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My number one piece of advice: invest in the market, never invest in individual stocks. Find the best index fund you can, and let your money grow with the mark

My number one piece of advice: invest in the market, never invest in individual stocks. Find the best index fund you can, and let your money grow with the market. If you want to get into things like individual stocks, or even angel investing, do it for the fun and the experience, but don't do it for the wealth. "Get rich slowly" is the best advice I've ever been given.

rubicon33 8y ago
I'm curious, how many years did it take before you realized it was the best advice you've ever been given? I've been "getting rich slowly" for 8 years, and boy let me tell you, it sure is slow. Definitely doesn't feel like my wealth is growing in index funds fast enough to retire within this life time.
- lacker 8y ago
  The last 8 years has been a pretty good time for investing in indexes. The S&P 500 has gone up by a factor of about 2.5x over that time! http://www.macrotrends.net/2488/sp500-10-year-daily-chart http://www.macrotrends.net/2488/sp500-10-year-daily-chart If the market hasn't been going up enough for you to feel good about your investments over the past 8 years, you are probably not saving enough to meet your goals.
- BraveNewCurency 8y ago
  > Definitely doesn't feel like my wealth is growing in index funds fast enough to retire within this life time. Ha ha, I feel the same. But don't discount the fact that small percentage returns are actually exponential growth. (For example, 2% returns actually doubles your money every 10 years.) Just because it 'feels' like your investments are stalled doesn't mean that they are.
  - jackcarter 8y ago
    > 2% returns actually doubles your money every 10 years I wish! More like 35 years. 7% returns will double initial investment every 10 years.
    - dogma1138 8y ago
      That said tho if you invest even $200 a month from the age of 20 till retirement you will have more than 1M by retirement with a decent index fund.
      - ryandvm 8y ago
        That said, one million dollars ain't what it used to be after 45 years...
        dogma1138 8y ago
        Index funds tend to scale rather well with inflation tho.
    - W-oland 8y ago
      7.2%
- charlesdm 8y ago
  You can play it safe (i.e. "getting rich slowly", like you have been) or you can take more calculated risks. Higher risk, higher upside, but perhaps the upside is disproportionately higher than the downside or the additional risk you are taking on, so you could be willing to invest in said company / asset / etc. As a counterexample, I've done great on individual stocks when I really understood the company well. You generally get 2 to 3 good investment ideas per year, so you could go overweight into those ideas. Stan Druckenmiller (who is an interesting person in itself with unconventional views) uses a similar strategy: https://www.youtube.com/watch?v=c6LgojkA6bo https://www.youtube.com/watch?v=c6LgojkA6bo
- deleted 8y ago
  [deleted]
- asdsa5325 8y ago
  Maybe you should double check, because there has been some pretty nice gains over the last 8 years.
dman 8y ago
Around 2007 I used to make fun of a colleague who was an Apple fan for investing his entire savings in Apple stock. As the years have gone by I have felt on many occasions that the joke is on me.
- deleted 8y ago
  [deleted]
bko 8y ago
I agree with this. A little knowledge can be very dangerous. If you don't know anything about finance or the market and you had money to invest, you would likely invest in market ETFs. If you knew a little more, you'd be trying to pick stocks or industries. Eventually if you were very knowledgable and experienced, you would go back to picking low cost ETFs and realize you can't beat the market without an edge, and being very smart is not an edge. And I'll add that the "best" index fund is pretty much the broadest fund with the lowest fees. For example, Dow Jones only has 30 constituents while S&P 500 has 500, so S&P is broader
jaxtellerSoA 8y ago
>My number one piece of advice: invest in the market, never invest in individual stocks. I have been disregarding this very prominent advice since 2015. I am up over 200% since then, and up 40% YTD. This is the same lame advice every financial advisor gives. It is even the advice Warren Buffett would tell you. However, Warren Buffett didn't get where he is today investing in ETF's and mutual funds, he invested in individual stocks. I completely reject this notion that investing in individual stocks is some extremely difficult thing to do well. That you need to spend countless hours doing high level analysis of a companies financials, that is just plain false.
- arielweisberg 8y ago
  Past performance doesn't guarantee future performance. Your strategy has no floor. A strategy based on investing in the entire market has a floor (and ceiling) which is the performance of the market itself. It also performs the same for everyone who participates and guarantees the same outcome with no active management risk.
  - jaxtellerSoA 8y ago
    >Your strategy has no floor. Seeing as how you don't know my strategy I don't know how on earth you could claim that. >It also performs the same for everyone who participates Maybe that is fine for you....it isn't for me. I want to perform much better than everyone else who is participating.
- tyrust 8y ago
  >I have been disregarding this very prominent advice since 2015. I am up over 200% since then, and up 40% YTD. Doing well over 3 years in a bull market is not very impressive. If you can beat the market over 30 years and through bear markets then you're a force to be reckoned with. >Warren Buffett didn't get where he is today investing in ETF's and mutual funds None of us here are Warren Buffett. Most of us here are working full time jobs as software engineers, not investors.
  - jaxtellerSoA 8y ago
koolba 8y ago
> My number one piece of advice: invest in the market, never invest in individual stocks. Number zero advice is to earn more and spend less. The former is at the mercy of your career but the latter almost entirely in your control. Getting in the habit of saving 50+% of your net income leads to a very happy life as you'll quickly accumulate a true nest egg.
overeater 8y ago
I think there's more to it than that when you start doing this. Like which index fund? The Dow Jones or S&P or total index? And just the US market or including international markets to be more diversified? What broker would you use?

