Investment club?
Any interest in forming an investment club?
We would meet regularly (TBD), learn techniques from each other, pass on knowledge and experience, and present our individual analysis.
The chair would keep people on track in between meetings, encouraging the hard work of spending your own time researching duds in the hopes that one of us finds a potential gem for us all to enjoy.
Theoretically, we would want to research company stocks that are easy for all to buy, so I would be interested in a group based upon major US indices. However, this thread could potentially be used by others to form their own group buying from other markets.
Edit: alright, I'm sending direct messages to those who expressed interest in wanting to contribute. Those who expressed interest in learning will potentially be able to learn with however the group decides to communicate to Tildes.
If you are interested in participating, you can leave a comment here or send me a message for now. Thanks!
I would read every thread that came up, but unfortunately my investment strategy is just to buy VTI with my “extra money”. That is to say, I can’t add much, but I’d like to consume the knowledge and discourse.
Probably the best strategy out there anyway haha, everything else just feels like gambling in today's incredibly irrational market.
I actually switched to this from using Wealthfront. I had them robo-invest for me for 5 years with 3% return while VTI made 10% in the same time. So I said screw out and dumped into VTI and never looked back. I’ve had 10% return YoY for 5 years now.
That's definitely a good set it and forget it strategy as mentioned.
I was thinking internal discussions would be private, but I can see an avenue where the final pick for that month or whatever is posted along with the reasoning.
Never hurts to get other people interested in a stock you just bought!
Is there any fundamental different between VTI and VTSAX. I’ve been putting money into VTSAX. It seems like one allows you to day trade and with VTSAX it’s settled at the end of the day?
TL;DR no difference
VTI is an exchange traded fund. You buy individual shares of VTI on the market. You don’t even have to invest through vanguard to get VTI.
VTSAX is a mutual fund. You put a specific dollar amount in, it is pooled with other users, and invested in a specific way. The management strategy is up to the fund manager.
In this instance, both are managed in the same way, so no difference. Although the mutual fund, specifically the admiral funds with a minimum investment amount, tend to have a lower management fee.
The taxes are a bit different since you normally don’t pay capital gains on an ETF until you sell. More here.
I feel the same way. Almost all my money is in no-load indexes averaging 15% YOY but, like, I'd at least look. I have a separate much smaller account where I can take some chances.
I'd also be interested. The way this thread reads to me is that most people are in the same boat as me: willing to learn but too inexperienced to offer knowledge themselves.
So perhaps it would be a good start to build a sort of knowledge exchange that starts with some basics so nobody is left behind and then build from there?
That's great for sure.
It's entirely possible that after every pick the group would post a write-up about the research process and what we liked enough about a company to decide to invest.
With that, other interested people could take a look to see how we came up with our decision and apply that framework to their own research!
I like the idea of a knowledge exchange that was mentioned. I can pitch in a small amount but my advice will be really boring--S&P500 and Vanguard Retirement Funds --but could be valuable for people starting out on the how and why.
For the investment club I have a small separate account I keep for moonshots but is the goal here technical or fundamental analysis? Both? Neither? Vibes? 😜
The goal wouldn't be day trading or 100% vibes. The research period is too long. There would have to be a good fundamental case to be made. Technical can play a part, similarly with vibes, because you have to feel good about it. But the idea in my mind is to hold these stocks for quite a while, easily over a year.
I might come up with a stock that I think will double in the next two years because (just throwing out random stuff) if a recession hits the company is positioned to make out like a bandit but if there's no recession they stay flat. That forecast is based on x, y, z. (So potential growth)
Or somebody finds a value stock that is unfairly being punished for something that recently happened, based upon the analysis done. Plus the CEO and exec team have a strong background in everything they need to have to turn the ship around. We poke around a little more at the market/competitors and all agree there's no reason for the stock being undervalued, so we commit.
There may be a stock that somebody sees as a fire sale and we all jump in to review and make a quick vibe decision for anybody who wants to get in on it. Who knows!
All that makes sense, and fair enough. But I'd be remiss to not ask since this is something you're looking at spearheading: what's your background in this? I'm not looking for a specific answer, just curious.
I work as a fractional CFO, and I have made and lost plenty in my fun side investments over time. I constantly analyze my clients' businesses and help them with valuations. I'm no stranger to index funds, individual stocks, bonds, commodities, and options. Read a bit about forex but never dabbled. I have done well in crypto but don't want to do anything at all with that here.
