Hypothetical $1500 investment strategy

[Neofelis Nebulosa]

Just keep saving your pennies until you can afford one share of:
Berkshire Hathaway Inc. (NYSE:BRK.A)

You're almost there...
no starbucks, pack a lunch, turn down your thermostat/wear a sweater

 

[EDS1275]

I'd just add that money to a fund I already own or mess with a couple individual stocks that my brother recommends because he researches all that stuff.

 

[Neofelis Nebulosa]

Honestly I would pick an energy company that pays a dividend.

Maybe Occidental Petroleum, ExxonMobil or Enbridge

 

[Tone deaf]

If I was looking to make a little extra pocket change, I'd probably day trade one particular stock that I follow (I don't own it). It is hugely undervalued (like 25% of its asset breakup value). It can move 15% in a day. The problem is, it can go either way. I can usually tell by looking at the level II quotes and what the pending orders look like. However, I am looking at possibly doing 'something' with the company and I prefer to keep things squeaky clean (that's why I don't own the stock, today - not that I am in any way prevented from owning it or that there would be anything wrong with owning it).

 

[nauc]

poker is beatable...

https://en.wikipedia.org/wiki/Dan_Bilzerian

 

[PeteK]

If I was looking to make a little extra pocket change, I'd probably day trade one particular stock that I follow (I don't own it). It is hugely undervalued (like 25% of its asset breakup value). It can move 15% in a day. The problem is, it can go either way. I can usually tell by looking at the level II quotes and what the pending orders look like. However, I am looking at possibly doing 'something' with the company and I prefer to keep things squeaky clean (that's why I don't own the stock, today - not that I am in any way prevented from owning it or that there would be anything wrong with owning it).

Pattern day trading requires a $25,000 account minimum. Plus even if I could, starting with only $1500, commission fees would eat up a huge chunk. You'd need a big profit margin every time to cover the trading fees

 

[PeteK]

Weed stocks are a pretty good gamble, phot, mjna, cbis, could all potentially grow

I will likely buy some stocks in that sector because they are dirt cheap. But I'm leary of putting too much into that strategy. Of course if I spend $100 on a stock that trades for $.02 a share, I'll be happy/pissed if it goes up to over a dollar. I'll be happy to win that bet but pissed I didn't bet more!

 

[Frogfur]

A bag ?

 

[wizard1183]

All your eggs in one basket? I'd probably do an index fund with $1000 and maybe buy some cheap stocks with the remaining $500

Then go that route. Just invest it into the stock market. All your eggs in one basket approach is not bad when only investing $1500. But if you're afraid of risk and want some return then an index is good. Just don't expect to make a boat load.

Better strategy:
30% individual stocks
30% index/mutual funds
30% liquid

 

[Tone deaf]

Pattern day trading requires a $25,000 account minimum. Plus even if I could, starting with only $1500, commission fees would eat up a huge chunk. You'd need a big profit margin every time to cover the trading fees

By day trading, I mean getting in an out on a short term basis, but maybe not closing out each day. I would just trade it in one of my existing accounts. The commission on each round trip would be about $10.

If I played it, this past week, I'd be up 30%. So, a $440 net gain.

The funny thing is that the company is trading at a market cap of $200 million, when it is sitting on some highly specialized assets (the kind I have 20 years of experience valuing) that are worth at least $1.8B...

 

[PeteK]

By day trading, I mean getting in an out on a short term basis, but maybe not closing out each day. I would just trade it in one of my existing accounts. The commission on each round trip would be about $10.

If I played it, this past week, I'd be up 30%. So, a $440 net gain.

From what I understand, if you make more than 4 trades in a 5 day period you get flagged as a day trader. Doesn't mean it's illegal but different rules apply

 

[PeteK]

But what stock is up 30% this week? Gimme some dirt man!!!

 

[Tone deaf]

But what stock is up 30% this week? Gimme some dirt man!!!

It's very risky and it isn't always going up. It just bounced off of it's 52-week low. It has been a train wreck for the past 14 months. I happen to have a long history with the company (never been an insider). So, I know what they have and where most of the bodies are buried. They are burning cash, but they are trading below 1x cash (they have quite a bit of cash...). I also happen to have developed a theory about who will end up buying them out (huge Asian corporate player) and as it just so happens, one of my clients is one of their (large potential acquirer) biggest suppliers and has asked me to research the market opportunity for their products. However, if they enter a new market, it is likely in coordination with the guys that I predict will ultimately buy this company. If that player buys the company, it will signal a move by some of the biggest Chinese companies to move into a "new" market and will bouy the values of all the independent players in the sector.

 

[RedSkwirrell]

Me personally?
Shares
BP or Royal Dutch Shell.

Brent's at $56/barrel today and will be at +$60 next year.
Most analysts reckon on $80 by 2020.
That affects the share price.
BUT, I'm getting 7% annual dividend anyway.

I bought BP in April and have made 40% (growth and dividend).
I don't see a similar return now as the price has risen so much.
I see the share price reaching $6.00 (maybe as early as next year), but I'll probably keep taking the dividends until 2020 and re-visit.

Right now I'm watching the interest rates.
U.K./U.S. banks and U.K. property are the next opportunities.

The interest rate may rocket upwards once it starts.
If it does, and gets above 7%, stick it all in a deposit account.

 

[Tone deaf]

Me personally?
Shares
BP or Royal Dutch Shell.

Brent's at $56/barrel today and will be at +$60 next year.
Most analysts reckon on $80 by 2020.
That affects the share price.
BUT, I'm getting 7% annual dividend anyway.

