Show HN: StockNerd – A community for index fund investors(stocknerd.com) |
Show HN: StockNerd – A community for index fund investors(stocknerd.com) |
OR do a 3 fund portfolio like: https://www.bogleheads.org/wiki/Three-fund_portfolio
OR buy a target retirement fund from Vanguard: https://investor.vanguard.com/search/?query=Vanguard%20targe...
OR fill out a risk profile on Wealthfront/Betterment and invest there.
Bottom line is pick an approach and don't ever touch a damn thing.
I believe this advice can fit on a single web page and doesn't need an app, a community or otherwise.
Index fund investing is (relatively) simple and (relatively) boring. Honest questions: What does an app with leader boards, individual portfolios, and stock picking add to that or how does this app fit in with that philosophy?
(edit for grammar)
I started working with my colleague to build Keel to facilitate the verified information flow. People who are selling their stock/fund ideas on Keel will have to integrate directly with their personal brokerages. This way, users who are looking to follow credible ideas can see not only the historical returns, but also the real buy/sell activities.
Working around brokerages is challenging but I believe transparency is an important missing piece in all of the online/offline sources of investment advice. Hope this will help those who offer credible ideas shine, and save time and money for those who look for advice. And (here comes to the self-promote part), if you think this is interesting, check it out: https://keel.io
Of course, if you don't think it's interesting, still let us know how we can make it more interesting to you!
A community for index fund investors sounds oxy-moronish to me ...
What's to talk about ?
I understand that these strategies are not country-specific, but not sure if Vanguard is accessible to non-US citizens, and there might be tax implications in different countries. That's why I'm asking.
[0] https://www.vanguardinvestor.co.uk/home
[1] http://www.scotsman.com/business/markets-economy/bill-jamies...
They have mentioned that Vanguard will be looking to give access to Europe in 2018.
[Edit] - Removed Financial Times link as they have a paywall.
For tax specific stuff you should look at your regional sites eg
https://global.vanguard.com/portal/site/home https://www.ishares.com/us/ishares-global
Vanguard operate mutual funds in the UK priced and traded in GBP, through their UK subsidiary. They're available through most major trading platforms. The one thing to note about Vanguard's UK funds is that the management fees are higher than their US equivalents (but still one of the cheapest in the UK market).
As others have said, you can also just buy ETF versions of most of their funds, which are regular shares traded on the stock market. In that case you're buying in USD.
As far as tax is concerned it's treated just like any other investment (and if you're tax resident in the UK and still have an ISA allowance you can just put it in there and negate the tax entirely).
Make sure to stick it in an ISA account if possible to keep it tax free.
In order to get average returns, the key is simply to own a tiny fraction of the entire market, whatever "market" means to you. The focus has long been on the S&P simply because it has historically done a pretty good job of representing the US equities market, it is market-cap weighted (unlike the Dow), and the earliest index funds tracked the S&P.
It's my expectation, stated without proof, that it should be easy to find a comparable index in Europe, if you want to match the average European return.
https://www.charles-stanley-direct.co.uk/ViewFund?Sedol=B41X...
http://www.investopedia.com/articles/mutualfund/05/etfindexf...
I'm from Europe and I'm holding couple of Blackrock ETFs.
Here's handy site for screening EU based ETFs (no affiliation).
Souverän investieren mit Indexfonds und ETFs: Wie Privatanleger das Spiel gegen die Finanzbranche gewinne
by Gerd Kommer
You can also google for Kommer Portfolio. It is, IMHO, very well balanced (asset classes, geography etc.).
I personally like to follow my own index fund portfolio. Then when I first started index investing there was about a 90 day period where I had to research and figure out what I wanted my own portfolio to be.
Also index funds do change over time. For example if you have more taxable income you will want a more tax advantaged index fund portfolio. You'll also want a special portfolio for your retirement accounts, and maybe something for your kid's 529 plan, etc...
There are many popular index fund communities for these reasons, plus lots of people find investing fun and interesting and like to learn more about it and help others.
What do you think?
I think its what every young person (under 30) should be doing.
"So, you letting your investments sit there, not touching them?"
"Yup, you?"
"Same"
Of course, Boggleheads would do just fine for any of these, but more options never hurt.