I think gathering a group of people with different areas of expertise and interest will help bubble up great stock picks I would not have thought about on my own!
Alright, I'm in.
I'm an extremely conservative investor but like I said, I have some "fun money" I can play with, and none of it is crypto or will be. It could be useful to give some basic advice for people starting out as well as collectively doing some fundamental analysis on prospects and see where it goes.
Same for me. I’m more interested in the process, discussion & opportunity for learning, rather than the individual trades the group eventually settles on.
I would be very interested in eavesdropping as a read-only member. My <$500 (total combined) picked stocks are -10% so far this year, so that should probably disqualify me from joining.
Naa, not every stock will be a winner. No disqualification, just more research/learning encouragement!
If somebody brought a pick with a good feeling, my thought is we'd all dissect the company to come up with a group consensus. Then anybody who still felt good about it can go invest whatever they want into it.
We would keep track of the stock price from that point on, and revisit the company every once in a while to determine a potential exit.
Sounds fun, I'm in if you'll have me. Would love to learn how to analyze the financial health indicators of a company.
I'm with you, @shadow I think it would be cool to let people share and do the research, along with tracking the list, but let people participate as infrequently as they want (including read-only).
It might also be helpful to intentionally list our past dud stocks and possibly understand what led to that outcome.
However, my unease with most of the stock market is that value is ultimately decided by speculation of perceived value and value potential. So a routinely profitable company making a very modest but stable profit could see some strong dips due to external factors.
I would enjoy this. While it makes most sense to invest in a ETF, it’s more fun to have some other smaller bets as well and keep it interesting.
I’m UK based (and use a tax free ISA) but generally can still buy most stocks globally I look at
Yes, that's the idea. I'm not taking about my entire retirement in one stock picked from this group. But a reasonably meaningful "extra" amount spread out over a dozen picks or so, have a couple losers, majority flat-ish, and one or two 5x-10x and we're good!
I was just about to start spending a few months to learn all I can and begin my investing journey from scratch, so I'll happily lurk and maybe ask a noob question or two.
I do a modest amount of stock research and have some individual picks outside of index funds and broad-based industry ETFs. However, I'm gradually winding down market exposures since I'm likely to retire in the next ten years. U.S. based, and I have a middling-firm belief that the bubble will deflate quite soon.
I'll happily spectate and speculate, but Motley Fool is a generally good source for those interested in growing wealth slowly.
I'd definitely be interested in joining. I'm based in Ireland.
Depending on final interest, it may be the case that we're all spread out!
If you can also pretty much buy anything global like @Chiasmic then location may not be as big of a factor as I was initially thinking.
Could be better in that we are all exposed to companies we would never have researched on our own!
For sure! I think a global club would absolutely work. Most investment opportunities are listed on both US and EU exchanges (I'm assuming the same is applicable for other exchanges across the globe).
I happen to enjoy this stuff a lot, and I would love to see more investment-based discussion on Tildes. There are a few problems that I can see though, relating to the scope and intent of the 'club'. How exactly would this club look like? would it be similar to the other ones on here, like the Book Club or the Retro Games Club where each month or so there's a new topic to discuss?
However, different people have different goals, comfort zones, experience levels, preferences, etc., so it's hard to have a one-size-fits-all approach to investment. I think the scope of this club would need to be pretty general to cover people in various situations. Like a 20 year-old in college will probably have very different goals than a 60 year-old thinking about retirement. Or someone that makes 30k a year vs someone making 200k a year. Or someone with no experience investing who puts all their money in a savings account vs someone who day-trades options contracts for a living.
If it is to be a regular thread (weekly? monthly?), maybe having an ongoing vote somewhere as to what the next topic should be to keep things adaptable to what people are interested in talking about rather than having a fixed list like the Book Club or Retro Games Club. In those other clubs, it makes more sense to have a fixed list, since people need time to acquire and read/play those titles that will then be discussed, which doesn't necessarily apply to an investments club.
I think we could aim for mostly analysing a company and agreeing to not invest at all if it looks subpar, or at mosf invest a limit of very small amount like $20, or very small percentage of discretionary income, so that a college kid and a fund manager has basically the same degree of exposure for educational purposes. It's not about expecting anything to go to the moon, but learning and practicing how to keep cool heads and not take unnecessary risks and to hold becausd we would see even good ones take a dive sometimes, and learn when is a good time to exit without too much greed
So maybe even one company a month would work
Fair enough. After reading through a lot of the other comments in this thread, it seems that I have mistaken what the aim of the club would be. I thought it would be more like the weekly 'what movies/shows/books/anime/manga/games have you been watching/reading/playing" threads but maybe with a little bit more direction. But seems like the consensus here is more about researching individual stocks and/or etfs and analyzing whether they are wise investments or not.
