Where do you invest now?
 

Just wondering what companies one thinks it is a good time to invest in? Our planner suggested AT&T or waste management or Johnson and Johnson?? Not sure about any of these. also what about oil drilling?? would now be the time to possibly invest in a private company??

Need to know the purpose for the investment - income or growth - and the mix of your other investments. For income AT&T and JJ would be ok. Don't know much about Waste Management. Oil drilling seems to be going in an entirely different direction from the other recommendations. This raises questions on how good the advice is. I would look toward ETF's or mutual funds as the risk should be less than one or two stocks.

If you are asking those types of questions you should probably invest in Mutual Funds and stay out of direct stock investment. There are no short cuts. Either you do your own research and understand the info or invest in Mutual Funds and let others do it for you.

I agree that you may not be getting the best advice. However don't despair, it is really not that hard. First a couple of things you and every other investor need to accept and believe.

1. Markets are very efficient and all price variables are already in place in all stocks.

2. You as an individual cannot possibly beat the market. In is not possible and any one who claims differently is making false promises. There is always a hot stock picker or a lucky mutual fund manager and they may do well for a few years, but every time the market will beat them. Even one of the very best, Peter Lynch, will admit he could not continue to beat the market.

3. Once you accept those facts, the only way to invest becomes very simple. Determine your level of risk and then pick the asset allocation (stocks vs bonds) that matches your position in life and risk tolerance.

4. Select a well know highly respected fund company. Fidelity, Vanguard, Schwab, etc.

5. Buy the lowest expense ratio index funds you can find that match that asset allocation. Use total stock market, total bond market, total international, and total emerging market funds.

6. VERY KEY. Re-balance when ever your asset allocation falls 5% out of balance.

This way you own the entire stock and bond market. By re-balancing you are always buying low and selling high. You will beat 90% of all stock pickers and mutual fund managers every year. You will beat 100% of them over 10 years. This is a very simple, easy to manage, low risk approach to investing.

I am a chartered financial consultant and spent 25 years in the financial services business. I don't have a clue - I am almost totally in cash equivalents right now - this market is totally unpredictible (more than usual).

:agree:

In my experience you first need to create an investment plan that lays out your goals i.e. growth or income or what ever. Decide your risk tolerance and then work with your advisor to create the plan that is best for you. This seems to be a traders market as far as stocks go. i have been having sucess selling OTM puts on etf's like QQQ and SPY collecting the premiums and staying in mostly cash. If I get a put contract assigned to me I start selling OTM covered calls or even ITM covered calls if I can make a quick dime or two. I sometimes do a debit or credit spread to limited the risk and generate some income on a case by case basis. I agree index funds are a little safer than blue chips as you don't need to worry about a banckruptcy or some unseen event wiping out 100% of your investment. I have been using the above strategy for the last two years and earning between 10 and 12% on my money the last two years

Dirt ! God isn't making anymore ,,,,

:coolsmiley: Even Dirt has gotten high! Good farm land has doubled in price the last few years----Bubble?? I made a bit of money on real estate in the past, fortunately got most of the way out before the Bubble burst!

When investing in stocks, you now have to assess the political risks, as well as the business risks. For example, we know how this administrations feels about companies making exorbitant profits, outsourcing of manufacturing jobs and offshoring of profits.

I have made more investing in Apple over the years than any other stock that I own. I would love to own it now, even at this price. But what are the political risks? Apple has more profits than any other company (more than the top three oils combined), manufactures 100% of their products overseas, and has more cash parked overseas than the Fed has on its balance sheet. What happens if politicians and courts turn on them, like they did on Microsoft.

As for me, I am out of the market except for gold and silver. I am buying rental houses just outside of The Villages. Prices are very low, and rental returns are more than 10% on cash purchases. It is more work than stocks, but they don't keep me awake at night.

I've got all 3. A few years ago I got completely out of the market, but then you couldn't make anything with CD's or money market so as advised my a very successful friend of mine, I bought dividend stocks. I only bought stocks that paid between 3% and 5% and were very highly recommended by the one newsletter I subscribe to. I'm very happy with the results for the past year and half or so since I started. Out of 19 stocks only 2 are slightly down. I created a watch list and decided on a buy price based on the last year or so performance. I waited for a very down day on the market and bought. I'm not very knowledgeable about terms and such on the stock market so I avoid things I don't understand. Been working very well for me.
I got turned off by mutual funds because I couldn't buy at a price I wanted because I had to wait for the closing price at the end of the day and the same for selling. Also you have to hold the stocks for quite a while to avoid early trading penalties.

i bought a house in tv

One word-DIVERSIFICATION. A good fee based financial advisor will help you from worrying every day while watching CNBC. Patience is also key.

Haven't lost anything from my mattress yet.

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I'm curious. For those of us who went through B-School in the 60's, the market today bears no relation to the fundamentals we studied back then. As a financial professional, you know you cannot sit in cash unless you want to lose ground rapidly. So let's say you have to make 10% on your investments going forward, how would you do it? Don't whine, don't whimper. You have a quarter century experience. How?

Always remember that risk equals rewards. In today's markets to make 10% you would have to take a LOT of risk. I personally would look for a more reasonable return with a lower risk.

I am up 7% YTD with a fairly low risk portfolio and will be satisfied if it hangs in there or even a small decline by year end. My target objective in today's market is 5% so am doing better then target right now. I sit with an AA of age minus 15 (because of interest rate risk in bonds) and am almost entirely in low ER index funds with a small cap tilt.

