This is one of the reasons I wanted to create this thread. Globally, there has recently been a massive surge of new investors who don't really know the difference between gambling and investing.

And as I rejoice seeing new, normal people investing thus reducing the wealth gap, I'm afraid many of them will get burned and lose their money when they are gambling their money on bankrupt memestocks.

I'd like to use this thread to direct newcomers towards long-term, boring, index fund investing and have them learn what compound interest is, to forget the get rich quick-schemes and realise why a 6% compounding annual inflation fixed profit is good.

A few people listen, most lose interest if I can't promise them a jackpot - millions by investing 100$, but instead tell them to work hard, save from their income, and repeat for 20 years.

Sounds good.

You talking about those reddit raids on markets? Btw do you know where they coordinate?

On topic of long term investments, it is what I'm actually interested in, cause I have some(really not much) fiat laying around.

And I believe in theory about huge big depression tier crisis gonna strike us really soon.

So I'm looking for ways to preserve value of fiat I have now.

It's tricky cause I believe most markets are gonna go down.

Question is which are not going to fall.

Intuitively I think it's gold/platinum etc. Because they never do (or am i wrong?).

Maybe it's worth looking at big depression to see what didn't fell back then.

We are currently living crazy times - valuations doesn't matter anymore and some stocks are going up due to hype and crazy hopes for the future.

Bubbles can be used to make exceptionally good profits but they can be extremely dangerous for your wealth if you are left keeping the bags when everyone else sells.

A basic rule is that if you hear about something in the news, you are too late. The one who makes money off of bubbles has bought long before, and is preparing to sell when it's on the news.

Notice patterns. Be careful. They repeat themselves in bubbles, euphorias and manias.

I want to encourage people into long term saving, buying stocks or funds should be more like washing your teeth - boring daily routine and you don't really get a price, but in the end good dental hygiene is rewarded.

Timing is impossible, thus one should not be scared to start investing/saving, in the long run you lose more money by staying outside the markets than participating in them.

 

They are a symptom of it, but it's not only them. After covid-lockdown there are globally millions of people who suddenly have a surplus of money to spend - they are not eating at restaurants or traveling? So they might as well put that money on stocks. And thus directly after the covid crash the stock market has been going up a lot and many companies valuation has gone through the roof.

These redditors and the poor souls they sucked in - I feel bad seing screenshots of people putting their life savings in and losing them operated on that reddit site r/wallstreetbets and I think its discord channel from where they launched their "attacks". Problem is, regulation has not kept up with technology once again, so they masked a typical coordinated pump and dump into a "noble" crusade against shorting hedgefunds and lured plenty of people in. Today they can also easily use tens if not hundreds of bots to post and hype up their stock - and shoot aggressively down anyone trying to warn people. They also spammed the hype on different sites, like Ylilauta, it's finance board was filled up with threads about this shit.

 

 

In the old days, careful people kept it on bank accounts and got interest. Today, there really is no other place to go than to stocks, unless you buy maybe physical gold or an apartment or land. They just need more capital, and you can buy a fund for like 15$ nowadays.

Buy a cheap (banks want to make money and trick you into paying high fees) index fund each month, and be ready to wait for 20 years, 10 years minimum for results. It is not some automatic moneymaking-machine, even diversified funds are supposed to go up AND down, otherwise there would be 0 profit to be made.

 

 

It is impossible to know, and knowing better than the markets is even more impossible. All available information on the planet is fed into the markets before you know even the slightest about it. You can end up waiting 2, 5, 7, 10 years for a the next crash. We just had one last year.

 

 

When investing in stocks there's always a risk. But there really are no alternatives anymore. IIRC the dollar fiat loses value ~2,5% each year, which should be calculated as a negative profit when keeping your fiat in cash.

It can feel safer but you are losing money each year. Keeping them however on the stock market does not mean you can pick them out anytime you want, it might be a year when it's down for example -20%.

 

 

They go up and down like everything else, but the strange thing that has happened lately is that in the old times, when there was a crisis, stocks went down and gold went up. Now it has changed - stocks went up and gold is still up! So it's not anymore the safe haven it used to be. We live completely new times now.

Also, bonds don't give any yield anymore, so even more money is pushed into stock markets looking for profit.

 

 

The past is like a foreign country - they do things differently there.

Not really. I only have diamond hands on some stonks.

 

Are ya winning, son?