Because of re-balancing. Say you invest in three index funds at a 70/20/10 split. One of those funds performs much better than the others over time, leaving you with a distorted ratio. So you re-balance to get back to your original 70/20/10. Typically you'd re-balance one or two times a year.
Ideally you want to avoid selling to rebalance, so if you're investing regularly (once a month, for example) you want to know exactly which funds to put your money in to each time to maintain your percentage split.
Unless you're extremely wealthy, any money you are able to save (outside of retirement money) is probably money you are going to want to use for something to improve your life in the semi-near future. Buying a house or car (or just a better one) for example.
With that assumption in place, under what circumstances does investing in index funds make any sense whatsoever? The entire market crashes on occasion due to herd mentality, and yet even given that level of risk index funds still take many years to appreciate in value significantly. It seems like an absolutely terrible place to put money that isn't specifically intended for retirement or something like a 529 plan.
But the landing is nice! (except I really wish this was an svg https://www.stocknerd.com/assets/img/logo.png)
You want to do that on a large screen in a quiet room.
How does the app accomplish this goal?
I would love to use it or learn about index fund investing but there is no web-app or android app :(.
Our other account got rate limited and says "you are submitting too fast" so we made this one.
Also it is good to point out leaderboard means nothing, it is totally pointless.
This is like playing poker with infinite fantasy stack.
If you are good investor you will never be on this leaderboard :)
Thanks!
TomLevelhead: "Index funds are sensible and smart."
MarySmartpants: "I too enjoy the consistency and moderate growth inherit in a diversified index"
Bah.
I want to try it! :)
Most people adjusts (ie: increases) their spending when they get additional income, but it doesn't have to be that way. In the end it's a lot about trade-off, like for exemple do you prefer stuff like going out to restaurant, owning a car, etc.
I'd love to see a Financial Independence plan around growing [a] business(es) and retiring early but not crazy early (40-55) and living on a substantial middle/upper-middle income for several decades.
If I had enough other investments that the stocks were just icing on the cake that wouldn't be an issue, but that kind of goes back to my point of being extremely wealthy and having truly extra money you can park in risky stuff.
It also allows you build up capital to say start a business or take some years out.
Building capital for a business is exactly the kind of medium-term goal I was referring to, where you wouldn't want it getting spoiled by a market crash at the wrong time.
Say I'm squirreling away $5k a year for a new car in 4 years. Every year I put in another $5k, so by the end, I've put in $25k.
If I put that in a typical savings account, I earn 0.1% and come out $50 ahead. Effectively 0, or losing value once you throw in inflation.
Go with stocks, at a 5% return, I end up with over $27k, and at 8% I have over $29k. It's also true that I could lose value, and that's the gamble.
So it's a matter of your comfort level, obviously, and if you can't afford to lose the money, don't invest. But in many many cases, the reward outweighs the risk.
I view it that I'm much, much more likely to get a return > 0.1% than experience a loss over 5 years, and I'm willing to accept the risk.
This is not the idea you are looking for...
You have identified a well known area of interest... but you are not solving a problem. If a problem can't be solved with conversation with a trusted friend or relative then it's a slim chance an app and leaderboard are the right answer.
Non index funds perform the same as index funds (and research indicates you can differentiate the ones that outperform a priori with any method). But those funds have higher fees.
Of course, there isn't any real cost to switching. So you could always switch to Schwab or vice versa as needed.
That's why I prefer to stick with Vanguard: like you explained, fund holders are their corporate owners and they're supremely unincentivized to perform a bait and switch. Schwab, on the other hand, could decide to raise admin fees 10 basis points tomorrow if they decided the revenue justified the increased churn.
There is a compromise between living for the moment and living for the future. If you are saving for a house then you can move those investments to a less risky investment option but still a better return than bonds or interest. Keep your medium-term investments separate from your retirement account. I have short term, long-term non retirement, and long-term retirement accounts.
The gain isn't paltry. The difference between a 2% rate of return and a 5% rate of return for $5k initial + $50/month over 30 years is around $22k. If you do $200/month it's $59k.
Even assuming you're a gambler and put all your savings into stocks and get that mythical "steady 7%" return, you need to set aside $75K every year to reach $3M in 20 years.
