5 ms·

Ask HN: Have $15k to invest. suggestions please.

3 points by investiser 16y ago

Have saved about $15k and do not have a need for this money for the next 5 years. Please suggest where i can invest this amount with decent returns, say somewhere in 12-15% range. I have not tried investing in stocks due to volatility, hence any pointers on stock/bond investments would also be helpful. Appreciate your time/suggestions very much.

wmwong 16y ago
If you're talking about 12-15% after 5 years and not 12-15% per year, you can stick it in a GIC and not worry about risk. I'm in Canada and ING's 5 year GIC is 3% per year, which will end up giving you almost 16% after compounding (1.03^5 = 1.159). If you're looking for 12-15% a year, you'll have to be doing some very risky stuff. Returns like that are hard to come by. Let me know if you find anything though ;)
dasht 16y ago
This is not an appropriate forum in which to seek or give investment advice of that sort. Those who respond risk accidentally running afoul of securities law and you risk getting (and, worse - taking) very bad advice.
- Mz 16y ago
  And then there is always the risk that someone will make a smartaleck suggestion to the effect of "write me a personal check". (Of course, tonight I'm the one tempted to make such a suggestion. :-/)
lzw 16y ago
Berkeshire hathaway and AFLAC both have returned above your target rate over the course of decades. There are also many canadian resource companies that will return a good percentage in dividends and then stock appreciation, plus you'd benefit from the depreciation of the dollar against the CAD. IF you go that route, look for one that is adding resources faster than they are depleating them-- some have really high dividends but they are burning thru their reserves. %12-%15 is not that hard to get, and doesn't involve substantial risk, but does involve doing your homework. I would recommend one of Timothy Vick's books on Buffett for some advice. Back when I was in the equities markets, I was able to predict the return I would get from a stock, buy it, and then, on average, exceed that return. Stocks are not gambling when you buy low, pre-calculate expected return over 5-10 years, and only buy when you are getting a good deal based on the expected return. I'm out of the equities market because the US dollar is in serious danger, and I would not recommend bonds for this very same reason. I've been doing better in precious metals than I did in equities. But if I were in equities I'd also research some of the good precious metals companies-- some are very well run, and have both equity and growth appreciation by moving assets from discovery to production, as well as leverage to the decline in paper currencies which will cause their resources to have a larger market value. It is one thing to buy gold in the ground for $20 an ounce, it is quite another when gold is going up in price while you're doing it. But this sector takes more research. IF you're willing to put in some time, it isn't that hard, but first I would recommend learning. The vick book, or Mary Buffetts "buffetology" are good resources. Find people who cover the sectors that interest you, learn all you can, and only invest in your circle of competance.
- lzw 16y ago
  Also, one thing, if it is a new sector, consider if you can do some paper trading based on actual returns in the past. For instance, get annual reports from several companies from 2004. Try to get a survey of companies in the sector, and not be influenced based on what you know now about the companys. If you're married it would be best to have your spouse anonymize the companies by copying down the key figures from the annual reports, and then the price on Jan 30th, for each of the next 5 years. Have her keep the company key seperate. Analyze them on that basis, then look into the prices on the stock market in January 2005. Use those prices and discounted cash flow analysis to predict what their prices will be in 2010. Invest a fake $150,000 in the companies based on those calculations. Then wait a week. Each week, look up the prices for the companeis a year later and decide if your thesis still stands. For this example, lets just pretend like you have no access to news, no annual reports for 2005, just the price on Jan 30th, 2006. Decide to re-allocate if you want, but pay $100 for each transaction (sales and buys). IF you're down and you sell then you're locking in that loss. Do this for the next 5 weeks until you've covered the time period to Jan 30th 2010.... and then look to see how your companies did. Try to draw your conclusions before you connect the fake companies names with the real companies. Don't forget to account for dividends in the interim as well. This can be very instructive-- but be sure to learn about how DCF and current trading price affect risk. IF one of the companies did poorly, was it because of bad management? An externality that was unpredictable? etc.
  - investiser 16y ago
    Thanks for the suggestions. I will check out the book, and the method you suggest seems very fair enough. Appreciate it very much.
sabj 16y ago
12-15% a year is very high indeed, and not a realistic expectation. Because you have a limited amount to invest, your best option may likely be to invest it in any number of index funds. These are very, very low in their expense ratios and try to track indices or sections thereof without lots of management (buying and selling, etc) of the sort that causes mutual funds to overwhelmingly underperform the broader markets. You can open an account at ScotTrade for free, and then buy a few index funds that you like. You could either put these into mutual funds, like Vanguard's VFINX US S&P fund, or buy exchange-traded funds which track indices as well. Investing early is wise, the key thing is not to try to beat the markets (at least not with YOUR money on the line!) and also note that volatility will make you unhappy if you check often. You'll be up and down but, over the long term, hopefully up. But if you check frequently, the "down" times will make you unhappier than the happy-times will make you happy. So, set it and forget it, if you take a diversified and relatively low-risk approach. For 15k, you could invest across bonds, US stocks, international stocks, emerging markets, and more, all without significant cost or overhead -- if you play the broader markets, instead of trying to pick winners. Most importantly, keep educating yourself, and not just what other people say on random internet forums ;)
- investiser 16y ago
  I consider HN to be a very informative forum hence posted it here :) My goal is not to beat the markets, at the same time not to leave the money in Savings account which does not get any significant interest either. Volatility is a concern, hence I had stayed away from stocks till now. One other suggestion was to track some specific companies for a period, and invest based on the results. Investing in index funds seems like a good choice, and will explore that :)

