either very obvious stuff or directly related to his personal experience in his location.
I like to recommend this book:https://www.amazon.com/Skinny-Real-Estate-Investing-Introduction/dp/0981893562
It's massively simplistic, but at the same time does a great job of introducing the basic concepts and ideas.
https://www.amazon.com/Your-Complete-Guide-Factor-Based-Investing/dp/0692783652/ref=sr_1_1?ie=UTF8&qid=1486570140&sr=8-1&keywords=complete+guide+to+factor+based+investing
Great, so then you're looking at the following:
Emergency Fund: let's round up to $2000
Retirement: $5500
New Car: $10000 (I'm guessing here)
Which leaves you with $6,500 to consider investing. That's what I'd focus on with your financial advisor. Keep in mind, you generally want to look at investing as a long term play (5 years+) so if you ever feel like you'd need to pull that money out, I'd keep it more liquid and maybe beef up your EF some more. If you're comfortable with not tapping into that money, you can look at crazier things like some of the cryptocurrency stuff floating around (higher risk) or real estate (lower risk). Generally a few good investing resources are Wall Street Survivor (they have a bunch of free online courses), Investopedia (awesome resource for learning about finance) and this book (The Index Card - https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528/ref=sr_1_1?ie=UTF8&qid=1498149260&sr=8-1&keywords=the+index+card).
The little book of common sense investing by John C. Bogle
The Bogleheads' Guide to Investing
The Bogleheads' Guide to the Three-Fund Portfolio
The wiki is a great place to start, especially the PRIME DIRECTIVE.
This book is a nice short read that explains things very well.
I like Kevin Davey's book = https://www.amazon.com/Building-Winning-Algorithmic-Trading-Systems/dp/1118778987/ref=sr_1_1?keywords=Kevin+davey&qid=1558288403&s=gateway&sr=8-1
​
Don't really know your level, but what I like about his book is that he is honest and shares an actual trading strategy of his. Lots of good advice in there about the process he follows.
We've all seen those backtests that promise super high compound annual growth, the trick is getting that kind of result on a market that your algo hasn't seen before. Out of sample validation is key.
There's a book by the same name. I thought it was a good read, but I read it out of interest, not so much looking for technical knowledge.
Jesse wrote an investing book: Invest Like a Pro: A 10-Day Investing Course https://www.amazon.com/dp/B00O4G1BBI/ref=cm_sw_r_cp_api_-43-yb75AFCRM
I really like the podcast Death Sex and Money. They have a lot of resources online about beginning to deal with a lot of these issues. For example they just had a two part episode about student loan debt and the different ways people are dealing with them. Here's a link to their back catalog.
I listen to a load of economic and financial podcasts because I find it interesting. There's one book that's been recommended across multiple different ones. Here's an NPR link about the basis for it. It pretty much is that all the best financial advice can fit onto an index card as is pretty simple. Here's the amazon link to the book but you could also probably find it for sale cheap at a used book store or get it from your library.
Best advice I have for small business in general: Dave Ramsey's EntreLeadership
His related material is also excellent.
Harry Browne's must read book on investing.
There's 3 kinds of incomes: A, B, and C income:
C - A job, the worst way to make a living. Working for another man trading dollars for hours. Slogan: "I'll learn to love (tolerate) what I do and live with what it gives me, at least until I save up enough money to strike out on my own."
B - Contracting work, a business you work. Trading dollars for hours still, but you work for yourself and set your own price. Example, creating and selling products or providing a service. Slogan: "I get paid what I'm worth because I work hard, make my own hours and prices"
A - Passive income streams, AKA residual income, a business that runs itself. Acquire a system of assets. Assets vary greatly and are generally built over time. Examples: Owning a rental unit, owning rental boats, owning a storage facility, really anything you can rent out is an asset, owning an online business that generates enough money for you to pay a manager to run it for you, investments in an institution that pays off high-yields, a copyright that leads to royalty payments, Or setting something up so others can make money, and take a small percentage (Facebook & twitter). Slogan: "Key word: Ownership. I've worked hard, sacrificed for the future, and made tough decisions most people don't. So now I don't have to work for money anymore... my money works for me now!"
