DISCLAIMER: I am not obligated to use your financial advice. In fact, I will probably not take most posts in this thread seriously, knowing the quality of posts on SEN.

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Information is power. More information (and thus, more choices) means more power. And that is why I ask you this: what is the best kind of security to invest in if I wish to gain the most money after 5-10 years? There are several options, and I am not limited to committing my money completely to a single type of security. Keep in mind that I do not know much about investing, so any information on the subject that you would like to share will be appreciated. Links to credible sites would help as well.

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What I know about securities:

Common Stock - "Regular" stocks. Depending on the company, these have huge potential for gains (and huge potential for loss). Other companies are low-risk. Some stocks return dividends.

Preferred Stock - Stocks that yield a constant rate of dividends. These are probably bad for long-term investing, since the stock's value has the potential to rise higher. Also, preferred stock gives the holder less or no rights (e.g. voting).

Mutual Funds - Collective pools of securities. Types:
-Sector (e.g. utilities)
-Domestic (e.g. US companies only)
-Regional (e.g. Pacific Rim companies only)
-Funds with money in developing countries/newer industries are more risky.

Bonds - A certificate that grants interest at a fixed rate for a certain number of years. You get your original money back when the bond expires.

A good rule: don't invest in a stock just because it has been climbing for the past X months. Look at their business model, management practices, sector growth, etc. and determine if they are going to grow.

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If you have never invested before, don't bother posting. Off-topic replies, trolling, and the like will be quickly ignored.

Post has been edited 1 time(s), last time on Mar 25 2011, 12:03 am by rayNimagi.

I'm willing to invest money in a bet that only a handful of people (and handful is a generous amount) have done the type of investing you're talking about.

How much do you have to invest?
What is your appetite for risk?
Can you afford to lose 10% of your money? 50%? 100%?

Yeah that's pretty much what it comes down to:
High risk, high (possible) yield. Low risk, low yield.

Generally I'd say its a good idea to invest in a solid equity fund for average but relative guaranteed winnings.
Don't invest in something that has made tremendous profit recently because chances are it's just approaching its max. and will then drop lower than you started.

Don't invest in real estates since that's long-term (maybe 50 years).
If you wanna be super safe there's government bonds or just a savings account but you hardly get more than the prime rate so that's not recommended.

I've also heard that you can get rich being and arms or drug dealer.
Or just sell clean and cheap American water to Japan.

Or know what's going on.

Honestly ray, I'd be dead on shocked if you have ever invested before, because you left out a lot of details. Such as the rating system in bonds. Or that bond/CD rates are intentionally low right now. If interest is below/at inflation, it isn't worth investing. They want people spending money, not investing. I'm going to assume that this is also why government student loans this year were about 4.5%.

You also didn't seem to mention anything about investing abroad. There's a lot of money to be had in there if you know what you're doing. But a lot of people don't. A lot of people don't watch both exchange rate changes as well as portfolio growth, so hey the stock may go up 15%, but if the exchange rates shifted you may be worse off for it. Oh, and repatriating money in high risk nations. Of course, there are ways to hedge risk against that. But anyways.

As for the rating system, its hard to say that you should only invest in highly rated bonds. "Junk bonds" are more speculative, and carry higher risk. But...you could buy what is essentially "junk stock" in an upstart that has a high default risk, even though its only name. Its hard to say based on the rating, but if you want to play it safe, I guess go with higher rated stocks and bonds. I am a huge fan of microfinancing, by the way.

Oh, and you didn't mention buying real estate for some reason, nor did you mention buying metals. Interesting.

He should totally invest in Apple. They are SO COOOL. Biggest company in the world!

Funny enough my mother bought a ton of stock in Apple in the early to mid 90s when they were tanking (I believe it was close to $20 a share or something), and all her stock broker friends laughed at her saying it would be a terrible investment. Now the stock is up to $300+ per share, so not a bad call on her part.

Of course investing in them now would be dumb, but I figured I'd share that story anyway.

My retirement fund invests a big chunk of their stocks in Apple (looked like about 40-50% of all shares when I looked at the details a few months ago), although they began paring their shares back at the start of the year. Seems like a good decision.

I'm just waiting for the February account report; I'm expecting a bit of a loss from the whole Japanese situation

Hey, she's smart for not panicking and selling!

I had a teacher in high school who had the opportunity to invest in Google when it first went public. But it was such high risk they decided not to. BURN

Google was high risk? I would have invested in it if I could have afforded it at the time.

Although people might have drawn comparisons with the 90s and thought it was dot.com 2.0, so I think I understand why people would think it risky.

Google was two college students who hadn't even graduated running BackRub on the university campus. They moved into a garage 3 years later. High risk? You would've been insane to invest in them.

There's a part of me that wishes I bought as much gold as possible five or ten years ago and doubled my money.

I just have a couple of CoDs and I'm lucky to be earning the 1% on them.

What Cardinal said. It was before anyone had heard of Google...no one new much about them, and they didn't see what the company could possibly bring to the internet.


My boyfriend closed his CD after the rates changed, and I told him to put the money into gold. This was right before gold skyrocketed a few years ago. He didn't...oh well.

At one time my grandparents but together a portfolio to me. I guess I ran through it for college tuition.

Wait... wasn't Google's IPO long after they were big and famous? I mean, sure you could have given them private funding when they were small, but you would have had to go looking, or be a venture capitalist.

Also, savings/CDs are such a joke right now when the extremely stable blue chips are paying three times the yield in dividends.

It might have been... "Originally priced at $85 each, Google’s shares soared past $600 in 2007" so yea...still. $85 for an internet company might've been too high. But now he's kicking himself.

savings/CDs are intentionally a joke to make us want to spend and to have our money liquid. This is one way how the government 'facilitates' economic growth.

I only trust CDs. You're just gonna lose all your money trying anything else. https://www.google.com/comparisonads/uscd#!search&Normalized+Term+Length_R=0_99999&Deposit_D=5000&CD+Type_S=Normal&Zipcode_S=32725&si=0&start=0

Put in $2.5k and you make $875 after 10 years.

BUT WHY

"Google was two college students who hadn't even graduated running BackRub on the university campus. They moved into a garage 3 years later. High risk? You would've been insane to invest in them."

They didn't go public until 2004, after starting as you describe in 1996, so about 8 years later. They were already a large, well-known search engine at the time.

I was seriously considering investing google at the time. However I had no available money and no knowledge on how to go about it. But if I'd had the former, I definitely would've done it.

I can still get a chicken sandwich with the works for 99c. Next-Gen consoles will always cost $300.
Inflation is a myth.

I'm...speechless. What's your basis?