rubicon33 8y ago

I'm curious, how many years did it take before you realized it was the best advice you've ever been given? I've been "getting rich slowly" for 8 years, and boy let me tell you, it sure is slow. Definitely doesn't feel like my wealth is growing in index funds fast enough to retire within this life time.

lacker 8y ago
The last 8 years has been a pretty good time for investing in indexes. The S&P 500 has gone up by a factor of about 2.5x over that time! http://www.macrotrends.net/2488/sp500-10-year-daily-chart http://www.macrotrends.net/2488/sp500-10-year-daily-chart If the market hasn't been going up enough for you to feel good about your investments over the past 8 years, you are probably not saving enough to meet your goals.
BraveNewCurency 8y ago
> Definitely doesn't feel like my wealth is growing in index funds fast enough to retire within this life time. Ha ha, I feel the same. But don't discount the fact that small percentage returns are actually exponential growth. (For example, 2% returns actually doubles your money every 10 years.) Just because it 'feels' like your investments are stalled doesn't mean that they are.
- jackcarter 8y ago
  > 2% returns actually doubles your money every 10 years I wish! More like 35 years. 7% returns will double initial investment every 10 years.
  - dogma1138 8y ago
    That said tho if you invest even $200 a month from the age of 20 till retirement you will have more than 1M by retirement with a decent index fund.
    - ryandvm 8y ago
      That said, one million dollars ain't what it used to be after 45 years...
      - dogma1138 8y ago
        Index funds tend to scale rather well with inflation tho.
  - W-oland 8y ago
    7.2%
charlesdm 8y ago
You can play it safe (i.e. "getting rich slowly", like you have been) or you can take more calculated risks. Higher risk, higher upside, but perhaps the upside is disproportionately higher than the downside or the additional risk you are taking on, so you could be willing to invest in said company / asset / etc. As a counterexample, I've done great on individual stocks when I really understood the company well. You generally get 2 to 3 good investment ideas per year, so you could go overweight into those ideas. Stan Druckenmiller (who is an interesting person in itself with unconventional views) uses a similar strategy: https://www.youtube.com/watch?v=c6LgojkA6bo https://www.youtube.com/watch?v=c6LgojkA6bo
deleted 8y ago
[deleted]
asdsa5325 8y ago
Maybe you should double check, because there has been some pretty nice gains over the last 8 years.

dman 8y ago

Around 2007 I used to make fun of a colleague who was an Apple fan for investing his entire savings in Apple stock. As the years have gone by I have felt on many occasions that the joke is on me.

deleted 8y ago
[deleted]

bko 8y ago

I agree with this. A little knowledge can be very dangerous. If you don't know anything about finance or the market and you had money to invest, you would likely invest in market ETFs. If you knew a little more, you'd be trying to pick stocks or industries. Eventually if you were very knowledgable and experienced, you would go back to picking low cost ETFs and realize you can't beat the market without an edge, and being very smart is not an edge. And I'll add that the "best" index fund is pretty much the broadest fund with the lowest fees. For example, Dow Jones only has 30 constituents while S&P 500 has 500, so S&P is broader

jaxtellerSoA 8y ago

>My number one piece of advice: invest in the market, never invest in individual stocks. I have been disregarding this very prominent advice since 2015. I am up over 200% since then, and up 40% YTD. This is the same lame advice every financial advisor gives. It is even the advice Warren Buffett would tell you. However, Warren Buffett didn't get where he is today investing in ETF's and mutual funds, he invested in individual stocks. I completely reject this notion that investing in individual stocks is some extremely difficult thing to do well. That you need to spend countless hours doing high level analysis of a companies financials, that is just plain false.

arielweisberg 8y ago
Past performance doesn't guarantee future performance. Your strategy has no floor. A strategy based on investing in the entire market has a floor (and ceiling) which is the performance of the market itself. It also performs the same for everyone who participates and guarantees the same outcome with no active management risk.
- jaxtellerSoA 8y ago
  >Your strategy has no floor. Seeing as how you don't know my strategy I don't know how on earth you could claim that. >It also performs the same for everyone who participates Maybe that is fine for you....it isn't for me. I want to perform much better than everyone else who is participating.
tyrust 8y ago
>I have been disregarding this very prominent advice since 2015. I am up over 200% since then, and up 40% YTD. Doing well over 3 years in a bull market is not very impressive. If you can beat the market over 30 years and through bear markets then you're a force to be reckoned with. >Warren Buffett didn't get where he is today investing in ETF's and mutual funds None of us here are Warren Buffett. Most of us here are working full time jobs as software engineers, not investors.
- jaxtellerSoA 8y ago

koolba 8y ago

> My number one piece of advice: invest in the market, never invest in individual stocks. Number zero advice is to earn more and spend less. The former is at the mercy of your career but the latter almost entirely in your control. Getting in the habit of saving 50+% of your net income leads to a very happy life as you'll quickly accumulate a true nest egg.

overeater 8y ago

I think there's more to it than that when you start doing this. Like which index fund? The Dow Jones or S&P or total index? And just the US market or including international markets to be more diversified? What broker would you use?