Some books on how to get to Level A: 'Rich Dad, Poor Dad', 'The Richest Man in Babylon' Good luck out there :)
Rich Dad Poor Dad
This book is a really easy read, but has a lot of great information in it. I read this right after graduating, and it really helped put life, work, money in perspective. After finishing it, I immediately got myself out of debt.
Not sure how this book will help you, but it would definitely be a good start.
Good luck and remember that you are not the only person who has felt like a underachieving 20-something. We all do (or have in my case).
There are roughly 5 components in the practical CAPM model: (i) market risk (ii) value (iii) size (iii) momentum (iv) profitability.
The market risk beta was developed in the 60's and captured around 60% of volatility.
Adding the value beta and size beta - developed by French and Fama - brought the tally up to 90%.
The momentum beta then bumped up volatility capture to 95%.
So... if you have a single factor CAPM - the traditional market risk measure - you are still leaving around 40% of volatility unexplained.
In short: Add factors! Even if (European) CAPM traditionalists frown upon this.
Edit: This is a great book on the topic, and covers all recent academic publications!
This was a pretty good book on the subject. Similar conclusion to OPs.
https://www.amazon.com/Ivy-Portfolio-Invest-Endowments-Markets/dp/1118008855
I'm gonna throw some book titles at you.
The first two will help with the money problems. The third just helps you deal with life and achieving your goals. The last may be the most important because everything in life involves dealing with other people.
Dark Pools is another good book http://www.amazon.com/Dark-Pools-Machine-Traders-Rigging/dp/0307887189
Yep
This has been up for quite some time, but he did just publish it as a book. I went through it all, but I was 17 at the time and not old enough to actually start investing, I learned a lot from the course.
I think I will have to repeat the course and then actually take a leap and start investing.
I was recommended this book since charting/technical analysis is one of the most trustworthy ways of determining what a stock is going to do next. Other than that, I just went out and bought a couple of "investing for beginners" kind of books.
A good brokerage to start with is an app called Robinhood, which is free of brokerage fees (the fees most places charge for buying and selling stock), and they offer a couple of free day trades per week, if that's something you want to do. Very intuitive app that does a lot of what you want it to. Other than that, Google is your best friend, but invest off your own research and start with safe investments like ETFs while you read up.
Wow this is a great list - thanks everybody
I want to recommend a book that absolutely changed my life.
'The only investment guide you'll ever need' by Andrew Tobias. I knew little about finance, and this book, which is maybe a hundred fifty pages long, covers everything you need to know. I read it fifteen years ago in an afternoon and last year I retired early (at 50) as a result of following what he recommended. He writes for the layman and updates it regularly. Wish I'd read it at 18. I know you'll probably ignore this post because finance is boring, but do yourself a favour, check out the reviews on amazon and spend a couple of hours reading it.
http://www.amazon.com/Only-Investment-Guide-Youll-Ever/dp/0156029634
this is a really good read:
https://www.amazon.ca/Permanent-Portfolio-Long-Term-Investment-Strategy/dp/1118288254
at a 4% withdrawal rate having 5ish years of expenses in cash/bonds is not a bad plan
https://www.amazon.com/Charting-Technical-Analysis-Fred-Mcallen/dp/1456468693
Read this book. Go to tradingview.com for free charting. Learn how to trade options (calls and puts). Invest all $1000 into calls on a stock you think will raise OR all $1000 into puts on a stock you think will fall. PROFIT $$$$$
The Investors Manifesto was referred to me by my college PFIN professor. I was able to read it cover to cover, in plain English, and it definitely helped me understand the basics of investing.
