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What is your definition....


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40 minutes ago, ten ocho recon scout said:

Spot on. Hardly anyone saves.

And fun y that you mention it. When I was younger, i did odd jobs like construction, cleaning pools, termite work etc to make ends meet. It was always the millionaire bouncing the $75 dollar check.

That’s clearly your fault for cleaning their pool after they attended at least one game in an Angels homestand.

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On 3/30/2019 at 1:46 PM, Brandon said:

When you come across someone with an IRA or fund that is doing well, it makes no sense to reinvent the wheel.

I'll go one step further - if you want to invest in equities, and aren't favoring one sector over another (ie tech vs. energy vs. transportation), just invest in an S&P 500 index mutual fund or ETF.  There are very few stock managers who beat the index for a variety of reasons, fees being the biggest part.

 

If you have money and have access to hedge funds or private equity funds, you can do better than the market.  Maybe.

 

If you are a regular joe and have $3,000 or $100,000 and looking to invest in the stock market, just find a low cost index fund and be done with it.

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Even ignoring fees historically 80% of actively managed funds under perform vs. their benchmark and in recent years it's been an even higher percentage.  If you have access to HF and PE I'd advise against getting involved unless you're really wealthy and invest a small amount say 10% or less of your portfolio.  Also realize those aren't necessarily liquid as there's lock up periods and in some cases when you do redeem you may not get your money for a few months.    

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17 minutes ago, Catwhoshatinthehat said:

Even ignoring fees historically 80% of actively managed funds under perform vs. their benchmark and in recent years it's been an even higher percentage.  If you have access to HF and PE I'd advise against getting involved unless you're really wealthy and invest a small amount say 10% or less of your portfolio.  Also realize those aren't necessarily liquid as there's lock up periods and in some cases when you do redeem you may not get your money for a few months.    

It is very hard to invest in hedge funds or private equity funds UNLESS you have a pretty significant net worth.  Most any fund requires their investors to be what's called ''accredited investors" and with that comes a certain net worth, and presumed level of investing sophistication.  

You aren't going to be able to sell your autographed Trout jersey, or even your Angels season parking pass, and just invest that into a hedge fund or private equity fund.

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30 minutes ago, yk9001 said:

It is very hard to invest in hedge funds or private equity funds UNLESS you have a pretty significant net worth.  Most any fund requires their investors to be what's called ''accredited investors" and with that comes a certain net worth, and presumed level of investing sophistication.  

You aren't going to be able to sell your autographed Trout jersey, or even your Angels season parking pass, and just invest that into a hedge fund or private equity fund.

I'm familiar with what it takes to actually make an investment as I've been working in the industry for over a decade.  Even HNW individuals who are looking for somewhere to essentially park money can get turned away because they have no idea what investing entails.  Just like actively managed mutual funds getting outperformed by low cost index funds the same thing happens to HF/PE managers who get outperformed by their benchmark indexes.  Unless you happen to invest with the managers who outperform over the next so many years you're seeing lower returns for higher fees.  The top managers have their pick of investors so even having money and knowing what you're doing won't get you into some funds.    

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I remember the moment I found out about being accredited and it blew my mind and was a whole other level of wealth and simple FU money. I tried to get into a few different commercial real estate projects but they required this and a certain level of net worth.

What's funny about seeing so many tax returns and asset statements is always looking for the edge, but a lot of the wealthy people I worked with were simple Proctor and Gamble stock owners or got in early on Apple or Microsoft and held on. Nothing special, just invested and let it grow. Kind of what YK mentioned. I'm not financially savvy enough to know the ins and outs of financial planning, but I've definitely seen a pattern in 20 years of the haves and have nots.

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I spent about 20 years, from say 1990 to close to 2009, buying a lot of stocks I thought would hit it big.  My success rate was bad.  After the stock market crash, I started investing in indexes.  

You don't get the rush of a hit stock (similar to a sports gambling bet) but all you have to do is look at the long term numbers of the S&P 500.

Many people well-off have no inside tricks.  Good job. Hearty savers.  Basic investing.  Including real estate, which I never had the guts to do.

CAVEAT: THERE IS NO SURE THING

I *always* remember reading years ago that the entire stock market (Dow/S&P) was flat from say 1964 to 1982.  That is 18 frigging years with zero return.  It could easily happen again.  Hell, will probably happen again.

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There are a lot of crappy hedge funds.  I'm in the business and it sounds like Cat is as well.

You know who gets the richest off of hedge funds?  The general partners. 

2 and 20

 

That's a 2 percent management fee and 20% of the profits.  That's what hedge fund managers make.  You have to be damn good to do better than the S&P index when you are taking 2 and 20 from your investors.

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3 minutes ago, yk9001 said:

I *always* remember reading years ago that the entire stock market (Dow/S&P) was flat from say 1964 to 1982.  That is 18 frigging years with zero return.  It could easily happen again.  Hell, will probably happen again.

Yes from 1966-1981 the S&P was flat with dividends reinvested.  Despite that if you look at pretty much any 30 year span in the S&P like 1966-1996 the average annual return with dividends reinvested is still 10-11%.  If you put in $1,000 and left it alone for 30 years every 6.5-7 years the amount basically doubles - $1,000, $2,000, $4,000, $8,000 then $16,000.   Look at the returns of the last decade and I definitely wouldn't bet against multiple years of 0 or negative returns especially as we keep kicking the national debt and unfunded liabilities cans down the road.

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