Ask HN: How do you trade?
Do you manage your own portfolio? What tech do you use? What sources inform your trading?
12 comments
Vanguard, VFINX. Keep it simple stupid.
Study after study has shown how atrocious human beings are at actively managing an investment strategy. You can, literally, count on two hands the number of people who have consistently beaten the S&P 500 over a period longer than 20 years (which is the time span that matters when you're trying to beat it). Why would anyone think they were one of them?
Study after study has shown how atrocious human beings are at actively managing an investment strategy. You can, literally, count on two hands the number of people who have consistently beaten the S&P 500 over a period longer than 20 years (which is the time span that matters when you're trying to beat it). Why would anyone think they were one of them?
20 years in the same fund / strategy is generally a poor strategy, especially for retirement savings. That said investing for 20 years plus
Early on your appetite for risk should be much higher but as you get nearer to your end point (generally retirement, but could be kids going to college etc) you want to reduce your risk exposure. Generally this is done by switching the balance of your portfolio more into bonds and low volatility equities.
Early on your appetite for risk should be much higher but as you get nearer to your end point (generally retirement, but could be kids going to college etc) you want to reduce your risk exposure. Generally this is done by switching the balance of your portfolio more into bonds and low volatility equities.
“the number of people who have consistently beaten the S&P 500 over a period longer than 20 years”
If someone is managing money for the long term, why would they care about 'consistently' beating the S&P 500 for 'longer than 20 years'? Shouldn't you care about aggregate, compounded returns, rather than consistent returns?
Would you rather have annual returns like this {5%, 5%, 5%, 5%, 5%} or this {4%, 2%, 13%, 4%, 4%}?
If someone is managing money for the long term, why would they care about 'consistently' beating the S&P 500 for 'longer than 20 years'? Shouldn't you care about aggregate, compounded returns, rather than consistent returns?
Would you rather have annual returns like this {5%, 5%, 5%, 5%, 5%} or this {4%, 2%, 13%, 4%, 4%}?
I mean average compounded over 20 years, including inflation. Seriously, look it up. Almost no fund or person has done it. Everyone who has is a billionaire that you've probably heard of (Buffet, Soros, et al).
Ask HN: Which personal investing tools do you use?
https://news.ycombinator.com/item?id=11387384
to answer your question yes i do manage my own portfolio.
i use my metatrader for technical analysis, it charts are my source of information as opposed to the traditional news services. plus meta trader has a get feature of setting alarms and bells to notify me if something has turned the way i expect it to.
i am not a day trader, but i check the selected company stocks which i am targeting in a particular market on the daily bases, and look for the movement and opportunities in the particular market segment or a particular stock in a market section. And then make a decision whether to jump in or dump it. its simple plus if you add more than two or three information sources or adviser's it gets all confusing to make a decision.
i believe in keeping it simple.
i use my metatrader for technical analysis, it charts are my source of information as opposed to the traditional news services. plus meta trader has a get feature of setting alarms and bells to notify me if something has turned the way i expect it to.
i am not a day trader, but i check the selected company stocks which i am targeting in a particular market on the daily bases, and look for the movement and opportunities in the particular market segment or a particular stock in a market section. And then make a decision whether to jump in or dump it. its simple plus if you add more than two or three information sources or adviser's it gets all confusing to make a decision.
i believe in keeping it simple.
I don't have time to actively trade so I settled to buy shares in an actively managed mutual fund. I did the same research on the portfolio of the fund as I would have done on individual company stocks - looking at past performance, the makeup of the fund, industry performance, and investor websites. I use Investor's Business Daily as a more impartial source, it's just numbers without much "insight".
One good thing is that the mutual fund has automatic diversification within a particular industry and if you buy shares in multiple funds you get diversification across multiple industries. Another good thing is that the shares of mutual funds are often $100-200 each while the shares of individual companies (ex. google) can be $700 just for one. Using a "high-tech sector" mutual fund allows me to benefit from the growth of multiple companies (goole, apple, intel, facebook, microsoft, intel, etc.) while not having to own separate shares of each of them.
One good thing is that the mutual fund has automatic diversification within a particular industry and if you buy shares in multiple funds you get diversification across multiple industries. Another good thing is that the shares of mutual funds are often $100-200 each while the shares of individual companies (ex. google) can be $700 just for one. Using a "high-tech sector" mutual fund allows me to benefit from the growth of multiple companies (goole, apple, intel, facebook, microsoft, intel, etc.) while not having to own separate shares of each of them.
