vania-janet/multiturn-rag-retrieval-data huggingface dataset:
Common financial advice is just that - it is common and general in nature and not specific for your financial needs, your goals and your risk tolerance. Regarding the possibility of a US market not going anywhere over a long period of time, well it is not a possibility, it has happened. See chart below:  It took 13 years for the S&P 500 to break through 1550, a level first reached in March 2000, tested in October 2007 (just before the GFC) and finally broken through in March 2013. If you had bought in early 2000 you would still be behind when you take inflation into account. If you took the strategy of dollar cost averaging and bought the same dollar value (say $10,000) of the index every six months (beginning of each January and each July) starting from the start of 2000 and bought your last portion in January 2013, you would have a return of about 35% over 13.5 years (or an average of 2.6% per year). Now lets look at the same chart below, but this time add some trend lines.  If we instead bought whenever the price crossed above the downtrend-line and sold whenever the price crossed below the uptrend-line (with the first purchase at the start of January 2000), we would have a return of 93% over the 13.5 years (or an average of 6.9% per year). Another more aggressive option (but manageable if you incorporate a risk management strategy) is to buy long when the price crosses the downtrend-line and sell your existing long position and sell short when the price drops below the uptrend-line. That is profiting both up-trending and down-trending markets. Again we start our buying at the start of January 2000. By shorting the index when the market is in a down-trend you could increase the above returns of 93% by another 54%, for a total return of 147% over 13.5 years (or an average of 10.9% per year). To conclude, using a simple long term strategy to time the markets may result in considerably higher returns than dollar cost averaging over the medium to long term, and I know which strategy would help me sleep better at night.
No. As long as you are sensible, an average person can make money on the stock market. A number of my investments (in Investment trusts) over the last 10 yeas have achieved over 200%. You're not going to turn $1000 into a million but you can beat cash.  I suggest reading the intelligent investor  by Graham - he was Warren Buffet's mentor
"Yes. There are several downsides to this strategy: You aren't taking into account commissions. If you pay $5 each time you buy or sell a stock, you may greatly reduce or even eliminate any possible gains you would make from trading such small amounts. This next point sounds obvious, but remember that you pay a commission on every trade regardless of profit, so every trade you make that you make at a loss also costs you commissions. Even if you make trades that are profitable more often than not, if you make quite a few trades with small amounts like this, your commissions may eat away all of your profits. Commissions represent a fixed cost, so their effect on your gains decreases proportionally with the amount of money you place at risk in each trade. Since you're in the US, you're required to follow the SEC rules on pattern day trading. From that link, ""FINRA rules define a “pattern day trader” as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six percent of the customer’s total trades in the margin account for that same five business day period."" If you trip this rule, you'll be required to maintain $25,000 in a margin brokerage account. If you can't maintain the balance, your account will be locked. Don't forget about capital gains taxes. Since you're holding these securities for less than a year, your gains will be taxed at your ordinary income tax rates. You can deduct your capital losses too (assuming you don't repurchase the same security within 30 days, because in that case, the wash sale rule prevents you from deducting the loss), but it's important to think about gains and losses in real terms, not nominal terms. The story is different if you make these trades in a tax-sheltered account like an IRA, but the other problems still apply. You're implicitly assuming that the stock's prices are skewed in the positive direction. Remember that you have limit orders placed at the upper and lower bounds of the range, so if the stock price decreases before it increases, your limit order at the lower bound will be triggered and you'll trade at a loss.
Fake stock market trading may teach you about trading, which isn't necessarily the same thing as investing. I think you need to understand how things work and how to read financial news and statistics before you start trading. Otherwise, you're just going to get frustrated when you mysteriously win and lose funny money. I'd suggest a few things: Also, don't get into individual stocks until you have at least $5k to invest -- focus on saving and use ETFs or mutual funds. You should always invest in around a half dozen diversified stocks at a time, and doing that with less than $1,000 a stock will make it impossible to trade and make money -- If a $100 stock position goes up 20%, you haven't cleared enough to pay your brokerage fees.
