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> e. Friends and family and supporters can participate - especially from their retirement accounts. This is really important - the wealth creation being broad h

> e. Friends and family and supporters can participate - especially from their retirement accounts. This is really important - the wealth creation being broad has a real good-news feel. Sharing the wealth. It's a really bad idea to do stock picking, or any other risky investment strategy, with your retirement account, and a really bad idea to promote it. One company goes bust and suddenly you lost your retirement savings. Or your parents did and you'll have to explain them why they'll have to continue working in their 70s and 80s.

nkohari 8y ago
Not sure what you mean by this. Most retirement accounts are investment portfolios. I don't think they meant that people should reinvest their entire portfolio in the offering, or invest money they couldn't afford to lose.
- ironjunkie 8y ago
  I think he means that stock picking is way more dangerous than a well diversified "safe" Fund like most retirement accounts push you to invest in (with high management fees of course).
  - arcticbull 8y ago
    Retirement accounts can just as easily invest in Vanguard funds, side-stepping the 'high management fees' issue of target-date funds. Picking is more dangerous when you're playing to retire vs. playing to build wealth. Further, your asset mix should become more and more conservative over time.
    - ironjunkie 8y ago
      That depends on your 401k. I agree that if you can switch to one with vanguard funds that's definitely the most optimal
      - arcticbull 8y ago
        I was suggesting rolling over at the first opportunity into an IRA
    - Spooky23 8y ago
      It depends on how you define conservative. The typical guidance is to shift towards bonds and short-term instruments in a fund or ETF over time. The problem with that is that the yields have been poor for many years. A nominally safe investment like the Vanguard Short Term Gov Bond ETF is down in real and nominal terms over the last decade.
  - gammateam 8y ago
    don't forget about the mad gainz you get from an Ally savings account with 1.5% interest edit 1.75% extra tennis balls for your walker
eldavido 8y ago
Yes and no. I read in Brealey-Myers [1] that you can get 80-90% of the way to pure beta (market risk) by picking 15-20 stocks. You just have to pick ones that aren't super correlated, e.g. 10 pharmaceutical companies. Whether it's worth your time messing about with this is a separate matter entirely. [1] https://www.amazon.com/Principles-Corporate-Finance-Richard-Brealey/dp/0073405108 https://www.amazon.com/Principles-Corporate-Finance-Richard-...
- JamesBarney 8y ago
  >Whether it's worth your time messing about with this is a separate matter entirely. Yeah, transaction fees can really eat into your gains unless you're a very good picked or are interesting millions.
  - gibybo 8y ago
    >Yeah, transaction fees can really eat into your gains unless you're a very good picked or are interesting millions. Buying 20 stocks would only cost you ~$120 (at $6/trade). For a $100k portfolio, that's an expense ratio of only 0.12% if you did it once per year.
    - justin66 8y ago
      Buying some amount of each stock once a year is probably not how you're going to be doing things if, for example, you want to keep your portfolio balanced to match your desired asset allocation. You'll probably need to make more trades than this. You're also more vulnerable to losing a bit of money to the bid-ask spread than Vanguard or Fidelity are.
  - ericd 8y ago
    Eh these are trending to zero pretty quickly, and with buy and hold plus yearly rebalancing, you're not really doing that many transactions anyway.
    - zone411 8y ago
patrickg_zill 8y ago
I think that it depends on how close to retirement you are. Having a bad time with a stock at 35 is a different thing than if you are 64.
CPLX 8y ago
That doesn’t make sense. If you start with the premise that you are going to make said investment, and want to determine where, a retirement account can make a lot more sense given that the tax deferred status can eliminate problems with short term capital gains, buying and selling in the account, and so on.
jerguismi 8y ago
> It's a really bad idea to do stock picking, or any other risky investment strategy, with your retirement account, and a really bad idea to promote it. One company goes bust and suddenly you lost your retirement savings. Or your parents did and you'll have to explain them why they'll have to continue working in their 70s and 80s. Quite bad idea to have all eggs in one account, but with proper diversification the risks are lower.

nkohari 8y ago

Not sure what you mean by this. Most retirement accounts are investment portfolios. I don't think they meant that people should reinvest their entire portfolio in the offering, or invest money they couldn't afford to lose.

ironjunkie 8y ago
I think he means that stock picking is way more dangerous than a well diversified "safe" Fund like most retirement accounts push you to invest in (with high management fees of course).
- arcticbull 8y ago
  Retirement accounts can just as easily invest in Vanguard funds, side-stepping the 'high management fees' issue of target-date funds. Picking is more dangerous when you're playing to retire vs. playing to build wealth. Further, your asset mix should become more and more conservative over time.
  - ironjunkie 8y ago
    That depends on your 401k. I agree that if you can switch to one with vanguard funds that's definitely the most optimal
    - arcticbull 8y ago
      I was suggesting rolling over at the first opportunity into an IRA
  - Spooky23 8y ago
    It depends on how you define conservative. The typical guidance is to shift towards bonds and short-term instruments in a fund or ETF over time. The problem with that is that the yields have been poor for many years. A nominally safe investment like the Vanguard Short Term Gov Bond ETF is down in real and nominal terms over the last decade.
- gammateam 8y ago
  don't forget about the mad gainz you get from an Ally savings account with 1.5% interest edit 1.75% extra tennis balls for your walker

eldavido 8y ago

Yes and no. I read in Brealey-Myers [1] that you can get 80-90% of the way to pure beta (market risk) by picking 15-20 stocks. You just have to pick ones that aren't super correlated, e.g. 10 pharmaceutical companies. Whether it's worth your time messing about with this is a separate matter entirely. [1] https://www.amazon.com/Principles-Corporate-Finance-Richard-Brealey/dp/0073405108 https://www.amazon.com/Principles-Corporate-Finance-Richard-...

JamesBarney 8y ago
>Whether it's worth your time messing about with this is a separate matter entirely. Yeah, transaction fees can really eat into your gains unless you're a very good picked or are interesting millions.
- gibybo 8y ago
  >Yeah, transaction fees can really eat into your gains unless you're a very good picked or are interesting millions. Buying 20 stocks would only cost you ~$120 (at $6/trade). For a $100k portfolio, that's an expense ratio of only 0.12% if you did it once per year.
  - justin66 8y ago
    Buying some amount of each stock once a year is probably not how you're going to be doing things if, for example, you want to keep your portfolio balanced to match your desired asset allocation. You'll probably need to make more trades than this. You're also more vulnerable to losing a bit of money to the bid-ask spread than Vanguard or Fidelity are.
- ericd 8y ago
  Eh these are trending to zero pretty quickly, and with buy and hold plus yearly rebalancing, you're not really doing that many transactions anyway.
  - zone411 8y ago

patrickg_zill 8y ago

I think that it depends on how close to retirement you are. Having a bad time with a stock at 35 is a different thing than if you are 64.

CPLX 8y ago

That doesn’t make sense. If you start with the premise that you are going to make said investment, and want to determine where, a retirement account can make a lot more sense given that the tax deferred status can eliminate problems with short term capital gains, buying and selling in the account, and so on.

jerguismi 8y ago

> It's a really bad idea to do stock picking, or any other risky investment strategy, with your retirement account, and a really bad idea to promote it. One company goes bust and suddenly you lost your retirement savings. Or your parents did and you'll have to explain them why they'll have to continue working in their 70s and 80s. Quite bad idea to have all eggs in one account, but with proper diversification the risks are lower.