I manage mine. I'm doing alright but I'm treating it as a hobby as opposed to anything else since actively managing it involves not insignificant risk. I [should|will] keep a bunch in a more stable Vanguard fund to mitigate the risk.
Right now I'm using Merrill, which is fine. Trades are something like 6-8 bucks which isn't terrible. I'm actually trying to switch to InteractiveBrokers when I manage to not have an ADD attack during their insanely long signup process.
Two reasons for the switch. Dollar trades are nice (with $10 minimum, monthly fee is `max(10 - num_trades, 0)`), and I think they have a small per contract fee for options. The big reason for the switch though is the tooling and the API. I want to be able to build up a nice CLI tool (maybe also a daemon for alerts/custom triggers) that I can use to reduce the per-interaction overhead of actively managing my portfolio since most of the time I spend doing it is waiting for page refreshes and mentally doing the math on options chains instead of writing a quick function to run a specific comparison and being able to just call it anytime in the future.
Right now I'm using Merrill, which is fine. Trades are something like 6-8 bucks which isn't terrible. I'm actually trying to switch to InteractiveBrokers when I manage to not have an ADD attack during their insanely long signup process.
Two reasons for the switch. Dollar trades are nice (with $10 minimum, monthly fee is `max(10 - num_trades, 0)`), and I think they have a small per contract fee for options. The big reason for the switch though is the tooling and the API. I want to be able to build up a nice CLI tool (maybe also a daemon for alerts/custom triggers) that I can use to reduce the per-interaction overhead of actively managing my portfolio since most of the time I spend doing it is waiting for page refreshes and mentally doing the math on options chains instead of writing a quick function to run a specific comparison and being able to just call it anytime in the future.
I buy VOO and just sit on it because I don't want to spend my time and attention trying to beat the market.
<rant>
If you google, "Warren Buffet Investment Advice", you will get all kinds of crap: syllogisms, general life advice that he's said, etc, all out of context.
It never ceases to amaze me that when people trot out his investment advice they get very in the weeds with Security Analysis, treating any investments as though you own the company, paying careful attention to what book value means in specific contexts, and on, and on, and on.
What fails to come up, very often, is the very specific advice he has laid out time after time for most average people: buy a passive index fund that tracks the S&P 500, Vanguard's product is probably the best right now, invest 90% of your retirement in that and the other 10% in a mix of A-class bonds. Personally I think, early in one's life, you can skip the allocation advice and go full 100% S&P 500 (especially given how crappy bonds are right now), mixing it up later in life.
</rant>
If you google, "Warren Buffet Investment Advice", you will get all kinds of crap: syllogisms, general life advice that he's said, etc, all out of context.
It never ceases to amaze me that when people trot out his investment advice they get very in the weeds with Security Analysis, treating any investments as though you own the company, paying careful attention to what book value means in specific contexts, and on, and on, and on.
What fails to come up, very often, is the very specific advice he has laid out time after time for most average people: buy a passive index fund that tracks the S&P 500, Vanguard's product is probably the best right now, invest 90% of your retirement in that and the other 10% in a mix of A-class bonds. Personally I think, early in one's life, you can skip the allocation advice and go full 100% S&P 500 (especially given how crappy bonds are right now), mixing it up later in life.
</rant>
Similarly, I invest in a Vanguard target retirement date fund (VTTSX).
I had money in Vanguard for a while. I sold out of it, it wasn't making money and didn't seem to track the index it claimed to. The process was very opaque, buy & sell requests only processed once a week, they determined the price you sold at, etc. I guess trading it as an ETF could have negated some of those issues.
Now I invest in stocks with high yield dividends. Generally I look for stocks that have yields of 8 - 10%, then investigate the company further to see why that's the case. I'm looking for rare moments when big successful companies have a temporary blip that makes them a bargain. Some of the shares I've bought are now paying out 20%+ annually just in dividends, compared to the price I paid for them.
Now I invest in stocks with high yield dividends. Generally I look for stocks that have yields of 8 - 10%, then investigate the company further to see why that's the case. I'm looking for rare moments when big successful companies have a temporary blip that makes them a bargain. Some of the shares I've bought are now paying out 20%+ annually just in dividends, compared to the price I paid for them.