Do you currently own stocks, trade, track stocks all day long, etc.? If the answer is no to any of those, buy-side is really really hard. They want people who live and breath investing, markets, news, companies, because that's what they do. Also, training is effectively non-existent on the buy-side due to the size of the shops (some can have $10b with 10 people including admins). Now lets talk sell-side. This is where I'd recommend you put your resources if you're really passionate about it. They tend to hire people without experience more often into entry-level jobs (b/c most are larger investment banks that use research to promote underwriting/investment business). Also, you need to have a pitch, but not as extensive as on the buy-side (those 1-2 pagers I talked about). The best advice I can offer is to hop on a Bloomberg/TR/CapIQ terminal if you can and just start finding email addresses of sell-side analysts (they publish them in their reports), and start writing the analysts directly expressing your interest in the business and your desire to talk with them. Be frank about where you are in your career, but show a true passion for research, and that you are ""hungry."" Attach your resume and keep the email short, a few sentences with maybe some bullets about how you could help that company. Spend the time to personalize it to that person. Follow up with a phone call in 1-2 weeks. They will appreciate the candidness and you'll find them to be very receptive. Even if these analysts don't have a job available right there, if they like you, they will pass you on to someone who might. This is how networking works, that guy might not have a job, but someone is always hiring, and its a tight knit community. The other option is to work for any finance firm in some role for 3-5 years then go back to get an MBA. With an MBA from a top school you can basically transition into anything. PM me if you ever want to talk over IM. I'd be happy to chat."
"Contribute as much as you can.  When do you want to retire and how much income do you think you'll need? A $1M portfolio yielding 5% will yield $50,000/year. Do some research about how to build a portfolio... this site is a good start, but check out books on retirement planning and magazines like Money and Kiplinger. If you don't speak ""money"" or are intimidated by investing, look for a fee-based financial advisor whom you are comfortable with."
"Surprising that you have a ""finance background,"" but don't know what a cold-calling broker does - he calls people he's never met and tries to bullshit them into buying stock or making some other trade.  You can call people from contact lists obtained from marketing firms, people who hopefully fit a certain income and age bracket best suited to investing.  For some people it's ok, for others it's complete hell.  If you fall into the latter category, your salary being based on how much trading you generate every month can make it even worse.  If you want an idea of cold-calling, call 100 people today at random from the phonebook and try to convince them that they need to buy something."
"Before going into specific investments, I think it would be a good idea to assess how ""free"" is that $5000. How much do you have to rely on it in emergency? You always want to buy low and sell high. However, if you need to make unplanned withdraw from an investment, you risk unfavorable market conditions at the time when you need the money, and lose money that way. One common suggestion is to keep 3-6 months living expense in checking/saving/very, very liquid/short term investments. After that, you can invest the rest in more profitable ventures. Assuming that you are all set in that regard, next consideration is whether you have any goal for the money besides generating the maximum return. Is this for retirement, buying a house/apartment a few year down the road, graduate school, emergency cash store for the time between graduation and getting a job, or traveling a year in Europe after graduation? There are myriad of other possible goals. Knowing that you get a better idea of the time frame involved in the investment, and what you need to do with your money. If this is for retirement, you just need to generate the highest possible return for 40-50 years, while minimize taxes when you have to withdraw that money (there are more nuanced concerns, but large idea-wise that's what you need to do). If you want it for a trip to an exotic location in 2 year, then your primary goal will be to preserve the value of your capital, while assessing whether you need to manage foreign-exchange risk. The time frame also rule in or rule out certain types of investments. If you are planning to use the money to purchase a house in 5 years, IRAs probably would not be what you are looking for. If you are planning to retirement, short term CD would not be the most effective way. After figuring out a bit of what you are trying to do with the money, I think how you want to invest it will be much more clear to you. In case of retirement, people seem to generally recommend no load index funds, and mid-cap growth funds. Nothing is really off the table, since your investment time frame is so long, and you can tolerate risk.
If you have no paycheck, I presume you are doing your own business. That is included. Also, that is only limited to business, Studies, personal growth and other things are different again.  Oh, and if you can predict with high probability a high profit event in 5 years time, considering today's climate, I'm V.impressed. I'm relying on having as many basis as possible covered. It's a bit like a lottery (Though the odds are a lot better), the more tickets you have, the better your chances of hitting the big one.
"You have a few options: Option #1 - Leave the money where it is If your balance is over $5k - you should be able to leave the money in your former-employer's 401(k). The money will stay there and continue to be invested in the funds that you elect to invest in. You should at the very least be receiving quarterly statements for the account. Even better - you should have access to some type of an online account where you can transfer your investments, rebalance your account, conform to target, etc. If you do not have online account access than I'm sure you can still transfer investments and make trades via a paper form. Just reach out to the 401(k) TPA or Recordkeeper that administers your plan. Their contact info is on the quarterly statements you should be receiving. Option #2 - Rollover the money into your current employer's 401(k) plan. This is the option that I tend to recommend the most. Roll the money over into your current employer's 401(k) plan - this way all the money is in the same place and is invested in the funds that you elect. Let's say you wanted to transfer your investments to a new fund lineup. Right now - you have to fill out the paperwork or go through the online process twice (for both accounts). Moving the money to your current-employer's plan and having all the money in the same place eliminates this redundancy, and allows you to make one simple transfer of all your assets. Option #3 - Roll the money from your former-employer's plan into an IRA. This is a cool option, because now you have a new IRA with a new set of dollar limits. You can roll the money into a separate IRA - and contribute an additional $5,500 (or $6,500 if you are 50+ years of age). So this is cool because it gives you a chance to save even more for retirement. Many IRA companies give you a ""sign on bonus"" where if you rollover your former-employers 401(k)...they will give you a bonus (typically a few hundred bucks - but hey its free money!).
