Is there anyone at MakerSpace that might be interested in forming a stock market or investors interest group? Aim would be at researching stock but not actually handling money or investments.
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You could count me in for something like that. I have no expertise to offer, but would find this interesting.
I would be interested
I’m interested in this as well.
Is there anyone at the Space that has some knowledge in this area?
I was a member of an NAIC investor club for many years. You can find the information here on NAIC: http://www.betterinvesting.org/public/default.htm
There are no fees per say but there are materials and software that you could purchase from NAIC. The basis for the club is that a group of people can investigate stocks to purchase better than a single individual. Other premises are 1) long investing 2)the purchase of DRIP (dividend reinvestment) stocks 3) focus on certain fundamentals like growth potential, leadership, cash position etc as the basis for investing in a stock 4) purchase in bulk to reduce commissions. Meetings are held weekly to decide what to buy. In our case we all chipped in $20 a week to the club to buy stock. $80-$100 a month times 20 member is a couple grand a month to invest. Accurate accounting was done to ensure proper distribution for all members.
In the club I was the president of we had 20 members, managed the purchase of stocks for about 10 years and averaged about 6 to 8% return per year over the 10 year period. This is not spectacular results, but keep in mind that part of the club’s mission was to teach investing principles and some members were much more conservative than others.
You have to know when to hold 'em and when to fold 'em as they say. The real fun in the club was 1) learning about the markets 2) socializing with people in the club and 3) making a little money at it. We dissolved the club after a number of the members decided to move on and the remainder decided to cash out.
If interested I’d be happy to dig up some old materials and introduce you to the NAIC principles. These principles outline how to analyze a particular stock.
I can summarize my investment strategy in these simple principles. 1)Buy equities or equity derivatives in mutual funds 2) Buy for the long haul (I don’t do shorts, straps, straddles, commodities, puts, calls, options or day trades) 3) Diversify risk and the sectors you invest in 4)Buy on a regular basis whether the market is going up or down (This is called dollar cost averaging) 5) Tax shelter your investments if you can. These little principles have been very successful for me for the past 30 years. The absolute most important investment advice I can give is: start as early as you can.
I’m neither a CFP, CHP, CPA or any other kind of certified finance guy so I have no credentials or financial products to sell. I’ve just been an investor for a while.
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Thanks! That’s good information. I don’t know if I would be too ready to invest money as a group, seeing as I’m not any of those alphabet things either. I kind of had in mind that we would share info, research stock, etc. as a group and have some classes, lectures, or go to one of the stock symposiums as a group. I thought it might also be fun to have something like fantasy football, too, only with stocks, and recognize whoever does the best at it. Maybe that’s a silly idea. It’d be up to the group. Anyway, once we did the research and learned a little we could each invest individually as we saw fit or not at all.
Besides, I don’t know what any MakerSpace rules would be on handling money or having a money making group. I’m more prone to think of just pooling information.
Learning about stocks is a good thing, but buying individual stocks for a small investor (<$1,000,000) is very risky. With limited funds it is nearly impossible to be properly diversified.
I second @coloneldan recommedation above about mutual funds for most people.
A very good book on stocks and their selection is “A random walk down Wall Street”
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I like the idea
I might be able to make a contribution and also learn from others
count me in
we would not necessarily have to pool money and buy
could we just decide what stocks and leave it tot he members to
buy or sell on their own ?
Understand about it being preferable to have <$1000 to make an effective stock investment. On the other hand, though, there are people with IRA’s or 401(K)'s with the capability to invest but can’t actually access the money until they are 59 1/2.
We should probably have a meeting and see what people want to do. I’ll schedule something. Does anyone have a preference on which night or day?
There are lots of places where one (or the group of us) could virtually play the market.
Obviously, before I put any real money into an investment pool, we would all need to get together and discuss a number of details.
For days and times, I’d say Friday evenings don’t ever seem to have a lot of stuff on the DMS calendar, but might also be not optimal as the ‘business’ week is over and markets are closed. That said, I think one of the important things to do when investing, is to take the emotion out of the equation, and having a meeting on Friday, where you can take a couple days to think, research and ‘sleep on it’ might help some people with separating what might seem like a ‘hot tip’ on a stock that might blow up soon, from an unsubstantiated rumor or incorrect information.
Not $1,000 but $1,000,000. You need dozens, at least, of individual stocks in different sectors to have a properly diversified portfolio. It is very difficult for an individual investor to do that.
The book I referenced is something anyone getting into the stock market should read. Essentially it is an analysis of the ‘best’ investors. The result is that no one ‘beats’ the market in the long run. The performance of the market itself is the primary factor. And that performance has averaged about a 10% return annually for close to fifty years.
The problem, is that to get an effective 10% return you need to do better then that to account for the costs associated with the brokers fees. And to date NO ONE has managed to do that in the long run. With a good index mutual fund you can have fees as low as 0.6% versus broker fees of 5% or more.
If someone is going to invest in individual stocks, then a good rule of thumb is to limit it to no more then 5% of their portfolio.
Index mutual funds aren’t sexy, but they really are the provably best option for most people. And market down turns are great because you get more shares for the same regular ammount of money. Its called dollar cost averaging.
The beauty of this approach is that you celebrate the increase in the number of shares you own in the bear markets, and the total value of your portfolio in the bull markets. The ONLY risk to a index fund investment is the permanent collapse of our economy. And in that case you really have more immediate problems then the value of your portfolio.
I own a few mutuals in my retirement account. Even mutual funds come in (now) thousands of different options. You can generally get mutual funds composed of large companies, medium companies, and small companies, but you can also buy mutual funds composed of only one area, say pharmaceuticals or transportation or you can invest in international stocks from given areas, such as China or Japan. You can also find mutual funds with investments directly in groups such as the DJIA companies or S&P 500. You can get mutual funds comprised of investment strategies, such as the Dow Dogs strategy. It would probably be a good idea to be educated in your investments even if you only buy mutual funds.
There is a world of differene between mutual fund and an indexed mutual fund. The former have you paying 2% or more of your portfolio annually to expert to try to beat the market and fail in the long run versus paying as little as 0.6% for a system to buy stocks that represent the entire market.
All you really need is a single index fund that seeks to replicate the entire market. Just select the one with the lowest fees.
Any other approach and you have much the same risks associated with buying individual stocks.
And for everything you need to know about personal financial planning, I have never seen a better source then this book. It also happens to be a pretty easy read.
Those have good advice. Mutual funds are required to have a wide array of diversification. Some people prefer to have flexibility to research and invest as they see fit. I’d like to see if we can pool information and I’d like to learn more about investing.
No, this is a myth. As demonstrated by your reference to specific funds for specific markets like, pharmaceuticals. They usually, but not always, have mutiple companies represented, but that is not diversification.
Ok, that proves that I need to learn more about investing.
If you get a group together, I can put together a presentation on how to model different investment strategies to predict performance.