You should read building algorithmic trading systems by Kevin Davey
There is tons of information on sizing, risk management, risk of ruin of a strategy and how to automated them
https://www.amazon.com/Building-Winning-Algorithmic-Trading-Systems/dp/1118778987/ref=sr_1_2?crid=2MD5SFTI494L&keywords=kevin+davey&qid=1565714567&s=gateway&sprefix=kevin+da%2Caps%2C217&sr=8-2
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Note: I am not affiliated with Amazon, I don't get commission on the sales :) but it is still a kick a$$ book
It is basically a valid approach but there are a lot of details you have to get precisely right. And you will have significant periods of underperformance.
The book "complete guide to factor based investing" has a good discussion of the magic formula and its limits.
https://www.amazon.com/Your-Complete-Guide-Factor-Based-Investing/dp/0692783652
I would also suggest:
http://www.amazon.com/books/dp/1118073762
Word-for-word the same advice, but as an added bonus goes into some basic math and history to back it up!
I can tell from your perspective that your work experience is limited in the corporate world to one or few companies. I'm 40 and worked in tech startups most of my career before starting a business. When you work in tech startups, the average time you're at a company is a year or two, so I've worked at a lot of places. I also consulted for a couple of years and bounced from company to company. I've worked at plenty of places where the executives all have corporate credit cards and charge meals regularly. I've charged meals at companies I've worked for thousands of times. At several dotcoms I've worked at it was customary to have breakfast provided daily and lunches catered on a regular basis. When my company had offices we provided breakfast each Monday, and did a bbq every Friday, and it's all deducted as business expenses on taxes. None of that appears on anyone's pay stub. Your company may have a policy of billing execs for your corporate cafeteria, but that's not how the rest of the business world works.
I've also worked for companies that have kept permanent corporate apartments. They were regularly used by software engineers that we would fly in from other states or Russia where we had an office. Some were in these apartments for over a year and none were billed for rent. They kept their primary residence and some were flown back regularly. One guy from AZ was going back every weekend.
My mother owned a real estate business. She wrote off part of the house where her office was, and wrote off her car as a business expense. I once worked at a software company where someone in the accounting department sent an email to all asking who had a particular cell number because it was being billed to the company and wasn't on the internal phone list. The phone was being used by the CEO's 75 year old father who didn't work for the company or know how to turn on a computer. Companies can write off plenty of things which benefit executives.
Companies that are pre-IPO can offer shares at much lower rates than what they know it will IPO for in a year or two. There's a flaw in your assumption that a particular executive has a hand in the success of the company when stock prices go up and they profit from ISOs. Sometimes a certain sector becomes the hot stocks and the price goes up. Other times executives offshore jobs, sell off assets and divisions of the company to artificially boost profits and the stocks go up temporarily, but it hurts the company in the long run. Sometimes companies acquire other companies and the stock goes up temporarily, but it hurts the company in the long run. I worked at a company where we begged the CEO not to do an acquisition. The stock went up, he made millions. Six months later, when the competitor was able to sell their stock, they dumped it on the market, and drove the stock into a downward spiral that the company never recovered from. There are thousands of dotcom millionaires that worked at companies which never made a penny in profit and went out of business.
If I want, I can setup a company that is seeking commercial real estate opportunities. Then, I can expense trips to Hawaii, Europe, or anywhere I want to go. The company can operate at a loss for a couple of years, and all of my trips can be deducted as a business expense even if I don't buy any real estate. Then, I can fold up that company, and open one that looks for timeshare opportunities.
The top 1% is not paying 35% federal, 8% state and 3.876% city. They are using these loopholes to pay far less. A lot of stars don't get paid directly from studios, they incorporate themselves so they get to write off everything they can, and pay taxes only on what's left over at the end of the year.
There's a book you should really read called, "Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not!" by Robert T. Kiyosaki. It's only about 200 pages and it's a quick read, not very academic, but full of good business information and a nice story. Here's the amazon link, but it's probably at any bookstore you pass by. http://www.amazon.com/Rich-Dad-Poor-Money-That-Middle/dp/0446677450
Fail-Safe Investing by Harry Browne. Quite possibly the best $11 you'll spend.
The strategy he mentions isn't sexy, but it works. My year-to-date return is 12%; not much, but I'll take it over the S&P 500's -9% over the same period.
