What’s the best advice you’d offer to a first time investor?

29 comments

1. Before you consider any other investing, take full advantage of your 401k plan.

2. Don’t invest what you can’t afford to lose

3. Do your homework. Extremely thoroughly.

4. Invest what you can afford to lose, don’t listen to youtubers, don’t listen to reddit, read as much as you can, no lambo for you. Good luck.

5. Do NOT invest in Fintech. I’m down 60% since November. In fact, don’t invest in anything right now. Wait until the Fed stops raising interest rates and inflation has stabilized. Almost nothing is safe atm.

6. Have an investment system. Like you buy into proven companies with a certain amount of your income every month. Be prepared to take losses because imho a downturn is already happening. However that means lots of good buys too.

   The worst thing would be high risk, weed sticks, penny stocks, thinking you will be a genius investor and double your money in a year etc.

7. Take a pretend fund. Do pretend investments with it on a spreadsheet. Track your buys and sells. Do this for a LONG time while learning to read balance sheets and quarterly reports and Value Line.

   Meanwhile, dump your money in an S&P 500 index fund.

8. Don’t get emotionally attached.

9. Build a diversified backbone with index funds, ETFs or individual blue chips before you start with more complicated plays. You need to have a foundation that can weather a storm.

10. 1.) All investments include risk, up to the risk of losing the entire investment. Don’t invest what you can’t afford to lose.

    2.) The risk of losing your investment is proportional to the potential gains you may get. The bigger the possible payout, the bigger the risk of losing it all. This is an ironclad rule of investing; if someone tells you that you can make big returns with little or no risk, they are either lying to you or they themselves do not fully understand the risk.

    3.) Understand what kind of commitment the investment is. Some investments are very liquid: you can quickly and easily cash out at any time. Some investments are **not** liquid at all. If you invest in a business, you can’t pull that cash back out anytime you please; you have to make an agreement to have someone cash you out. If you invest money in a start-up business, *anything* that’s a ‘start-up’, you won’t get your money back for months or years, if ever. Don’t ever put money into something unless you understand how to get the money back out.

    4.) Learn to accept losses. It’s easy to feel good when your investments are up. But when you lose money, there’s often an urge to invest *more* in order to make up losses. This can often lead to taking bigger and bigger risks and/or investing more and more, neither of which is likely to end well.

    5.) Learn when to take gains. Remember what I said about knowing **how** to get money out? Yeah, there’s also a sense of [when to take money out.](https://www.youtube.com/watch?v=3w5D9yJUMOc)

11. I would think that if someone asks you for advice, they’re asking YOU for advice, not some collection of stuff that a bunch of random folks on the internet told you.

12. Diversify

    You’re not going to make instant money on some big ticket item all at once

    You’ll make money little bits of money on various investments over years

13. Don’t start investing until you spend about a year studying investing and how companies are valued.

    I make about 10-12%pa from my shares reliably from that advice.

    edit: to clarify more the person who told me this said something along the lines of “if i gave 10,000 people 10,000 dollars each to invest, within 1 year one person would have 100,000, 50 would have 11,000 and the rest would have lost it all.”

14. Unless you’re really serious about learning a LOT about how the markets work, don’t do it. The big investment firms and hedge funds basically view retail investors as “dumb money” and who they make money off of.

    I know it’s tempting when you see stocks soar and wish you had bought it early, but at the time there was no real way to know that stock would be the one to soar. You’re just as likely (if not more) to lose big on a startup that bombs.

    It’s not a get-rich-quick scheme. It’s gambling.

    Better off letting someone else handle your investment money and putting it into a 401k or IRA before taxes. That “before taxes” part will make your money go way further and probably do better than you could do day trading.

15. Get expert advice.

16. 0 dte option plays are super safe and you should totally Yolo all your money into meme stocks.

17. Make investing as simple as possible.

    Automatic investments at regular intervals

    Simple diversified mutual funds (I like funds that track the S&P 500 or total market index funds)

    Tax advantaged accounts first

    DON’T TOUCH ANYTHING.

