Ask HN: What are some good ways to invest? | Hacker News Reader

Ask HN: What are some good ways to invest?

16 pointssjperez19 comments

If you had a moderate sum of money to invest in the current climate, what would you do with it? Stocks? Mutual funds? ETFs? Real estate? Something else?

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Bogleheads has a lot of advice about investing in a low cost, relatively low risk, relatively simple way:

https://www.bogleheads.org/wiki/Getting_started

If you sign up for the Bogleheads forum & follow the template to describe your financial situation you will likely get some reasonably good feedback & ideas.

I would check out the book "The Simple Path to Wealth", or the authors blog at jlcollinsnh.com and read up on his suggestions. Its all about mutual funds and low risk

Depends on your situation. This is essential first reading imo: https://en.wikipedia.org/wiki/The_Intelligent_Investor

If you still had questions and more money than the average bear, find a financial professional.

Thanks! I've officially added it to my reading list, along with Rich Dad Poor Dad and The Richest Man in Babylon. I wish I had done more to become financially literate earlier on--I don't think anyone ever talked to me in school about financial literacy and now I'm in catch up mode.

I wouldn't necessarily read "Rich Dad Poor Dad" or "The richest man in babylon". You might find better books about personal finance by:

- searching recommendations on HN, e.g. with a Google search like "site:news.ycombinator.com investing book recommendations"

- searching recommendations on the various subreddits like https://www.reddit.com/r/investing/ and https://www.reddit.com/r/personalfinance/ (search for book recommendation threads, or read their wikis)

- on the BogleHeads website : https://www.bogleheads.org/wiki/Getting_started

Good luck :)

Depending on your time horizon, I recommend 3 pots:

1) Need in the next 1-2 years - Money market account

2) 3-7 years - value funds (either ETF or Mutual funds)

3) 7+ - growth funds (either ETF or Mutual funds)

Individual stocks take effort to watch. Make sure you do not buy just before a dividend (you will pay tax on the money they give back to you). Watch for bad news, so you can pull your money before they go bankrupt.

ETF are lightly managed, your money grows as that segment grows. Which is not a bad idea.

Mutual funds - someone is actively watching it. Which can hopefully mean it avoids a bad turn, but it can burn money being churned.

Safest bet is an EFT that tracks the S&P 500

I expect Real Estate funds to take a gut punch when things open up and the businesses fold and they have no rent coming in. So I plan to put money there, after it falls.

Thanks for your comments--I'm curious about real estate funds and have been looking into REITs, but your point about what happens when things open up is a good one. I've been looking at Fundrise and similar services but I have such a knowledge gap about real estate that I'm not sure I could make smart decisions on individual funds. I'm willing to tolerate some risk, but need to get smart on the involved issues first.

Money markets aren't looking so hot lately...

Money Markets never look good, but they are 1) better than a savings account at the bank 2) less likely stolen by a relative when hidden under the mattress.

Money markets typically pay just better than inflation. Not so much a place to get rich, as a safe place for the money over the next year or two.

Reddit r/stocks and r/wallstreetbets can be pretty informative.

r/wallstreetbets is a joke really. Funny but no good advise there.

r/options more beginner friendly for gentle advice. wallstreetbets will haze beginners a little more, and speak in meme, so you need thick skin, and some lurking before you get a feel. But there is a lot more information on wallstreetbets by sheer volume of comments. It’s Ranked 8th on reddit based on number of comments: https://subredditstats.com/r/wallstreetbets It’s become my second home away from hacker news for consuming information.

Yeah, I wouldn't ask too many questions on wallstreetbets, but it can be useful to read.

Actually, it gives you insights to how some people think/act in the market. Sometimes you can inverse their advice and make money.

The most important rule is: buy low, sell high. If you don't do that you just spending money.

In order to accomplish that rule you have to generally do the opposite of what is popular, but in a meaningful way.

When the market began crashing I sold shares from my healthy mutual funds and bought a lot of stocks in airlines and cruises. People aren't going to stop flying. Eventually those markets will recover and I recently bought shares at about 25-33% of their recent value. Now I just have to wait out the pandemic and for business to return to normal.

Are you concerned that the airlines might end up declaring bankruptcy? Or do you think the government will bail them out? As of right now, it's my understanding that they're operating at unsustainable losses, absent some kind of intervention.

It's lottery, not math. So even if the parent answers this or that a diversified portfolio, might save some skin but no one really knows what's going to happen - and if someone does, it's most likely illegal.

The cruise industry has it even worse. I am betting that at some point in the future business will resume and people will travel. There will still be airlines and its less disruptive to keep the current players in operation than to float new ones over the corpses of these giants. It takes an astonishing level of liquid capital to spin up an airline that is more than merely a regional player.

I think another concern you might have if you are a potential investor is some private equity fund offering a large sum of cash for newly issued equity. This would give the airlines the cash to remain solvent but significantly dilute the current shareholders.

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