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[TD1]

Hey all.

I have a fair sum saved but bank interest is terrible. I was wondering if there was a way to improve my gains. So I looked into stock investment, which is largely above my head. In so doing, however, I learned about robo-advisors, which seem to be algorithms which invest your money for you at a percentage fee (say 0.5%).

I'm always suspicious of a silver bullet, though. Does anyone know if it's a good idea?

[dragdeler]

Hey what about JoshuaFM he had basically the same thread , from what I gather the most conservative strategy is just to own a bunch of stock of companies you trust to never going bankrupt hold on and thereby bet on growth beating what your money would become in a bank account under inflation, buying a little from time to time. I'm by no means an expert but highly suspicious of what you describe  or any kind of bundled stuff etc. And me personally, I think stocks are all overvalued, but I guess so long as society doesn't fully collapse that's more of a moral judgement than a value assessment.


Anyway I'm just here because I got one simple question: does anybody know (more like have anecdotal advice I guess) how to set up a fun money account? Like where would I need to register to be able to spontaneously dump money from my paypal into real actual stocks from my home computer? (not some fund or some financial product or something like that, real stock)


I've regretted a few times not be in a position to make small experiments when the time was right.

[nenjin]

Timing is sus lol

[TD1]

Edit:

Missed drag's comment.

Anyway, I'm gonna do more research myself. Seems to be a huge amount to absorb.

[Telgin]

My advice, if you just want to get more interest than a bank account and you're okay with the investment potentially losing some value short term, is to buy ETFs or index funds that track the whole US stock market (if you're in the US, change as appropriate).

This has the big advantage that you don't have to pick stocks, so you don't have to guess which ones are going to do well or do any analysis.  It also has the advantage of less volatility.  If you buy Tesla stock today and Elon Musk says something dumb on Twitter that causes its value to tank 20%, you'd be unhappy.  If you buy an ETF or index fund that just includes Tesla stock, you lose only a fraction of what you'd otherwise lose.  On the flip side, if you owned Gamestop stock you'd be making a ton of money right now for dumb reasons, but also would only gain a fraction of that if you owned a fund that included Gamestop stock.

Keep in mind that this is more like retirement investing though, and works best if you plan to leave the investment alone for a few years.  Worst case scenario, you could lose 50% or more if there's a stock market crash, and it may take years to recover, but long term you're (almost) guaranteed to make more than if it's sitting in the bank.

I used to use Robinhhood briefly for stuff like this since it's easy to get started with and lets you deposit money quickly and do (near) instant trades.  Robinhood, however, is really suited to day trading, which this is not.  After I realized I wasn't doing day trading, I switched to using Vanguard to just set it up as an IRA for retirement, and just buy their index funds through it.  Vanguard requires some paperwork and isn't a day trading platform though, so if you plan to buy and sell stocks quickly I don't think I'd recommend it.  I don't have a good suggestion for that, since I'm also not sure how much I trust Robinhood, but they're still around so maybe it's okay.

If you're not okay with losing money short term, then there are a few other options you can look into, like money market accounts or just high interest online savings accounts.  I don't know much about these though, and in particular I'm not positive that money market accounts can't lose money.  They may just be lower volatility than normal stocks.

[TD1]

That's a brilliant answer, thanks very much.

I don't really care about flashy big gains in money. Just making my money work more.

[Starver]

If this need to 'experiment' in a current trend, note that the professionals (and probably the robosellers) were already stung, and the winners in the 'blip' have probably already had the best gains and by this stage you'd be likely to joining the rollercoaster just as it heads back downhill again. (But not likely enough to be able to trust to the non-amateur tips, either. Murphy's Law, etc.)

Especially true if there's illegal price manipulation (some sort of QAnon for the financial markets, sounds like...) or just someone playing with everyone's heads (like some sort of QAnon for the financial markets!) with no personal skin in the game in the first place).



Thought experiment: Choose a random company. Create eight personas in diverse places, especially choosing 'private'/time-limited channels that are hard to pick up later. Casually predict a rise in four, a fall in four. Whatever turns out true, drop out from the mismatched conversations (or use for other trolling purposes) and 'suggest' another result on the remainder (two up, two down). When one turns true, rinse and repeat with the final two channels. By the time you finish, you've got one place where you're officially the Prediction God and most of the rest never realised you were utterly playing it be ear, vis-a-vis your 'incorrect' personae that you carefully didn't make look anything like any of the others, just random peeps. Just think how many 'Q's never survived long enough to influence whole political ideologies

Next..? Well, depends on what you want to do with the high reputation you just mustered. The above was really just the means to some other ultimate end. And surely won't be the only game in town.

(NB. You've probably got to have skill and a bit of luck to do this convincingly, anyway, so anyone who could follow these instructions successfully probably already knows how to do it well/has actually done it. I wouldn't advise you to actually do it based on just reading this summary. Or at all, for obvious reasons.)


That said, I'm sure there's plenty of legit 'live play' share-dealing methods (among an indeterminate number of vanity ones more overbalanced to just help the people who run it). I couldn't tell you which they are, though. In the old days I'd suggest finding a bricks'n'mortar broker you think hasn't anything to hide (suggested by your bank manager, over cocktails?), and not too much comission, but it seems every sixth ad I get served at the moment in one of my network devices is pushing one or other Exchange App, which could include the current best players, and yet I don't know enough about them to even want to touch them with the proverbial bargepole.