 

This is the strategy I plan to use when I get my paycheck (in amount of 2500 + 2500 I get from margin)

I lost like 150 EUR on Tesla. But recovered it with investments in palantir 21 stonks in november. Now I just join the cause and wait for paycheck for my strategy. I also switch broker because the one I used is shit for optiontrading.

 

Sounds complicated and dangerous. I hope it works out for you, let's hope you don't end up on the losing side.

If you make 100% of your original investment, I really recommend taking that 100% out and putting it to the side. So if you lose the rest, you've only lost someone elses money.

Look again to the first picture

The plan is to make 1% week or 50% per year. If my calculation is correct about margin I will be making 50% out of 5000 and not 2500 which is 100% of my investments. The idea is to bet a lot of money on risk but have low probability of loss. One way or another I will be trading on companies with solid numbers which are about to grow.

I didn't explain why you should look there. The plan is to reinvest accumilated profits and and grow amount of cash. Eventually when I have enough I will invest in dividend stocks and retire.

 

I can only give you a warning of the risks that lie ahead, but I do wish you succeed in your goal. Just be careful. Be ready to face something that you didn't expect to happen, and have a backup plan if it goes badly.

Good luck on your mission, the richer Bernds are, the better. Normies shouldn't have it all.

Anyway if I won't forget I start posting in this thread my trades.

Thank you bernd. I understand that but I still think that it is better trying than not. I will learn to be careful of course.

I have 21.1 buttcoin which I'm holding

I bought 111 of them in 2013 but long story short, I dun goofed

 

Sure, let us hope it goes well. Best of luck!

 

 

I think I talked with you earlier at Kohlchan, you sold some of them earlier, right? That's still a nice amount of cash you got there, if you exchange them into FIAT someday though.

I'm a young bloke and I've only in recent years started thinking about money. I used to find it stressful until I realised that I could control this stress by being in control of my finance.

My dad has a background in accounting so he was a bit of a starting point for me learning about self-finance. I read about the Bogglehead methodology for investing and it makes a lot of sense. I'm aiming my portfolio towards roughly with different broad indexes I put most of my money into, but at the same time it's a bit boring and I do enjoy reading about companies doing interesting things out there.

I'm still learning to develop stronger hands. Whenever a stock or crypto or whatever rises too quickly I get a bit worries and the temptation to sell kicks in. Trying to hold for the medium term till I'm no longer a student and a house becomes a near possibility.

Very ambitious plan. Hope it works out for you.

Though I am curious about the tax implications for you? In Australia, every time you sell the profit gets calculated as income on your tax statements so you have to hold onto portions profits to later pay taxes on.

Bollinger bands and RSI are some simple indicators that help you determine a reversal if near. It's not a 100% sure thang though, ever

 

You are doing it correctly. Taking responsibility and managing your wealth shouldn't be about trying to get rich and quick. It's like working out at the gym, you want to get better and better.

It will bring you safety and stability.

Many people live in two extremes, either they burn all their money on useless things or they gamble it all trying to get rich.

 

The bogglehead approach should take you to aim towards a single ETF. Vanguard has a total stock market ETF. You don't need anything else. I personally use ETF:s that follow the MSCI ACWI, where I have the overwhelming part of my wealth, but I keep it interesting by trying my luck/skill with smaller amounts of cash with active stock picking. But that is me, I knowingly break the rules.

Newbies should start with a single globally diversified ETF. It doesn't get easier, cheaper, more effective than that.

 

Now, I want to speak about recent events. GME seems to be breaking down, and the dust is starting to settle, and many newbies are facing a harsh truth.

The internet is starting to fill up now with stories as sad as these - some of them are probably made up, but some of them are real people who went and gambled not only money, but also things that are much more valuable than fiat - your loved ones.

 

If we take a look at this picture, it shows us some basic psychological behaviour an inexperienced male investor usually does. It is not sure why, but males tend to be much more impulsive and risky than females.

In this story a typical male ignored all risks, gambled 50% of his savings, the attachment & respect of close ones and even some of their money.

He didn't do it because he was evil, he was lead to this by his biological programming. We are animals driven by our feelings, not our brains. It's a hard pill to swallow. Me, you, them.

It is extremely hard to control those feelings and keep them at bay.

Imagine being the owner of an elephant and sitting on its head with that little steering stick. You maneuver and steer it successfully - until the elephant gets scared. You are no longer in charge.

For thousands of years these feelings have steered and controlled us, and likely will in the future. We can't just shut them off. That is why it is difficult to sit on your hands and do nothing when everyone else is seemingly getting rich without effort.

