Where to put your $$$ - advice?
Looking forward to starting my BB analyst stint at a sub-NY cost-of-living city
assuming bottom-bucket bonus (just being conservative), saving most of my $$ during 8 weeks training, utilization of a shitload of tuition tax credits, etc. I'm projecting to tuck away $50-60k after tax for the year.
I'll be honest, in the past I've only put my money in savings accounts avg. 2% p.a. , just wondering what you wiser, more experienced monkeys have done in the past/are planning to do.
ex. buy rental property, ETFs? Anyone still actively trade even w/ 30-day holding requirements?
happy v-day hope everyone's getting some
You could consider MLPs as an investment idea. Pay off student loans? Or maybe start an IRA. An IRA is a solid bet, insofar as the earlier you start, the better off you can be.
Write this down. Put every penny in AAPL. This stock will hit 1000 within 2 years.
Wrong.
I am skeptical about iTV/ability to penetrate emerging markets. US market is getting close to tapped growth-wise.
Apple TV is actually pretty sick — 3 at my casa. Definitely agree about emerging markets. If only the $1000/share was guaranteed...
Buying a property could be real interesting depending your market, but I would live at the place you buy instead of renting it out. Renters are a hassle you don't want to deal with as a BB analyst.
Otherwise, I would do basic index investing (bond funds, broad sector ETFs) with at least 50% of what you save and take bigger risks with as much as you feel comfortable with. Do your index investing inside a tax-advantaged account and let that be your safety net. Try to keep your holding period over a year for investments held outside tax-advantaged accounts.
Always keep in mind the two biggest obstacles to wealth preservation: taxes and inflation.
Buy:
Gold Silver MLPs Foreign Stocks (China, Brazil, Singapore) Guns Ammo Food
Sell:
Everything else
This, and I really hope manbearpig was being sarcastic
IP has some great advice. I started a Roth a few years back and that has been pretty successful so far. But, like IP said, I have started out doing basic index investing because its a good way to start out.
@UncleMilty, was talking about upcoming, rumored iTV (an actual TV, not a wireless content streamer like Apple TV) - supposedly with a 2012 launch date that many are hoping will be another AAPL blockbuster
@IlliniPride, thanks for the advice. the only problem is that if I buy a place to live in I would have to live in a much lower-end place than what I can afford by renting. Still exploring the option though but not being able to walk to work may kill the idea :(
Agree about the hassles of tenants though. I'm a tenant now in a college house and I feel horrible for our landlord.
Wait, wait, an actually Apple TV? Holy mother of gawd. That would be gorgeous. Not sure if I'd buy a $500/share stock on rumors of it though... Also, don't take the zero hedge approach to investing 100%. That would be neglectful of the potential of American equities.
Again, I suggest a Roth IRA to the OP.
I don't think you want to make it too complicated when you're still working as an analyst. Find a low-cost and reliable ETF-provider and invest there with geographical diversification on a monthly basis. At the post-analyst level you can start thinking about something more complicated.
IRA investing in mega-cap companies with 3+% dividend yields. Have your broker reinvest the dividends automatically.
In 30 years is VZ going to be higher or lower?
Higher.
Now factor in dividends, possible dividend raises, and reinvestment of dividends.
Now that's building wealth.
People need to understand this is not a normal rebound cycle where you should pile into equities because P/E multiples are low, the earnings are wrong. You can't have massive government spending and stimulus and call that growth, it's not. Think about the bubble we created with 1% rates for a couple of years, now just think of the damage we can do with 0% for 6 years. And just because prices are rising doesn't mean there's no bubble, if prices should be falling, and they remain even stagnant, that's a bubble.
"The thing to be concerned about over the next 5-10 years is not return on capital, but return of capital". -Kyle Bass
Start calling as many CEOs as possible on your desk phone and ask them where to put your 50k.
You can put it on share business but it is necessary to know about the share business otherwise you may have to face the trouble
I am the proud owner of 300 shares of AAPL at an average cost of 185. People have been pessimistic about the stock since I started buying and it's no different now...
The risk/reward profile now has changed. It's probably the best run company on earth and may very well hit $1000/sh or $1 trillion market cap in the next few years, but is that really more likely than BAC or C doubling?
I think not.
Congrats on the trade, that's pretty sick not gonna lie. AAPL is very well run and the valuation on a P/E basis is not very high. Add to that the potential for dividends (what else are they gonna do with $100bn in cash??) etc. and it seems like a great deal. That being said, it has entered the parabolic stadium, and all parabolic moves eventually end. See Nasdaq, crude and most recently silver. Sure, stay invested, but don't tell anyone to put their entire savings into one stock, esp. not one that is due for a major correction.
I think it's still severely undervalued. A trailing PE of 14 where extremely conservative growth estimates are 50-60%? This stock should already be priced in the 700 range.
.
2012 is going to be a very nice year for stocks. Get in. Get out.
I would watch out after the election cycle though... I think we will see another bust in 2013. Be aggressive in 2012, cash out, and wait until you see the dump and go back in.
Agree 100%. 2013/2014 are the years of living dangerously.
proud owner at an average cost of ~$90
after obama gets elected though, too much incentive now to keep general markets going
http://www.forbes.com/sites/thestreet/2012/03/15/how-apples-stock-could…
OP - don't you wish you had listened to me? You would have been up 15K on your 60K if you had put it in AAPL. Up over 26% since then.
You guys think dividend-paying companies are gonna get face f*cked after Obama raises the dividend tax from 15% to damn near 50%?
I'm only bumping this to brag about my predicting abilities :)
The stock is up a whopping 40% since I offered my advice. OP would have been up nearly 25K in just 7 months.
JeffSkilling - this might be a good time to start planning that party.
update: 6 months into my BB stint savings have been strong.... but that pile of cash is still just sitting in my savings account looking lonely...
i find that the biggest problem young people have with investing is that they have no idea of time horizon... I really don't know how long I'll be earning this (high) level of income - so I have no idea when I'll need to pull my $$ out. As everyone knows, this really affects what types of investments are appropriate. I'm also really risk adverse - god knows we work hard for this $ so its tough to put it at risk....
so with the year almost done it looks like 2012 has been a good year. people still wary of 2013/14?
Assuming you contributed $5k to the Roth (dividend stocks or high-yield bonds, because of the tax shelter) and maxed out the 401(k) contribution ~$17k pre-tax already (growth or value equity fund, you want something that will produce capital gains for maximum benefit from tax deferral)? Those are so tax favored that time horizon becomes much less relevant assuming you have minimum liquidity.
The rest of your savings (like ~30k) should go into a liquid rainy day fund (money market fund, savings or even high-yield checking if you are lazy) since you have fixed outflows for your rent/food/loans. Once you hit one year of living expenses, you can put the rest into a brokerage account and start diversifying your holdings with commodity ETFs, REITs or MLPs as you see fit.
1 year of expenses for a rainy day fund before throwing any money into a regular brokerage account? That's really conservative. Most recommend 3-6 months.
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