    Set it, forget it, and you’ll be very happy in a few decades.

18. Don’t “play the market”. Put everything in index funds and wait 30yrs.

    Do not hire a financial consultant/Brokerage firm. Just put everything in Vanguard and forget about it. An S&P 500 like VFIAX is all you need, don’t overcomplicate.

19. Learn to play poker. Not because its useful, but you will learn a lot of life lessons about investing.

    Such as if you think you’re the smartest guy in the room, you’re probably not.

    Or if you can’t figure out who the fool is at the table, thats how you know its you.

    Weightlifting teaches humility ALMOST as well as playing poker, but you’re probably better off playing poker (its faster, and probably less sweaty).

    On the other hand there’s investing lessons you can’t learn from poker:

    Whatever someone is selling on commission is always the best thing to buy. For them. Not necessarily for you. Ask your barber how often you should get a haircut for a laugh, but people actually believe their brokers and advisors LOL

    If you can’t figure out who’s speculating and who’s investing, you’re the one speculating.

    Some long ramble about pigs getting slaughtered, plenty of people sit on a 15% gain waiting for that 20% and end up with a loss.

    Some stuff hasn’t changed in a century in the markets; if you haven’t read “Where are the customer’s yachts?” then you’re missing out. Its also F-ing hilarious. “Before October 1929, nobody objected to short sellers except their families. The families objected to going bankrupt.”

    “Reminiscences of a stock operator” by a pen name but the actual author was Larry Livermore. Yeah, that Livermore. (edited, I looked it up, its a biography, not an autobiography, my bad, but in my defense that doesn’t matter in context)

    Also if you haven’t read your Charles Mackay you don’t understand post-1970 markets. The whole series is pretty good but volume 1 kicks off with a study of economic bubbles, you know, the only thing holding up our economy since 1970?

    If you read your Graham and Dodd, you’ll find that we’re in a long term speculative bubble as there’s nothing holding up current prices other than the classic greater fool theory. Everything that can’t go on forever eventually stops, LOL. On the other hand, can’t short everything forever.

20. Whap it in an index fund and leave it alone.

21. Hang on to them magic the gathering cards. You never know which one’s going to go to the Moon in 25 years.

22. Learn to take emotion out of it.

    Long term gains are dope.

    If you’re going to do any kind of trading understand that you don’t understand how it works. You’ll lose money sometimes. Education is critical and having a strong and rigid investing thesis will make or break you.

    It’s okay to ape into something IF your investing thesis has a very small budget for supremely high risk investments…but do not, under any circumstances, pull from your normal investment account to try to find the next meme crypto or whatever. That’s your gambling money IF you decide to do this at all.

    Do not even consider trading on margin until you know with extreme certainty that you know what you’re doing.

    Real estate will be good to you.

    Always learn.

    Figure out how compounding interest works. It’ll change your life.

    Start now.

    Man, there’s a million things to say.

23. If you are Canadian max out your TFSA first, save your money from taxes!

24. Please don’t buy a stock because genius investor 46 on tiktok told you to

25. Take your time and become more knowledgeable. Don’t just jump right in.

26. Don’t invest anything you’re not ok losing.

    Look at alternatives like your pension.

    Do your homework on things your putting money into.

    Take safer investments with a longer payoff over the prospect of a quick buck. Lots of people got rich off bitcoin. More people lost everything.

    I know WallStreetBets is where the cool kids hang out, but you aren’t ready for it.

    Diversify your portfolio. Some stocks and shares, some precious metals, some real estate, just don’t put everything in one thing.

    If you can, buy land. They don’t make it anymore.

27. Take full advantage of matching money for your 401k. It’s free money, do not leave it on the table.

    You’re looking for low cost to own, and stable returns over time.

    I highly recommend S&P 500 index funds. Diversification is built in. No matter what the economy does, SOMEONE is making money.

28. Every move should be part of a long term plan

29. Follow the politicians. They buy, you buy. They sell, you sell.