Only non index funds I own are Vanguard Wellington and Wellesley and they would be in index funds except I have a tax issue if I sell them. And so far this year keeping them was a good decision.

Read Paul Winkler
 

:agree: Excellent Answer! Plus read Above the Maddening Crowd by Paul Winkler. He shows studies to backup up what l2ridehd says and gives you more information on why Asset Allocation works so well - If you use this methodology, things get very simple and you can have confidence that you are doing the right thing.

our guy put us in gold awhile ago its moved us up 5% so far so good

I am not out for good, just sitting it out for awhile. You are correct, all the old assumptions are out the window. I am fortunate that the majority of my money is in a 401(k) which has a fixed account that is paying 6%. Also, money in a qualified account can be shifted back and forth without triggering a taxible event. I have been successful (fortunate?) in moving money from stocks to cash and back many times in the last few years allowing me to increase my stock holdings by about 150%. I sell when I feel they have reached a temporary high, and buy back when they have reached what I consider to be a temporary low - it is not a strategy that works all the time, and is not for the squeamish, but has worked more often than not in my experience. Here's the secret for guaranteeing a 10% return........shhhhhhh... there ain't no secret!

Mostly dividend paying stocks. They pay me to wait for the market to come back. Even if it doesn't, I'll live off the dividends.

I'm a Portfolio Manager and I've been a portfolio manager for 14 years and I've been a broker for 30+ years.
I've seen many different ways to invest badly in my time but the easiest way to lose is to invest emotionally. People naturally are most comfortable buying when times are good and the stock is up and it feels good to sell and end the pain when the stocks are falling. For me the solution is to invest only when you can clearly see a bargain. You must be able to aproximate a fair value for a company so you can know when to buy and when to sell.
It is not a simple enough thing to put into a short post but it can be done reliably enough. With wide diversification the occasional value traps are more than offset by the majority of stocks reverting to normal values from depressed prices.
The market can be beaten. Many investors do so. I've done it by 2% + per year over the past ten years. It adds up to a lot over time.
For a good simple overview of the value philosophy I can refer you to a Buffett article from the 80's called the superinvestors of graham & dodsville. This article started me on my path of investing and it is as relevent today as ever.

Scotty

This is why I use options. Find the value stock at a bargin and then by selling puts get paid to buy the stock at your price if you get put the stock and pocket the premium either way

Seems like we have at least 4 approaches that work so far.
1. The dividend guys.
2. The options guys.
3. Price cycle approach as practiced by Old Coach.
4. The index fund approach as practiced by I2RH. (Does this include certain ETFs?)
Obviously there is no 'fire and forget' or sure fire method. I also note that all successful approaches require more than a passing knowledge of how the market operates. Thanks to everyone for the information.

Investing in real estate can be risky it's a good thing you got out when you did the bubble almost sank my company

Hello. I was an investment guru for years. yet I almost dont know anything in todays market. Subscribe to Motley Fool (look up on internet) and forget eft, mutual funds , rental (unless you are handy) and follow their advise. You can do it go gettum

Dividend blue chip stocks are a smart way to play the current market,but i have found some great deals in real estate.I realize most of you have no interest in real estate investing at this stage of your life,but the deals are out there,and the returns on your investment are excellent.You make your money in real estate when you buy and not when you sell,and i've found alot of great buys.

Give me your money and I'll invest it and make 1000% per day! ... NOT!!!!

Be very careful of who you can trust. Watch American Greed on CNBC.

As Pres. Regan once said ... "Trust, but verify". No one will care about your money more than you do. If you do not know how to invest ... learn. If you have a question about an investment keep asking until you get a very clear answer or don't invest until you do.

At our age the biggest threat to our money is something called "affinity theft". We give our money to someone we have come to trust because a friend of ours uses them.


If it sounds too good to be true ....

I have heard that a good place to invest right now is something called TIPS. Can one of you financial guys illuminate us as to what that might be?

Here ya go: Individual - Treasury Inflation-Protected Securities (TIPS)

I can tell you where NOT to invest. Everybody in The Villages should read this article - I can't post the link because of restrictions on this forum, but go to Google and search for "Index annuities safety trap cnn money" and read the CNN Money article from a few months back about these annuity scammers. 55% of complaints in FL involve these insurance / annuity scams, and I bet we all have a mailbox full of invites to their seminars.

Unless you really understand the stock market and what you are investing in, keep it simple. When buying individual stocks and investment products you are playing against people who do this for a living all day every day and have years of experience. And some percentage of them are crooks and scammers.

Go to Bogleheads Investing Advice and Info and follow their suggested reading list and read for the next 3 months before you invest one dime. Then if you believe you're smarter then everyone else in the business, invest as you chose. If you believe as I do, that you can not beat the market, then follow the advice of "keep it simple" Invest in low cost index funds with known companies using an asset allocation that matches your tolerance for risk.

I think we should start an investment club that would follow these principles and help people manage their own investments in a low risk manner. For every person who "has the answer" and has made money in the market, there are ten who have lost most everything or are in products they have no business buying. At this point in our life, we need to have investments that will protect our capital, make a modest return, and allow us to sleep well at night.

You can beat the market. Educate yourself a good start is to subscribe to seeking alpha