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Life is one big slot machine (thelemmy.club)
submitted 1 day ago by to c/memes@lemmy.world
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[–] 6 points 15 hours ago (2 children)

I keep writing and deleting this same post a lot, because there're so many facets to it, but I swear it's not really that complicated once you understand how much of it is about tax efficiency. It turns out that answering the question you asked is the best place to start: "tips on starting."

Tips:

  • Pick a brokerage that isn't Robinhood. Fidelity, Charles Schwab, and Vanguard are big names with zero trading fees; Schwab probably has the best user interface since they got ThinkOrSwim when they bought TD Ameritrade.
  • Get comfortable with the idea that you'll want to do direct bank ACH transfers to your accounts with the brokerage. You should at least have a normal brokerage account that doesn't have tax advantages or rules, and a Roth IRA.
  • Learn about Exchange Traded Funds (ETFs). You can buy shares of $VOO (if I use a dollar sign it means it's a stock "ticker symbol") and get a slice of the entire S&P 500. A share of $VT buys a slice of (one of Vanguard's interpretations of) the entire world market. You can be diversified with just one fund.
  • Find good websites to research. Bogleheads is a good one that I like. $RDDT had several subreddits that looked at the topic from all different aspects, but now that's just another thing they've stolen from the world.^1^
  • Ask questions if you have them and find good websites to research. Most of the buy-it-and-hold crowd's advice won't have changed at all across decades (that strategy is where you buy the stock, and then hold it), but search engines tend to push newer websites, and it's kind of pointless to set up a new website that just always says to buy and hold.



Some links:



[1] Since we know they do marketing campaigns that will push certain topics/movies/whatever if they're paid to, AND we know they have carte blanche with shadow bans/hiding posts/etc, has anyone done any analysis to see if they're being paid to push certain stocks in whatever tattered remains are left over from their investing forums? I guess you'd have to pay them for access to scan their comments now with any kind of speed, and I'll also guess you wouldn't be able to buy a product from them that would prove they're doing it.

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  • [–] 2 points 6 hours ago (1 child)

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  • [–] 1 point 4 hours ago

    Margin is a short term loan from your broker that requires interest payments. As noted in the boglehead article, usually this requires borrowing against your portfolio (or if you're using Robinhood, you flip the switch that allows margin and borrow against a software bug). The brokerages have high speed computers programmed with people who like money to make sure anything risky you do on margin doesn't come back on them, and they can/will sell shares out of your portfolio to balance their risk.

    If you want more exposure than you have cash, there are funds like $NTSX that use witchcraft to effectively capture 90% of the 500 largest stocks in the US (saying S&P 500 is trademarked or something) and 60% of the bond market, for a total of 150%. I don't know much more about it except to say that if the fund goes to zero, which everything could, your exposure is limited to the money you put into it.

    Note that none of this is investment advice, and any cash you stick in a mattress loses purchasing power to inflation.

    Sources:

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