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  • Showing only topics with the tag "investing". Back to normal view
    1. Non-profit endowment creation

      Hi Friends, I'm in the (very) early stages of creating a financial endowment fund for a small non-profit community organization I help out with. I feel they're a good fit for such an investment...

      Hi Friends,

      I'm in the (very) early stages of creating a financial endowment fund for a small non-profit community organization I help out with. I feel they're a good fit for such an investment vehicle: their current revenue stream fluctuates a bit and many of their events rely heavily on attendance fees for funding, which is unrealistic when they attempt to cater to lower-income demographics. However, they have a relatively wealthy patronage that tends to remain involved for years or decades, and I believe they have the institutional stability to operate more complex financial instruments.

      I pitched the idea of an endowment at a high level to the Chairwoman last week, and the Board is interested in moving forward. We haven't decided how exactly we want to structure the endowment yet: restricted endowment, quasi-endowment, etc. We also haven't determined exactly how much money we should fundraise for a principal investment, what our portfolio spread should look like, and how much of the annual interest we can afford to spend. (I have estimates, but they're not final.) I'm particularly interested in resources that can help the institution plan for inevitable economic downturns.

      Has anyone here done this kind of work before? If so, would you be willing to chat about some of the nuances of organizing it, and/or do you have recommendations on reading material to help with the creation and maintenance of such a fund? We plan to receive consultations from an accountant and a lawyer, but I don't have much formal background in finance and would welcome any experience, advice, warnings, or external resources Tildesians can offer.

      Thanks,
      Atvelonis

      10 votes
    2. Some companies like vanguard and blackrock/ishares exclude losing companies from price to earning ratio calculations, where can I find reliable pe numbers?

      For example Vanguard Russell 2000 Growth ETF shows a pe ratio of 19.5 on it's portfolio page, but etf.com (which reportedly calculates PE ratio in the "logical" method we probably all think of)...

      For example Vanguard Russell 2000 Growth ETF shows a pe ratio of 19.5 on it's portfolio page, but etf.com (which reportedly calculates PE ratio in the "logical" method we probably all think of) says it's 236.89.

      There is also the russel 2000 etf, which shows 14.3 on vanguard and 43.63 on etf.com (I saw no clear indication on the vanguard website they are removing losing companies), ishares does say that for it's etf.

      I want to know the PE ratio because economic bubbles (like the dot comm bubble and japan stock market bubble) were characterized by very high pe ratio, and there is historical evidence low pe performs better (probably because of the optimism bias).

      I can use etf.com, but would like another source to validate etf.com is reporting correctly .

      11 votes
    3. IWTL financial literacy

      It's a very hard topic to research lately because of the crypto-bros lately and it's very hard to trust a stranger on youtube spouting financial advice. Can tildes suggest any must-read books...

      It's a very hard topic to research lately because of the crypto-bros lately and it's very hard to trust a stranger on youtube spouting financial advice.

      Can tildes suggest any must-read books and/or resources to become more financially literate?

      Background: I'm a software engineer from Germany, I'm making decent salary, but I've always been incredibly bad with money. I just spend what I need and almost never look after my financial state. The result, as you can imagine, is a very low rate of savings and a lot of unrealized gains.

      Honestly, it's kind of embarrassing to ask, I lucked into a great industry, but has been so irresponsible with my money, I guess the first step is acceptance.

      8 votes
    4. If you were going to start investing more ethically, how would you go about it?

      Over the past few years, I've become increasingly uncomfortable with continuing to invest in broad market index funds, given the bulk of my money is being invested in industries or companies that...

      Over the past few years, I've become increasingly uncomfortable with continuing to invest in broad market index funds, given the bulk of my money is being invested in industries or companies that actively go against my moral beliefs, e.g. Facebook, Wal-Mart, fossil fuel companies, etc. There are "ethical" index funds, but I've had a hard time finding ones that are broad and fit my beliefs (e.g. Vanguard's ESG funds exclude nuclear energy), but there are ones that are close, so maybe this is a good option. I also could invest in specific companies that fit my goals, but my pool of money is small enough that that would be pretty risky.

      Of course, the caveat of all participation in the stock market is some shade of unethical applies and that my individual choice would be drastically overstated if compared even with a drop in a bucket, but if my goal is to minimize my harm while still growing my savings at a rate slightly above buying bonds, what would you do? Assuming that becoming a landlord is also off the table. Are there ethical investment options you like or participate in? How have you navigated this with regards to your own personal philosophy?

      17 votes
    5. How to best utilise 5k GBP

      Hey everyone, as a goal for this coming year I’d like to better put to use the small amount of savings I have. My first idea is: 3k emergency fund in a NS&I Government insured account. 2k in a...

      Hey everyone, as a goal for this coming year I’d like to better put to use the small amount of savings I have.

      My first idea is:

      • 3k emergency fund in a NS&I Government insured account.
      • 2k in a Vanguard index fund.

      A few questions:

      1. Is this sort of setup the best use for such a sum?

      2. If so, with the impending brexit, does it makes sense to move the money out of the U.K?

      3. Is there much maintenance with an index fund or is it sufficient to let the money sit? I’m aware anything of this nature is essentially a gamble.

      4. How do you calculate a worthwhile amount to invest considering the on-running service costs?

      5. Does anyone have experience with ethical index funds? If so which? And how have they performed for you?

      Any help is most appreciated.

      11 votes
    6. A Financial Book discussion - Because we don't have a ~money sub yet

      I'm re-reading through some investment books right now and thought I'd throw one them out here with my thoughts and questions. Investing and the Irrational Mind: Rethink Risk, Outwit Optimism, and...

      I'm re-reading through some investment books right now and thought I'd throw one them out here with my thoughts and questions.

      Investing and the Irrational Mind: Rethink Risk, Outwit Optimism, and Seize Opportunities Others Miss

      by Robert Koppel

      The title of this one intrigued me. Author Robert Koppel is a former investor/trader on the Chicago Mercantile Exchange. He covers a lot of research on what psychologists have discovered about biases and irrational thinking, particularly as it relates to investing and trading. He's also interviewed many other investors and offers his own observations from extensive experience.

      He goes back and forth between having and investment plan and using intuition, which as it turns out are both tactics investors have used. I think the valuable part of this book is the way he ties in research by Nobel Prize winner Daniel Kahneman and others on biases to what happens when we make good and not so good decisions in finance. An example of one of those common pitfalls:

      We also experience a reflection effect whereby individuals make irrational choices to enter or exit an investment based on a subjective reference point determined by whether they have already experienced a gain or a loss. An example of this would be someone waiting for a “breakeven” price before exiting from an investment that is performing poorly rather than looking at the market objectively, without reference to the purchase price.

      The book isn't so much an investment strategy but rather a good overview of what's involved in the process. As someone who has handled his own investments for years, I found that Koppel's book is realistic and practical, especially for those of us who've had to make those hard decisions on buying and selling, either for the long term or short term.

      My own particular problem is watching things too closely and losing a sense of longer term movement. Investing And The Irrational Mind is a great tool for giving me pause and reflecting on the mistakes I've fallen into over the years.

      Even as basic a rule as "cut your losses short" is hard to follow and really give me pause to think about issues I've held onto for too long as well as others that went on to go up and away. I've love to hear your thoughts.

      6 votes