I bought BP in April and have made 40% (growth and dividend).
I don't see a similar return now as the price has risen so much.
I see the share price reaching $6.00 (maybe as early as next year), but I'll probably keep taking the dividends until 2020 and re-visit.

Right now I'm watching the interest rates.
U.K./U.S. banks and U.K. property are the next opportunities.

The interest rate may rocket upwards once it starts.
If it does, and gets above 7%, stick it all in a deposit account.

The tricky thing on interest rates is that the Fed needs to raise rates in order to regain some of the tools of monetary policy that it doesn't currently have (if it needed to, the Fed can't cut rates). However, the new administration has put jobs on the top of the agenda and for jobs to grow, so must the economy. If the Fed starts bumping rates too soon, the recovery will never get a chance to take flight. They will be hoping that if they raise rates this week, no one will notice. However, after that the pressure will be on the Fed to stay out of things until there are a couple quarters of growth in the trailing numbers. I'd look for another hike Q4 '17. Anything before that is going to lead to acrimonious debate over the politicizing of the Fed (i.e. they are out to ruin a potential recovery). Currently, there are absolutely NO indicators that the Fed should raise rates, other than they need to get some of the monetary tools back.

I do see several years of economic expansion ahead and with time, I see the Fed bumping rates with some regularity. This will cause an imbalance between the dollar and the pound. Interest rate differentials (between the two countries) and risk are key drivers in currency fluctuations. If risk stays about the same and the Fed hikes a quarter point, the Bank of England will need to do the same in order to maintain the pound/dollar relationship. So, I agree wholeheartedly that you are correct, interest rates will rise throughout the G7, over the next 6 years.

 

[rcole_sooner]

$1500 is not really an investment. $15,000 maybe.

We are too poor to invest ... other than slowly over time.

 

[RedSkwirrell]

$1500 is not really an investment. $15,000 maybe.

I disagree, and on a massive scale.
It's not the size of the investment it's whether it's working for you.

$15.00 can be an investment, albeit on an arguably very small scale.
But $15,000,000.00 is only an investment when it's working for you and not sitting in your pocket.

I started saving less than £1000.00 per year (I think my first year I only saved £100) and just kept going.
I was never particularly well paid (maybe the last two or three years of my career) but I stopped needing to work for anyone else three years ago in 2013, when I was 53.

I retired early because I have other things I want to do, and why should I spend my time wearing my ass down so someone else can sit on theirs?
I was able to do it solely because I had saved, sacrificed, and invested - and because of how I invested.
No other reason.

Before investing in stocks I saved in bank deposit/savings accounts, anything which paid me interest.
I only had one (financial) debt in all my life; The mortgage on my house, which I saw as a time-critical investment.
I paid that off in eight years because being in debt is expensive and only works for someone else.

This year I've already made twice the income I made at my last actual job, which is ten times more than I need for a comfortable life.

If I survive to 2040, I'll be eighty and my annual savings income will be over £1M, of which I will actually only be drawing probably between £50k and £100k a year (depending on how bad Brexit will affect us by then).
Everything else will go into my estate and be left to my Brother's kids.
(They have no idea I'm planning this btw or even how much I'm worth now, let alone by then).

In the U.K. we can invest in 'vehicles' which allow us to shelter investments from income and capital gains tax.
So the best part (for me) of all this is that, because I have singularly exploited those as soon as I was able to, using those other small investments which had since grown, I have stopped paying having to pay income tax and never will again.

If I could offer anyone advice for their future it would be to start saving with whatever they have.
Even if it means sacrificing something today.

[edit: btw, don't listen to banks telling you that you can only get 1% interest).
I record my financial performance every year so that I know each year's performance and my overall average since I began investing.
Up to this tax year (April to April) I'm on an average annual growth of 15%.
So far this year alone, I've made over 30% (although that may disappear completely if 'the crash' everyone's waiting for happens).
I don't take long-shots.
I just learned to budget and then started to do something useful with everything I earned.

 

[rcole_sooner]

Agreed overtime invest any and all one can, no matter how small.

I guess I was thinking a one time stock buy or such. Which to make any real money, takes a lot of money.

But if all one is doing is messing about, there are way worse ways to spend $1500.


Oh, hell, I don't know crap. I'm still a workin' shmoe. If I knew how to invest I would have retired several years ago, instead of hoping I'll be able to in several more years. Really I am just too lazy to put in the amount of time it takes to learn and get it done ... much like my guitar playing.

 

[PeteK]

It's kind of an experiment. I know it's not enough to make me rich but is a way to dip my toes in the water and learn how the markets work. If I lose it all, it wasn't the end of the world. If I do alright, I may trust myself with more money.

 

[Sin Nombre]

Agreed overtime invest any and all one can, no matter how small.

I guess I was thinking a one time stock buy or such. Which to make any real money, takes a lot of money.

But if all one is doing is messing about, there are way worse ways to spend $1500.


Oh, hell, I don't know crap. I'm still a workin' shmoe. If I knew how to invest I would have retired several years ago, instead of hoping I'll be able to in several more years. Really I am just too lazy to put in the amount of time it takes to learn and get it done ... much like my guitar playing.

An S&P 500 index fund or etf is a good way to go for a person who does not consider himself a hot-shot and does not have a lot of money, but it should be for the long haul, not a quick slam dunk. Personally I am going into defense mode and selling stocks at good prices before the sh*te hits.