Here are two great books to start with:
Personal MBA - https://www.amazon.com/Personal-MBA-Master-Art-Business/dp/1591845572?ie=UTF8&*Version*=1&*entries*=0
Entreleadership - https://www.amazon.com/EntreLeadership-Practical-Business-Wisdom-Trenches/dp/1451617852/ref=sr_1_1?s=books&ie=UTF8&qid=1466870653&sr=1-1&keywords=entreleadership+dave+ramsey
the only investment guide you'll need is one that's floated around (have a copy but haven't gotten around to reading it)
warren buffet's annual letter probably wouldn't hurt either
Alternatively, one could just read https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528 , and avoid Dave's notoriously bad investment advice (and hopefully his Reddit cult as well!).
I paid the fee and took the insurance class. It was worth the fee to get the class, even though I never sold a nickel of insurance and walked away from them soon after. Their products are expensive and overpriced. I basically decided that I couldn't sell something I wouldn't buy. They had some really crappy biweekly mortgages too.
Read this: http://www.amazon.com/Only-Investment-Guide-Youll-Ever/dp/0156029634 It's not the be-all end-all (and the author is somewhat embarrassed about the title, but his publisher came up with it), but it is a good start. Also read the Millionaire Next Door.
Then go to a low cost broker (tiaa cref, vanguard, schwab), and start a Roth IRA, throw some money into a 401K. If you are married get some term life insurance. Stay out of debt, and save up some money to buy cars with cash and a down payment on a house.
Wealthy parents teach their kids to work not to survive or have a comfortable retirement, but rather, to produce or acquire income-producing assets. The income produced by assets -- such as real estate or businesses -- are how the wealthy get wealthier. Eventually you don't have to work at all and you get richer while you sleep because the assets are doing all the "work." In theory, anybody with just a small amount of regular discretionary income could do this, but most people aren't taught to. Instead, they're taught to sink all of their money into a home and retirement savings. Inter-generational transfer of wealth (e.g., inheritance, "trust fund kids," down payment on home as a wedding gift, etc) gets all the attention and criticism as "unfair," -- but really it's the transfer of the knowledge about HOW to create wealth that is the real treasure handed down from one generation to the next, and the real reason for the perpetuation and resilience of the class system.
Edit: For more, read Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not by Robert Kiyosaki.
It's a misleading title: http://www.amazon.com/Only-Investment-Guide-Youll-Ever/dp/0156029634/ref=sr_1_1?ie=UTF8&s=books&qid=1266369902&sr=8-1
However, it covers a lot of topics, is only $10, and is easy reading.
Let's try:
https://www.amazon.com/Invest-Like-Pro-10-Day-Investing-ebook/dp/B00O4G1BBI
and yes, it is about investing more than about using YNAB to track investments.
https://www.amazon.com/Truth-About-Money-4th-ebook/dp/B004EBT7I2/ref=sr_1_1?ie=UTF8&qid=1495183064&sr=8-1&keywords=The+truth+about+money
https://www.amazon.com/Intelligent-Investor-Definitive-Investing-Essentials/dp/0060555661/ref=sr_1_1?ie=UTF8&qid=1495183176&sr=8-1&keywords=the+intelligent+investor
https://www.amazon.com/Fail-Safe-Investing-Lifelong-Financial-Security/dp/031226321X/ref=asap_bc?ie=UTF8
Thanks.
This book seems to have lots of information on why this portfolio is beneficial. Am still reading it.
http://www.amazon.com/The-Permanent-Portfolio-Long-Term-Investment/dp/1118288254
It mentions exactly what you have stated. It also compares it with the 60/40 portfolio.
The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk https://www.amazon.com/dp/1119487331
While we're making book recommendations, you should try this, this, or this. Or maybe these, or this, or hell, this if my summary of the current situation of the state as universal malefactor and the alternatives as looking better every day are unconvincing to you.