Heck maybe both types could coexist. Like there could be a weekly "what have you been investing in?" thread or something like that as well as an investment club focused on specific picks.
Heck yeah! :) why not both
I'd be one of the lurkers of the club to gain knowledge but since this topic has been opened I may as well ask here.
I know the very basics of investing so if anyone has a investing for dummies video or guide they could point me to I'd really appreciate it.
I'd be interested. I started a Roth IRA a few years ago. It's up to several thousand now, which is nice. 2/3 of it are in a lifecycle fund, but I have started branching out into other index funds. Mostly just based on the little bit I've seen on boggleheads or r/personalfinance.
I have started putting money in a taxable account recently, currently a few hundred bucks, but it's just sitting as cash. I don't really know what I want to do with it. Or what I should or shouldn't do with it.
I wouldn't mind learning more.
A roth ira is definitely a great start! And yeah I'd definitely do something with that money in the taxable account. You might want to check out if said taxable account (I'm assuming a brokerage account?) has options for where to park your cash. Some give you the option of just holding it in cash (meaning it won't grow or shrink or anything), vs investing it in some sort of money market fund (which provides you with ~4% interest annually). Usually it's a simple as a few button clicks in your options or preferences or wherever, but that way you won't feel like you're missing out on anything since you'll be actively getting something in return for having cash in the account.
Oh yeah, the cash account is SPAXX. I think there was another option, but its basically the same thing, yield wise. Think it's like 3.91% right now. That's even a little higher than my HYSA. Think I'm getting like 3.5% over there.
Perfect! Yeah my first real job out of high school I earned a little money in a 401k, then I left that job and rolled what little I had in there into a roth ira. But like.... no one ever told me I needed to do anything with that. So for like 2 or 3 years that money just say there, no different than if I had cash under my mattress. It was only after I started learning about stocks and investments and interest and all that stuff that I realized my mistake and actually invested it into VOO or something. Wish they would teach this sort of thing in schools more, rather than letting people trial-and-error their way into financial literacy.
The more people I talk to people about school and financial literacy, the more I find that I lucked out. My high school required a one semester personal finance/success class for seniors in order to graduate. Credit cards, car loans, apartment leases, resume writing, job interviewing, and even basic retirement stuff, among other topics. Like ALWAYS taking the 401k-types employer match, if provided. Opening an IRA ASAP (which I didn't).
Of course, it didn't go into what we should be investing in. Which I guess makes sense since everyone's risk appetite is different. Though at least basics would've been nice. I don't remember anything about stocks, bonds, ETFs, mutual funds, etc.
Though the middle school I attended did have a "Stock Market Game" club. And so I did learn a little bit about the stock market and investing from that. In fact, the game was a competition among area schools. Which my team won! Though being so young, and playing with fake money, it's not like I retained a lot of that knowledge. I remember learning about stock splits., buying on margin, short and long positions....and that's about it.
Which made me remember one class from college: an Engineering Business & Finance class. It was required for all in the college of engineering. Talked about accounting concepts, P/E ratios, EPS, dividends, and other things. I didn't do too hot in that class...
All that to say, I still don't know what I'm doing, even with all of that 😅
That's part of the problem though. I too had an assignment like that in middle school where we had imaginary incomes based on our grades in the class and we had to create and stick to budgets and plan vacations and discretionary spending. But like... it was all a game to us. Everyone just fucked around with it. I remember purchasing llamas as my discretionary spending because 13-year-old me thought it would be hilarious. It's hard for kids to grasp the seriousness of interest and debt and credit cards and investment returns when they're probably not going to need to use that knowledge for at least another few years.
Around the same time, I'm pretty sure I learned about compound interest in middle school Algebra class. But like when the fuck is a 13-year-old going to use compound interest in his daily life? So I learned it, passed my tests. Then forgot it all by the time it would actually be of any use to me in my 20s.
In high school I took an AP economics class and really all it taught us was supply and demand and Adam Smith. More theoretical than practical day-to-day knowledge.
Then in college I remember taking an intro to business course and it focused on those same things that you mentioned: P/E ratios, dividends, stock splits.... A bunch of stuff that might be useful to know as a manager of a large company, but not so much for the average Joe.