Investing it in what? Unless you're putting it into an account that lets you avoid taxes on the income, your $100k becomes about $74k after federal income taxes. If you take $50k of that and invest it, you're now at $24k. You're living a very barebones life at that point.
"I up voted JoeTaxpayer but i would like add a couple of things. Dollar Cost averaging over a 5 day period is in no way practical.  If you get a 1% swing in that time that would be quite a lot. Personally I think 5 years is way to long.  When markets go down they go down fast. I would suggest 1 to 2 years investing quarterly.   I would hate seeing you miss out on market gains for a 5 year period on the last of your money. The whole point of Dollar Cost averaging instead of market timing is the mantra ""Its about time in the market not timing the market""  So if you have money on the sidelines for years you are missing out on your time in the market."
"There are a few major risks to doing something like that. First, you should never invest money you can't afford to lose. An emergency fund is money you can't afford to lose - by definition, you may need to have quick access to that money. If you determine that you need, for example, $3000 in emergency savings, that means that you need to have at least $3000 at all times - if you lose $500, then you now only have $2500 in emergency savings. Imagine what could've happened if you had invested your emergency savings during the 2008 crash, for example; you could easily have been in a position where you lost both your job and a good portion of your emergency savings at the same time, which is a terrible position to be in. If the car breaks down, you can't really say ""now's a bad time, wait until the stock market bounces back."" Second, with brokerage accounts, there may be a delay before you can actually access the money or transfer it to an account that you can actually withdraw cash from or write checks against (but some of this depends on the exact arrangement you have with your bank). This can be a problem if you're in a situation where you need immediate access to the money - if your furnace breaks in the middle of winter, you probably don't want to wait a few days for the sale and transfer to go through before you can have it fixed. Third, you can be forced to sell the investments at an unfavorable price because you're not sure when you're going to need it. You'd also likely incur trading fees and/or early withdrawal penalties when you tried to withdraw the money. Think about it this way: if you buy a bond that matures in 5 years, you're effectively betting that you won't have an emergency for the next 5 years. If you do, you'll have to either sell the bond or, if you're allowed to get the money back early, you'll likely forfeit a good amount of the interest you earned in the process (which kind of kills the point of buying the bond in the first place). Edit: As @Barmar pointed out in the comments, you may also have to pay taxes on the profits if you sell at a favorable price.
any business selling for only 1,000 will not be worth getting into. marketing alone should cost you more than that if you have any genuine hope of turning a profit. buy some books instead. work for someone, learn the ropes, read books, practice what you read at work, then start something with your savings in 5 years.
http://www.reddit.com/r/investing/comments/2d15nj/everything_is_on_the_table_property_businesses/cjl7nxp  &gt;Not to brag, but I started with 12k a year ago and I plan on having 1M by next year... I think it's entirely possible with smart trades and a lotttttt of self-education. I made the majority of it on penny stocks so far, but have recently switched primarily to options plays and have had some very bad luck, but mostly good fortune. So, in that vein, in your hypothetical situation, I would pay myself to educate myself and then trade for the 1M and keep all the fees that would be paid to someone for everything that was done.. Then I would take the remainder of the 10 years off and travel around the world :)   RachelTrades,  You are walking into a buzzsaw.  You do not understand the risks you are taking, and your gambles will inevitably result in you losing nearly everything.  Do yourself a favor and discuss your investing process with a professional.  Describe your trades and how you evaluate your positions with this individual and try and hear them when they tell you how badly you are setting yourself up for ruin.  I realize that you have no reason to listen to a random person on the internet, but I hope that you are able to take a moment of honest reflection and save yourself
"It is difficult to become a millionaire in the short term (a few years) working at a 9-to-5 job, unless you get lucky (win the lottery, inheritance, gambling at a casino, etc). However, if you max out your employer's Retirement Plan (401k, 403b) for the next 30 years, and you average a 5% rate of return on your investment, you will reach millionaire status.  Many people would consider this ""easy"" and ""automatic"". Of course, this assumes you are able to max our your retirement savings at the start of your career, and keep it going.  The idea is that if you get in the habit of saving early in your career and live modestly, it becomes an automatic thing. Unfortunately, the value of $1 million after 30 years of inflation will be eroded somewhat.  (Sorry.) If you don't want to wait 30 years, then you need to look at a different strategy.  Work harder or take risks.  Some options:"
I suppose it depends on your goals and expectations, but I'd argue its not easy. Regardless of the chosen sub discipline of trading or investing you pursue there will be some theoretical and research work to do, some learning of the mechanics of the market, and some 'ropes' to learn upfront. After that the time frame you are working in, the complexity and time requirements of your methodology dictate how much time you need. I personally spend enough time on it to be considered equivalent to a part time job, but I enjoy continually learning and researching. If I weren't constantly trying to improve and research I would say the mechanics might take a half hour a day. However, I would gladly do it full time if I were able. I believe that is important, if you simply want to make lots of money but hate the process you will likely fail. As mentioned earlier if you are new to this the majority of your time will be spent initially learning whats out there, trying various things out, and finding what works for you. There are a lot of different ways to approach the market and a number of markets to approach. For me it took two years to find my niche and become profitable. Learn to loose small and keep your itchy fingers in check during that learning curve.