3 points by investiser 16y ago

wmwong 16y ago

If you're talking about 12-15% after 5 years and not 12-15% per year, you can stick it in a GIC and not worry about risk. I'm in Canada and ING's 5 year GIC is 3% per year, which will end up giving you almost 16% after compounding (1.03^5 = 1.159). If you're looking for 12-15% a year, you'll have to be doing some very risky stuff. Returns like that are hard to come by. Let me know if you find anything though ;)

dasht 16y ago

This is not an appropriate forum in which to seek or give investment advice of that sort. Those who respond risk accidentally running afoul of securities law and you risk getting (and, worse - taking) very bad advice.

Mz 16y ago
And then there is always the risk that someone will make a smartaleck suggestion to the effect of "write me a personal check". (Of course, tonight I'm the one tempted to make such a suggestion. :-/)

lzw 16y ago

Berkeshire hathaway and AFLAC both have returned above your target rate over the course of decades. There are also many canadian resource companies that will return a good percentage in dividends and then stock appreciation, plus you'd benefit from the depreciation of the dollar against the CAD. IF you go that route, look for one that is adding resources faster than they are depleating them-- some have really high dividends but they are burning thru their reserves. %12-%15 is not that hard to get, and doesn't involve substantial risk, but does involve doing your homework. I would recommend one of Timothy Vick's books on Buffett for some advice. Back when I was in the equities markets, I was able to predict the return I would get from a stock, buy it, and then, on average, exceed that return. Stocks are not gambling when you buy low, pre-calculate expected return over 5-10 years, and only buy when you are getting a good deal based on the expected return. I'm out of the equities market because the US dollar is in serious danger, and I would not recommend bonds for this very same reason. I've been doing better in precious metals than I did in equities. But if I were in equities I'd also research some of the good precious metals companies-- some are very well run, and have both equity and growth appreciation by moving assets from discovery to production, as well as leverage to the decline in paper currencies which will cause their resources to have a larger market value. It is one thing to buy gold in the ground for $20 an ounce, it is quite another when gold is going up in price while you're doing it. But this sector takes more research. IF you're willing to put in some time, it isn't that hard, but first I would recommend learning. The vick book, or Mary Buffetts "buffetology" are good resources. Find people who cover the sectors that interest you, learn all you can, and only invest in your circle of competance.

lzw 16y ago
Also, one thing, if it is a new sector, consider if you can do some paper trading based on actual returns in the past. For instance, get annual reports from several companies from 2004. Try to get a survey of companies in the sector, and not be influenced based on what you know now about the companys. If you're married it would be best to have your spouse anonymize the companies by copying down the key figures from the annual reports, and then the price on Jan 30th, for each of the next 5 years. Have her keep the company key seperate. Analyze them on that basis, then look into the prices on the stock market in January 2005. Use those prices and discounted cash flow analysis to predict what their prices will be in 2010. Invest a fake $150,000 in the companies based on those calculations. Then wait a week. Each week, look up the prices for the companeis a year later and decide if your thesis still stands. For this example, lets just pretend like you have no access to news, no annual reports for 2005, just the price on Jan 30th, 2006. Decide to re-allocate if you want, but pay $100 for each transaction (sales and buys). IF you're down and you sell then you're locking in that loss. Do this for the next 5 weeks until you've covered the time period to Jan 30th 2010.... and then look to see how your companies did. Try to draw your conclusions before you connect the fake companies names with the real companies. Don't forget to account for dividends in the interim as well. This can be very instructive-- but be sure to learn about how DCF and current trading price affect risk. IF one of the companies did poorly, was it because of bad management? An externality that was unpredictable? etc.
- investiser 16y ago
  Thanks for the suggestions. I will check out the book, and the method you suggest seems very fair enough. Appreciate it very much.

sabj 16y ago

12-15% a year is very high indeed, and not a realistic expectation. Because you have a limited amount to invest, your best option may likely be to invest it in any number of index funds. These are very, very low in their expense ratios and try to track indices or sections thereof without lots of management (buying and selling, etc) of the sort that causes mutual funds to overwhelmingly underperform the broader markets. You can open an account at ScotTrade for free, and then buy a few index funds that you like. You could either put these into mutual funds, like Vanguard's VFINX US S&P fund, or buy exchange-traded funds which track indices as well. Investing early is wise, the key thing is not to try to beat the markets (at least not with YOUR money on the line!) and also note that volatility will make you unhappy if you check often. You'll be up and down but, over the long term, hopefully up. But if you check frequently, the "down" times will make you unhappier than the happy-times will make you happy. So, set it and forget it, if you take a diversified and relatively low-risk approach. For 15k, you could invest across bonds, US stocks, international stocks, emerging markets, and more, all without significant cost or overhead -- if you play the broader markets, instead of trying to pick winners. Most importantly, keep educating yourself, and not just what other people say on random internet forums ;)

investiser 16y ago
I consider HN to be a very informative forum hence posted it here :) My goal is not to beat the markets, at the same time not to leave the money in Savings account which does not get any significant interest either. Volatility is a concern, hence I had stayed away from stocks till now. One other suggestion was to track some specific companies for a period, and invest based on the results. Investing in index funds seems like a good choice, and will explore that :)