Yet despite taking all these finance/business/economics related classes throughout my life, at no point did anyone ever explain to me what an APR was. Teaching kids/teens about credit cards, compound interest, different types of debt, and maybe a little bit about taxes would go a long way towards helping kids not fuck up their lives as soon as they start earning a little money (or even before then in the case of student loans for college).
Side note, but this all reminds me of a Spanish teacher I had in elementary school. He would introduce some vocab words on Monday, then spend Tuesday, Wednesday, and Thursday ranting about stuff, then quiz us on those words on Friday. Sounds dumb, but the stuff he would rant about was often real-life problems and issues. Like how the school bought pizzas for $5 each and then sold each of the 8 slices to kids at the end of the school day for $1 a slice. Or how unhealthy pizza was in general and how it was irresponsible for the school to be feeding it to us constantly and hyping it up with pizza parties. He taught us to read the nutrition labels on the backs of food products and how to understand what serving sizes were and how food manufacturers can trick you by making the serving size super low. To this day I still actively check the nutrition labels on everything I buy or consider buying in the grocery store, watching out for saturated fats and trans fats thanks to this wacky Spanish teacher I had when I was like 8. He got fired a few years later (probably for not teaching much Spanish, lol) but he had more of an impact on my day-to-day life than most other teachers I can recall.
Up until 2022, interest rates were very low so it didn't matter much what you did with cash. I think a lot of people got caught out by this.
True for things like money market funds, treasury bills, and hysa's that are tied to the federal interest rate, but those 2-3 years could have been much better spent by being invested in an SP500 index fund like VOO or SPY.
Yes, that’s usually true. A money market account is appropriate for an emergency fund or if you have a plan to spend the money, such as saving for a down payment. Or just because you don’t like the risk of being all-in. The stock market has been very good to me, but I’ve always had a large cash position as well. (“Cash” speaking loosely; it’s actually in a money market account that invests in US Treasuries.)
For an investment in the stock market, you have to be prepared to wait years for it to come back if it goes down. After the 2008 recession, SPY took until 2013 to come back again. After it went down in 2022, it took a year. And most recently in April, it took two months to come back.
I remember people on Tildes being very worried earlier this year. Few people are willing to buy at times like that, even though in retrospect, it was a good time to buy, not sell.
Sounds good, count me in
I'm also interested, much like most others here, with very little actual experience.
Long time lurker, brought to the surface for my first post/comment. I echo the sentiments of those with limited experience but I am fast learner and would love to figure out how to translate my knowledge into actionable trades. Very excited to see this. Thank you!
Welcome!
@shadow , sounds like there's a lot of interest! While not your original intent, I think if you wantes to start public threads on how you go about dissecting a company, you'd have ready readership here. Maybe even a finance bookclub, to piggy back off @dustylung 's comment
I just may take you up on that. I'm really just beginning to develop my strategies for looking at individual companies, but like many others, my interest began in the church of John Boggle.
I lean into my ignorance on much of the finance world and look up everything, knowing I won't retain all the information but it helps to get into the practice and develop that habit. For this, Investopedia has been an invaluable source.
I'm in no position to be giving investment strategy advice, but I wonder if a starting point for a club might be with recommended readings rather than discussion of specific investments*. Personally, I would recommend anything related to the efficient market hypothesis. Burton Malkiel's Random Walk Down Wall Street is hard to beat on that topic. ( *although I too recommend VTI/VTSMX/VTSAX. )
Sounds interesting. The research aspect could be a good way to keep up on things like battery tech, retail trends, etc.
I'm interested on the chance that one day I can afford to invest (preferably in time for it to do me any good), & also because while I've never had the capital really other than some good luck with crypto 2020-21 (not that good) I've definitely picked up on some vibes before that would have been extremely profitable had I had some extra cash at the time; I think I'd do real well on draftkings lol, but this seems more practical.
Even if it's $50 a month, it's better to have it in a tax free long term savings account than a regular account. But I understand many people need to build a withdrawal-penalty free emergency fund first
Yeah life so far has just been the smashing-the-piggy-bank scene from Up on repeat lol—one day™
You'll get there! :D rooting' for ya. Carl eventually made it to South America afterall
🥲
i would love to join as well, in my free time i am trying to learn about personal finance. I have some knowledge in ETFs which i can share happily.
I would be interested in Learning also - thanks!