Money to Invest

[ExGingi]

The chapters about this are spread around DDF.

I'll take the executive summary.

[aygart]

I'll take the executive summary.

Start here

[aygart]

Am not really looking to invest in stocks, mutual funds, life insurance etc. Am looking for a high risk investment, such as a small real estate deal, or even if someone's starting a business and needs a little cash to help him get off the ground. Things of that nature..

I, of course, do not know your full financial situation, but based on what you wrote here I would still say that starting a plan for retirement is likely to be the smartest thing to do with the money. Having the security which that money can give over the long term if invested wisely is likely to be more beneficial than placing it in a risky investment which will in all likelihood eventually, after rolling it into enough risky investments, end up disappearing. Using it to start yourself on a long term plan can be priceless.

[ExGingi]

I, of course, do not know your full financial situation, but based on what you wrote here I would still say that starting a plan for retirement is likely to be the smartest thing to do with the money. Having the security which that money can give over the long term if invested wisely is likely to be more beneficial than placing it in a risky investment which will in all likelihood eventually, after rolling it into enough risky investments, end up disappearing. Using it to start yourself on a long term plan can be priceless.

Highly recommended book along these lines: https://smile.amazon.com/Paychecks-Playchecks-Retirement-Solutions-Life/dp/098421738X?tag=cl03f-20 (full disclosure - I've never read the book, but I have met the author a couple of times, IINM I might even have an autographed copy of the book, listened to him, and he is very insightful and has some great ideas).

[aygart]

My bad, probably closer to 10%? Can't find the exact number. In any event if S&P isn't diversified enough for you, how do you recommend being more diversified? Whatever your answer is, there's probably a low fee index fund for that.

Diversification amongst asset classes. PORTFOLIO REBALANCING (which helps avoid the kind of risk currently presented by the FAANGs).

You can do this by investing in index funds such as various mid and small cap indices. It will then be important to be continuously rebalance.

There are excellent active managers out there. I know many will point to the fact that many active managers underperform the indexes, but while that might be true in a bull market, that won't last forever.

Another way of putting this is that the purpose of a manger is not only to realize higher gains but to manage the risk of the portfolio.

[hachover]

There are excellent active managers out there. I know many will point to the fact that many active managers underperform the indexes, but while that might be true in a bull market, that won't last forever.

The trend is against active managers, as you know, and it's because of the cost. I personally agree that in the long-term active management is worthwhile, but that's something people should decide for themselves. The percentage of passively managed funds is growing rapidly to a very uncomfortable level.

[hachover]

Another way of putting this is that the purpose of a manger is not only to realize higher gains but to manage the risk of the portfolio.

You left out the most important characteristic - due diligence

[ExGingi]

You can do this by investing in index funds such as various mid and small cap indices.

There are more asset classes than just mid- and small-cap indices. One can go high level - such as commodities - to enumerate asset classes, or go granular - grains/industrial metals/precious metals/etc. etc.

It will then be important to be continuously rebalance.

That's easier said than done. While technically anyone can create a spreadsheet to show them how to rebalance, or maybe even when to rebalance, I've yet to see people that do this on their own on a systematic basis. There are programs out there that will offer quarterly, semi-annual, or annual rebalancing, while balanced mutual funds will generally not go by timing, but rather allow assets to fluctuate within bands, and rebalance when out of band. It's important to find a manager that actually follows what they say they will do.

[aygart]

agreed

[avremie]

what are the community's thoughts on the future of FAANG?

[ADG]

Diversification amongst asset classes. PORTFOLIO REBALANCING (which helps avoid the kind of risk currently presented by the FAANGs).

There are excellent active managers out there. I know many will point to the fact that many active managers underperform the indexes, but while that might be true in a bull market, that won't last forever.

Thats an interesting way of putting things being that it is the money managers who's returns never outlast the market.

In regard to DCA, are you familiar with benjamin Graham (the father of value investing ), Jayson Zweig and the book- The Intelligent Investor?

[good sam]

Did not realize how many financial experts we have here. Lucky us!

[hachover]

Did not realize how many financial experts we have here. Lucky us!

People who write "u" instead of "you" save up a lot of time and become time experts. People who get good deals all the time save a lot of money and become investment experts.

[aygart]

Did not realize how many financial experts we have here. Lucky us!

I find that DDF has many who are experts in all sorts of fields. DDF attracts people who think through how to get around roadblocks and find loopholes and workarounds. Such people are also likely to do the same in other aspects of their professional and personal lives. This will make their opinions about these topics valuable as well.

[ExGingi]

Start here

I asked for the summary, not the unedited draft.

[Sport]

I find that DDF has many who are experts in all sorts of fields. DDF attracts people who think through how to get around roadblocks and find loopholes and workarounds. Such people are also likely to do the same in other aspects of their professional and personal lives. This will make their opinions about these topics valuable as well.

+1,
there are also lawers, doctors accountants and other professionals on here who have given advice, why wouldnt there be financial advisers too?

[ExGingi]

+1,
there are also lawers, doctors accountants and other professionals on here who have given advice, why wouldnt there be financial advisers too?

If there are any, they would probably be barred by their compliance department (or FINRA, or whatever agency oversees them) from posting specific advice here.

[good sam]

I find that DDF has many who are experts in all sorts of fields. DDF attracts people who think through how to get around roadblocks and find loopholes and workarounds. Such people are also likely to do the same in other aspects of their professional and personal lives. This will make their opinions about these topics valuable as well.

+1,
there are also lawers, doctors accountants and other professionals on here who have given advice, why wouldnt there be financial advisers too?

I'm sure you're both correct, just wondering if all those giving advice are actually experts.

Assuming they are, lucky us!

[skyguy918]

+1,
there are also lawers, doctors accountants and other professionals on here who have given advice, why wouldnt there be financial advisers too?

Right, but are there?

How many people that have commented in this thread are actual investment/financial planning professionals of any sort?

ETA:

I'm sure you're both correct, just wondering if all those giving advice are actually experts.

Assuming they are, lucky us!

Not sure how I missed that, it was posted before I started my reply.

[Sport]

I'm sure you're both correct, just wondering if all those giving advice are actually experts.

Assuming they are, lucky us!

They seem pretty knowledgeable to me, definitly provide a good starting point for someone asking on a forum. As with  all advice on forums, you still got to do your own research but at least it provides some context or focus.