 

Be humble, be scared, be careful, be patient.

Thanks. That gives me some stuff to do some reading about.

And there is so many people out there; friends, family, co-workers, etc, encouraging frivolousness.

Interestingly, I was just having a look and Vanguards main global ETF on the Australian Stock Exchange follows the MSCI World index. Couldn't see on following the ACWI but I'll have to do some more digging.

 

We here in Europe got struck a bit by overprotectionism and EU recently forbade us from buying any ETF:s from USA if they don't create for each individual language a translation of everything.

 

They have recently started circumventing it by listing a new version of the ETF:s in Germany, but the numbers of ETF:s are still lackluster.

So I don't know what is available in Australia. We live in a bit different worlds because of this and I've focused my energy on the ones that are available to me, naturally leaving everything outside of it in the dark.

But:

Ishares version: https://www.ishares.com/us/products/239600/ishares-msci-acwi-etf

 

And Vanguard have their own version, but I am not very familiar with Vanguard products because EU "protects" us from their products. I think however that "Vanguard FTSE All-World UCITS ETF" comes very close. I have that one listed in Germany (VWCE) in my portfolio.

I just want to say that anyone with an interest in investing should be in the DeFi sphere by now. If you're not, read up about DeFi and DAO's and consider the limitless possibilities and the endless potential for growth and even the political implications. There is no reason to be in stocks both for financial reasons and (agnostic) political reasons.

 

I can elaborate further and share my personal thoughts if there's interest

 

What is that even supposed to be? Wouldn't it be more effective to pump stuff like this on an imageboard with more than 10 posters?

 

Anyways, we're living completely crazy times, Bernd. Be careful. My bet is that all the fun will come to an end very quickly when it happens, I don't know but we'll face a crash. Everything isn't supposed to just go up as it is now. The fear is gone, everyone is just greedy and hyped up. Good companies will recover as always, memes and imaginary money won't.

What about my post makes you think I'm trying to sell you something? Many were burned by centralized exchanged like Robinhood last week, yet few know there is a flourishing alternative behind the corner that will solve all issues of centralization and more. If you only know about Bitcoins and PnD scams like Dogecoin and Ripple, you'll obviously be skeptical and expect us to lose everything. But that won't happen, not in the long run. Decentralized finance (DeFi) is a form of finance that leaves out the middleman. Here are some of the main novelties that started the storm last year:

 

This is where the fun begins. Rather than being subject to the whims of a CEO and a board of directors, a DAO is subject only to trustless and transparent rules in open-source code. At most, holders of a token of this DAO can participate in governance by voting for proposals to change or add to the code if they reach consensus. That's all there is to it.

https://academy.binance.com/en/articles/decentralized-autonomous-organizations-daos-explained

A DEX is a protocol that allows you to trade directly with other users without the broker as a middleman. You don't even need an account - a wallet is enough. All transaction fees go directly to those who maintain the pool you trade in - ie. other individuals.

https://academy.binance.com/en/articles/what-is-uniswap-and-how-does-it-work

AMM is the other incentive to become part of a liquidity pool, besides transaction fees. This is in essence the same as market makers who capture the bid/ask spread, but again, instead of these people being licensed brokers they're just ordinary people who let a bit of transparent code do the work. Zero labour required.

I've never really used these, but it's essentially the same principle: smart contract, no middleman, near instant. Although you need to provide immediate collateral, unlike with real world loans.

Again, something really interesting that I don't meddle with. Synthetix already supports assets such as gold and crypto to be traded synthetically on the blockchain, thereby capturing the traditional markets. Expect them and other platforms to introduce stocks and other assets over the course of time.

https://research.binance.com/en/projects/synthetix

 

Now obviously, not all projects are destined to succeed. But the ideas themselves are not going anywhere. Anyone who still thinks blockchain technology is about funny imaginary money is hopelessly stuck in the past.

it hasn't even begun yet

Surely governments are going to want to be able to easily tax this?

DIAMOND HANDS

Of course, but can they reliably do so? The government has no idea how much wealth I have in cryptocurrencies unless I obediently tell them. Anyway, taxed or not, we're still collectively cutting out the middle man and establishing trustless loans and trades between each other at lightning speed.

I wish I knew how to trade options. My portfolio is in healthcare, automotive companies, and mining companies. Very 70iq.

I don't think they really reliably can. They probably want to though.