As for some misguided belief that the people will "rise up" in some faux revolution with onward marching and people's councils and all that kind of jazz; not at all, generally speaking, people are stupid. For example those that think that it's a paranoid fantasy the state operates in its own interests first despite the cacophony of evidence supporting this fact all over the world and the simple fact that it has always been so. But people also don't like being fucked over, and they're not stupid enough that they won't take whatever actions are necessary to directly counteract being fucked over as those actions become clearer and easier for them to take.
Tobias Carlisle written a bunch of books and runs a fund (ZIG) based on his multiple. He might be a good place to start on long/short value investing. You weren't exactly clear on what sort of long/short you were looking for.
I leaned a lot years ago from an early edition of: https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X
That book is very mathy but if you want to learn how to think about splitting investments into pieces of risk this is the place.
A similar book https://www.amazon.com/gp/product/0471786322 gets excellent reviews
I day trade for a living.
I follow price action trading principles best espoused in this book
Warning: This book is hard to read, but worth every penny.
http://www.amazon.com/Charting-Technical-Analysis-Fred-Mcallen/dp/1456468693/ref=pd_sim_14_1?ie=UTF8&dpID=413yX1E7rvL&dpSrc=sims&preST=_AC_UL160_SR107%2C160_&refRID=0QWDYQZ8CB2FYA9V4KSX
You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits By Joel Greenblatt There are a lot of great suggestions on this board. This book gives a lot of great common sense advice for special situations investing. Also, The Ivy Portfolio by Mebane Faber is a good read.
How about these books? have you heard anything about them?
http://www.amazon.com/Trading-Systems-Methods-Website-Wiley/dp/1118043561/ref=pd_bxgy_14_img_2?ie=UTF8&refRID=1X0Y2BRSS0H1EWVB5HKC
http://www.amazon.com/Building-Winning-Algorithmic-Trading-Systems/dp/1118778987/ref=pd_sim_14_1?ie=UTF8&dpID=51eM1r6mrRL&dpSrc=sims&preST=_AC_UL160_SR127%2C160_&refRID=0HJDDFQYBW3A4V6WGXXX
Hace 2 dias nomás me bajé y empecé a leer un libro de intro al charting y al TA. Bajé y ojeé otros, pero hasta ahora éste me resultó el más claro.
El tema de acciones, bonos, forex y demás me gusta. Pero por alguna razón el tema crypto me atrae aún más.
Ahora me pregunto seriamente si no me conviene mandar programación a la mierda, porque vengo sufriendo desde hace rato como un condenado para dar siquiera con entrevistas para puestos de trainee/jr... que por supuesto después terminan en la nada.
La verdad me gustaría dedicarme más de lleno a esto y ganar plata en serio. :)
(perdón por los edits)
Yes, there are unique risks to gold like there are to any asset class, and for bullion in particular it is physical theft. If you own property, having it secretly placed in a fireproof safe somewhere within your house is one way, as is storing another portion of it in a safety deposit box or two. If you have significant holdings, you can also investigate allocated storage( https://www.bullionvault.com/gold-guide/allocated-gold ), either domestic or overseas. There is also the possibility of insuring it directly, but maybe an umbrella policy could cover it. One of the anxieties of this holding is minimizing overhead.
This book has good info: https://www.amazon.com/Permanent-Portfolio-Long-Term-Investment-Strategy/dp/1118288254/
As does this forum (early topics in particular): https://www.gyroscopicinvesting.com/forum/index.php
try [this one] (http://www.amazon.com/books/dp/1118073762)
The cover and title are a little over the top but once you get inside its full of good, solid, fairly conservative advice. Lots of really good explanations of investment principles that you don't need to be a math wiz to understand. (although, if you are a numbers person he has enough depth in the footnotes to keep it interesting)
So I guess we're talking about this book?
http://www.amazon.com/EntreLeadership-Practical-Business-Wisdom-Trenches/dp/1451617852
It's hard to say. Is this an ongoing theme throughout the book? My guess is yes, since the author, Dave Ramsey, works for Fox and his Wiki page says: "His books and broadcasts often feature a Christian perspective that reflects Ramsey's religious beliefs."