Good luck if you do do something. Sorry I'm not (can't be, perhaps shan't be) actually helpful. ((And ninjaed*2, while writing, anyway.))

[dragdeler]

I'd consider the current events a done deal even it probably hasn't played out fully yet. I would however have tried something a year ago when the markets crashed from the rona, if only I knew who to trust, well at least it seems my suspicions are justified, I guess that's some sort of relief over the inaction.

[ChairmanPoo]

You should invest all your money in cryptocurrency! Petro is a good choice!

[TD1]

I only invest money in the Petyr Baelish fund.

Returns always come smelling of perfume for some reason.

[Aoi]

I've got a decent amount of skin in the current events right now, and I'd say that it's definitely not over, though things are reaching a fever pitch. Things are going to go nuclear very soon, for better or for worse.

If you want to passively invest, I'd say to look at the various ETFs out there and pick one that suits your interests... and forget about it unless something comes up in the news that's relevant to it or you want to move it elsewhere.

For active trading, if you're in the US, 25k in your brokerage account is a very important breakpoint: Below that, and you're restricted in the amount of trades you can make in a day, so you're discouraged from making short term, high-volatility plays. I'd suggest doing paper trades, practice trading with fake money, first, so you can get an idea of things work... and it's often a humbling experience that shows you just how bad an idea it is to charge in blindly. On top of stocks, it's slightly more complex, but basic options are also an interesting, fairly low risk, er, option. (Mostly cash-covered puts and covered calls... sometimes known as the wheel.)

Robinhood is pretty much frictionless to get in and start kicking around, even with triple (or even double) digit account sizes, and allows for fast and easy deposits and withdrawals. Due to the January 28 debacle though, I'm actively on my way out the door, so... yeah. (If you have specific RH questions, toss 'em out, and I'll see what I can do.)

[dragdeler]

I'd just love to hear what you'll pick over robinhood in the end. Those sorts of platforms aren't ideal but yes it seems to have allmost no barriers of entry.

[Jimmy]

So I'm reposting what I've said before, since it's still relevant.

First, do you have any sources of debt? Student loan, mortgage, credit cards?

If yes, pay them off now. Returns from the stock market aren't likely to be better than the compound interest on your debt.

If you still have savings after this step, what purpose is your savings serving?

Is your savings serving as a backup plan against emergencies?

Is your savings serving as a future deposit for investing in a house to exit the rental market?

If so, don't invest in the stock market. Expect your savings to be tied up in the market for years without seeing anything profit from it. You won't be able to withdraw your savings quickly should you need it urgently, and if you're counting it as a deposit, you might end up with less than you have now, pushing the benefits of gaining a real estate asset further into the future, and all the attendant lost investment potential that causes by continuing to rent instead of own your home.

Finally, assuming you're now in a situation where your excess income isn't being used for anything other than growing a savings account, you can consider investing. Put whatever you have in excess of your needs into a diversified investment fund, and consider focusing on dividend paying shares, reinvesting your returns in continuing to diversify your portfolio.

Looking at current events and riding them is a high risk bet. That's not to say it won't pay off. I mean, if you bought bitcoin in January 2019 and sold it now, you'd have made about 1000% profits on your investment. Or, you might have lost everything if it crashed instead. Putting your eggs all in one basket only works if you can afford to lose your eggs.

[anewaname]

I'd "upvote" what Jimmy posted as the first priority, and what Telgin posted as second priority. Of course, buying after the index drops is better than buying before the index drops; and the markets may do strange things with the current political situation...

[Aoi]

I'd just love to hear what you'll pick over robinhood in the end. Those sorts of platforms aren't ideal but yes it seems to have allmost no barriers of entry.

The ones riding high on my list right now are Fidelity and Webull.

Spoiler (click to show/hide)

As a topline note, I don't particularly need many of the services that some of the newer services offer, like fractional shares1, instant deposit, or crypto, so I haven't really paid attention to what offers it.

Regarding Fidelity: So far, they haven't had any kind of liquidity issue that Apex, RH, and a few others had, forcing them to restrict trading. They have actual support in case something goes wrong.2 Trading hours from 7AM-8PM. Option fees, though it's only 65c/contract. Level II access requires a certain minimum of trades. Lots of mutual funds and ETFs if they're your thing. Does NOT sell order flow.

Regarding Webull: Was affected by the Apex liquidity issue.3 Bad support. Trading hours from 4AM-8PM (widest band).4 No pink sheets. Free options. Level II available for a minor fee. Very small (~5b). Parent company owned by China. Sells order flow.

1. If you're trading with an account balance under a few thousand, this can be a big deal, seeing TSLA's been hanging out in the ballpark of 800.
2. There was an issue with RH a... year? back where people's accounts were 'hacked' and assets drained. "Thank for your concern, we'll contact you in 5-7 business days..."
3. Though, to their credit, but not very usefully, they immediately and openly stated why trades were restricted.
4. This is one is actually a really big deal and is my primary balance against Fidelity's superior stability.

-----

Another major question is: How much time do you want to spend to manage your money? I spend a lot of time managing my finances... mostly because I don't work a regular job. If you're up to juggling your finances like mad, there's a lot of subtle ways to squeeze out extra percentage points here and there.