Your plan won't work. Working 40 hours a week at federal minimum wage (currently $7.25 / hr) for 52 weeks is an annual income of just over $15,000. Even assuming you can reliably get a return of 15% (which you definitely can't), you'd need to start with $100,000 of assets to earn this poverty income. Assuming a more reasonable 7% bumps the required assets up to over $200,000, and even then you're dead the first time you need to make withdrawals after a mistake or after a major market downturn. As a fellow math Ph.D. student, I know your pain. I, too, struggled for a while with boredom in an earlier career, but it's possible to make it work. I think the secret is to find a job that's engaging enough that your mind can't wander too much at work, and set aside some hobby time to work on interesting projects. You likely have some marketable skills that can work for you outside of academia, if you look for them, to allow you to find an interesting job. I think there's not much you can do besides trying not to get fired from your next McJob until you can find something more interesting. There's no magic money-for-nothing in the stock market.
Using a simple investment calculator to get a sense of scale here, to have 70k total, including the 500 a month invested, after ten years you just need returns of 2%.  To earn 70k on top of the money invested you would need returns over 20%.  To do that in five years you would need over 50% annual return. That is quite a big difference.  Annualized returns of 20% would require high risk and a very large amount of time invested, skill and luck.  2% returns can be nearly guaranteed without much effort. I would encourage you to think about your money more holistically. If you get very unlucky with investments and don't make any money will you not go on the vacations even if your income allows?  That doesn't make a lot of sense.  As always, spend all your money with the current and future in mind.  Investment return Euros are no different from any other Euros. At that point, the advice is the same for all investors try to get as much return as possible for the risk you are comfortable with.  You seem to have a high tolerance for risk.  Generally, for investors with a high risk tolerance a broadly diversified portfolio of stocks (with maybe a small amount of bonds, other investments) will give the most return over the long term for the risk taken. After that generally the next most useful way to boost your returns is to try to avoid taxes which is why we talk about 401(k)s so much around here.  Each European country has different tax law, but please ask questions here about your own country as well as you mention money.se could use more ex-US questions.
If we assume a 7% return for the six years, that's about $1400 the first year and less each year after. Perhaps $4500 over six years. But you aren't going to get a 7% return if you keep $24,000 in a bank account in case you have to pay off the loan. Instead, you'll get more like 1%, less than inflation. Even five year Certificates of Deposit are only about 2%, right around inflation (1.9% for previous twelve months). You can't keep the $24,000 in a securities account and be sure that it will be there when you need it. If the market crashes tomorrow, your $24,000 might be worth $12,000 instead. You'd have to throw in extra money from elsewhere. Instead of making $4500 at the cost of $1500, you'd have paid $25,500 for $12,000. Not a good deal. So for your plan to work, that $24,000 needs to be in an account that won't fall in value. You either need to compromise on the idea of a separate account that is always there when you need it, or you have to accept rather low returns. Personally, I would prefer not to have the debt and not to pay extra on the insurance. But that's me. The potential investment returns are not worth it to me. If you give up the separate account, you can make a few thousand dollars more. But your risk is higher.
One way a lot of people bypass the pattern trading equity requirement is to open multiple brokerage accounts. You have $10k, put $5k in one and $5k in another. Although I don't recommend it!