by christian gabis. investors active investors passive investors speculators
TRANSCRIPT
By Christian Gabis
Investors
Active Investors Passive Investors Speculators
Investing is something you can understand and that is enjoyable to you
You want to learn or already know how to understand financial statements
You have time to commit to researching and learning about companies
You have the patience to wait for good investments
You are in control of your own emotions
Prefer to have others research and find good investments
Typically own mutual funds or Exchange Traded Funds (ETFs)
Are willing to accept a market return (on average)
Are willing to pay others to manage their money
Make trades based on market movements or other indicators they think are important
Buy a security because it has “gone up” Don’t rely on underlying fundamentals of a
company to dictate its value (think CMG) Try to predict market movements or
outcomes Technical analysis, day-trading, etc.
Mutual Funds: Hold a large number
of stocks to diversify, Active and Passively
managed Expense ratio (Fees) Tax Consequences Performance LAGS
MARKET 80% OF THE TIME FOR ACTIVE MANAGEMENT
ETFs: More tax efficient than
mutual funds More liquid Also charge an
expense ratio Better choice most of
the time (especially for a lump sum investment)
S&P 500 tracking ETFs: IVV S&P 500 tracking Mutual Funds:VFINX Actively managed Mutual Funds: LLPFX Longleaf Third Avenue Funds Dodge and Cox REMEMBER TO LOOK AT THE EXPENSE
RATIO!!!
Don’t try to “time” the market…it does not work
Open a brokerage account As little as $100 will do for a start The more $$$ you can commit the more
options you will have when starting out You could start buying individual stocks with
as little as $500( but more is better)
Open a brokerage account Buy either and ETF or Mutual Fund (low
cost) Keep adding money COMMON MISTAKE: You only need ONE
fund. Don’t think you need to diversify with a bunch of S&P 500 mutual funds or ETFs!
CDs Savings Bonds Municipal Bonds Corporate Bonds Brokered CDs Treasury Securities Speculations: Oil, Gas, Gold, Silver, etc. Real Estate
Capital Requirements◦ Real Estate- High- but you could buy a REIT◦ Commodities-High- but there are ETFs that track
the underlying commodity◦ CDs- Around $1000- subject to interest rate
changes and inflation◦ Bonds- High-$10,000- can buy funds that expose
you to bonds◦ Savings Bonds- Low- $25- Generally Poor
Investment- subject to inflation risks
This is where CCIG comes in◦ Finding undervalued securities◦ Finding arbitrage situations◦ Sharing ideas◦ Experiences (failures and successes)◦ Support and information resource◦ Attempting to beat the market◦ Meeting other investors