I'm not claiming to be the world's best saver, but I think I live frugally enough, and after 20 years into a fairly good tech career, my savings is an order of magnitude+ less than that.
That's roughly my plan. My goal is to achieve financial independence, but my wife and I will continue working even after that. FI just gives us the freedom to do work the way we want.
My current projections put us at retiring roughly when we hit 40.
I just started my own business, which I hope to grow into a indiehacker/lifestyle type business; not a rapid growth startup. Just something I like working at and that earns a reasonable income.
All that said, I'm not sure why you think $24k/yr is a pauper lifestyle. In fact that's roughly our yearly expenses once we achieve "initial FI" * . That's in Southern California, and we hardly live like paupers.
By the way, I never got involved in the FI "crowd". I read through /r/personalfinance in the past, and check it occasionally. It's definitely very heavily expense management. Makes sense, since most people are really bad at expense management. And there is definitely not a lot of discussion about where to draw the line between cutting expenses and having fun. I can imagine that FI specific communities would be much worse in that regard.
But I think all of that is driven by the fact that these communities are composed of, well, everybody. And most everybody can only dream of maxing their IRA. For people in the HN crowd financial management is quite a bit different. We need advice on what to do after we max our 401k! (HINT: Start your own company and do a solo 401k). I think a lot of us are also very privileged already in what work we do. If you're a programmer, you can generally find a programming job you life that pays very well. For most everybody else, finding a job you life is either rare, or would mean taking a massive pay-cut. So while most people dream of FI being an escape from work, I think a lot of the HN crowd is like me; dreaming of FI as just ... freedom. Freedom to take a year off and work on a startup. Freedom to work for a local company for $150k/yr instead of working for Google to earn that fat $300k/yr.
EDIT: * Forgot to clarify that "Initial FI", for us, occurs after our house is paid off so $24k/yr is without a mortage. I editted out long-winded sections of my original comment and forgot to clarify :P
EDIT: See my edit above; I realized I forgot to clarify that my $24k/yr figure was excluding mortgage.
It's really a personal experience, I know myself I don't feel like my life is missing anything even if I'm putting money aside to my future. I'm still traveling at least once a year, and I eat pretty good food all the time. At the same time, I don't have a car and rent one whenever I need one.
Of course, the lifestyle choices we make aren’t for everyone, and that’s fine. But they’re also not totally crazy. We can save that much still live about as well as the median American, and a lot better than the median human.
Rather, the idea is that after you have your mortgage, you put your extra money towards your stock/bond investments rather than putting extra money into the mortgage to pay it off early.
This is because the interest on your mortgage is quite low compared to the long-term stock market returns (7-8% after taxes/inflation). So your dollars are more valuable there than spent paying off your mortgage.
In other words, if you take two people, each buys the same home, but one pours all their extra money into their home and the other pours it into the stock market, in 20-30 years the one who poured all the extra money into the stock market would have a much higher net worth.
So the person who poured their money into the stock market may have a higher net worth, or they may not.
But you only have to go back to 2008-2009 to see how well that worked out for a very large swatch of the American populous.
Over all of recorded history, the stock market has gone up 10%/year on average (not accounting for taxes/inflation).
The common rebuttal to that is that past performance is not an indicator of future performance.
Sure, but then you have to apply the same logic to the supposedly "risk-free" real estate. I think it's just as likely that your house becomes worthless as the stock market no longer giving 10% returns.
My more general argument is that for all intents and purposes the stock market is a gauge of the overall economy. If suddenly the stock market stopped returning 10%/yr the economy as a whole would be in serious trouble. No investments, real estate or otherwise, would be safe. Your stocks would be as worthless as money stashed under a mattress.
That's my logic, at least. Of course, as I said, I don't follow that logic personally. Not that I don't agree with it, just that I'm willing to sacrifice financially in exchange for the satisfaction of owning our home.
You have to pay that same mortgage even if the market tanks and your home becomes worthless. Even in the case of just "letting it go" the bank will take your worthless house and will still come after you for what remains on the mortgage.
That is why putting money into your mortgage is a "risk free" investment at 4% (or whatever your rate is).