How should I get started when choosing mutual funds? I am find with a decent amount of risk and looking for a holding of a few years. Should I start with Vanguard?
Allen Kaplun: Generally, don’t do mutual funds but if you must stick with vanguard and monitor costs.
Kris Wright: I’m curious, why not mutual funds? The high costs?
John Quinn: Is it not better to choose your own investments, you might do a better job than a fund manager and no charges.
Allen Kaplun: John Quinn its better if you’re an “enterprising” investor, meaning you actually look into the company, get an understanding of the business model and figure out your own valuation. True, when you’re working with almost no capital your effort can translate to a wage of 0.001 per hour. But over time you develop expertise and end up moving millions. Don’t be like one of those guys that will reduce a complicate conglomerate to a “50-day midpoint” You need to really understand the business you’re buying into. To understand mutual funds, look at John Bogle. Freakonomics recently did an interview with him. Check out http://freakonomics.com/podcast/stupidest-money/
The Stupidest Thing You Can Do With Your Money – Freakonomics
freakonomics.com
Jon Berry: Mutual funds are great. Everyone yells vanguard over and over but they aren’t the only ones in town.
Otis Jenkins: Can’t go wrong with Vanguard. STAR fund is entry level and has acceptable returns.
Greggory Miller: I stand by Warren when he states that for the everyday investor, you should put your money into an index fund and Vanguard is a great option. However, if you are interested in spending the time to learn the enterprising investing strategies you may get a much better return.
David Ou: If you’re willing to take some risk, are you willing to learn and analyze company balance sheets and business environment? If yes, pick your own stocks.
Kris Wright: I don’t have the money at this point to buy significant amounts of 10-30 securies :/
Kris Wright: I was hoping that a mutual fund would help me diversify early on
David Ou: If not I highly recomend the S&P 500 etf or fund. Over most any mutual fund. As S&P 500 will perform just as well, if not better than majority of the mutual funds out there in the long run.
Matthew Easton: You have to factor in commissions when buying stocks. you don’t realize this but a 50$ stock purchase with a 5$ commission is 10% “MER” then there’s proper asset allocation. So you kinda need a decent size portfolio to diversify without commissions eating away your portfolio. If you want to pursue a particular strategy there’s probably an ETF that follows it. Also there’s nothing saying you can buy ETFs, mutual funds, and stocks, just make sure they work together?
Kris Wright: Commissions is the main reason I want to take advantage of funds. I usually buy $300 lots at a time
Matthew Easton: When I look at a mutual fund I like to look at the alpha and R squared ratio let’s you know how the fund performs to its benchmark index and I don’t mind the sharpe ratio to give you risk to return metric (side note: I don’t like how they use expected rate of return and the current standard deviation! But I’m also not going to argue with a Nobel laureate)
Kris Wright: Thanks Matthew:)
Jake Jara: ETF either VOO or VTI
Jon Berry: I’m convinced no one here has tried mutual funds.
Kris Wright: What makes you say that?
Igor Garłowski: Take ETF
Jimmy White: Trump 2020