It's $8 on Amazon, that's probably a worthwhile investment to begin with
that was the book i started with. I read that and Stock Market 101. The second book I read was Charting. Now I'm reading The Intelligent investor and a couple Day Trading books
The Skinny on Real Estate Investing
https://www.amazon.com/gp/product/0981893562/ref=oh_aui_search_detailpage?ie=UTF8&psc=1
Edit: Link to book
No problem at all. Honestly the best thing I have ever read that has given me the most beneficial mind set towards money is the book Rich Dad Poor Dad. Its my financial principle bible. Ive read it at least 4 times thought high school and up to now. Listen to me when I say this and Just Read It. As far as stock specific goes, I used a site called wall street survivor Stock Simulation Game
It follows the stock market exactly and teaches you the basics starting out with a mock up 100K. I played it all through highschool and it has taught me SO much and saved me SO much. There are several other sites like this one but its just the one I've found to like the most. To give relation I'm in the same boat as you. In college and have a few thousand in the bank that I'm trying to make something with. When I say make something I mean I'm aiming for a 10% return on my portfolio after tax and commissions. Lastly and most important are my own personal rules, DONT touch your real cash until you have spent at least 6-8 consecutive months playing the security and keeping track of it in relation to it's industry. And when you do don't put more than 10% in any one security. Also Dont invest in anything you don't understand. And finally, the ultimate goal is to have all your money working for you creating a steady cash flow of passive income. <-- This is something I have still yet to accomplish but am hoping to in the next few years.
Unlikely you'll find such a thing. Read Hull https://www.amazon.com/gp/aw/d/013447208X/ref=mp_s_a_1_1?ie=UTF8&amp;qid=1501755851&amp;sr=8-1&amp;pi=AC_SX236_SY340_FMwebp_QL65&amp;keywords=Hull+derivatives
Any earlier addition will suffice to get the most best understanding of all general classes of assets.
The problem is say you have base asset classes: equities, bonds, currencies and commodities.
The you have options on those.
Then you have futures contracts on those.
The you have options on the futures contracts.
Bonds can be broken to sovereign and corporate.
Corporate can be high yield or investiment grade.
Sovereign can be local, state, national
And it goes on and on and on.
Check the Permanent Portfolio by Craig Rowland. It will guide you through the most secure investment strategies with historical data and the reasons why they have always outperformed a strategy only focused on stocks or other single investments.
Best of all, once implemented it requires very little work and no brokers need to be involved.
This
Learn some basic accounting. Learn to balance cash flow. Use Quickbooks/Quicken and bill pay.
Try to not buy things that cost money. Try to buy things that will make you money.
Separate your career from your business.
Best book I ever read was Rich Dad Poor Dad ( http://www.amazon.com/Rich-Dad-Poor-Money-That-Middle/dp/0446677450/ref=pd_bxgy_b_img_a ) buy it used for a couple dollars. This book, through a 3rd grade reading level, will teach the basics of getting ahead...and most importantly, get you excited about it.
(Free video: http://www.betterdaystv.net/play.php?vid=190). Stay away from the courses and stuff...they're really expen$ive and I'm not convinced they're all that useful. ...and read other authors who's view points are different to round yourself out.
And so you know, I am closing on my 13th profitable real estate investment thanks to the teachings of this book. It's a great start.
Get the book Poor Dad Rich Dad and read it. Then invest in assets.
Also if you want some great investment strategy for your accounts read this: The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets
http://amzn.com/1118008855
And also go here ... http://www.advisorperspectives.com/dshort/updates/Monthly-Moving-Averages.php
Or ... you could read books that are not based on half-truths and fallacies that will lead you to a range of unnecessary and easily avoidable risks.
Here are a couple of suggestions
The Simple Path to Wealth - J L Collins
The Bogleheads' Guide to the Three-Fund Portfolio
He has a highly rated piece about budgeting already. There's a market for this. The hatred coming from this sub is absurd.
EDIT: Added links to Jesse's writings.
The Debt Consolidation Myth
Invest Like A Pro