Question for finance heads

[acri1]

I'll preface this thread by saying that personal finance isn't really an area I'm all that knowledgeable about. I know way more about stuff like computers/science/philosophy than finance. Hoping to change that, but if my questions seem kind of that's why.

But my question is essentially...what's a low-risk way to get a decent return on some money you have saved up? Say, in the 20-30k range.

I used to just keep all my shyt in my savings account at my credit union, but I noticed that my interest rates have been incredibly crappy the last couple years. In fact, last time I checked, my dividend rate on my savings account was 0.100%.

Obviously that's not even enough to keep up with inflation. So last year I opened up an IMMA account and transferred most of my savings into it thinking maybe I'd get something better...to find out that my rate had gone up to a whopping 0.200%.


So obviously I'm taking an L by just leaving my money sitting in that type of account, but as I said I'm not too knowledgeable on what the best way to get a better return on it would be. Was thinking about maybe a CD or something, but I'm not sure how much better that'd be. I'm kind of risk-averse and not too knowlegable about stocks, so I dunno about trying to get into the stock game. I'm basically looking for a low-risk, low-effort (yeah, I'm lazy) way to get a better return on my savings than I am right now.

Any basic suggestions for a clueless-about-finance person?

 

[无名的]

You're right in that what you're returning in your savings account won't even keep up with inflation, so your cash is wasting away. A CD is relatively worthless too. My Capital One 360 Savings account yields more than a CD until you're talking about a 5 year CD and even then, it's not much more. So I guess if you want something safe and slightly more than your savings, you could go with a long term CD.

If you want to be completely safe, want a little higher return, and are investing more long term, I'd look into Treasuries.

If you have $20 to $30k though, I'd honestly just look for a portfolio manager and open up a mutual fund. I think the stock market is due for a correction and possibly large correction in the next couple years, so I'd even consider putting your money into one of the above mentioned safe havens with low returns and wait for the market to plummet, then open up a fund to buy everything on the low and get a better ROI. Not sure I'd advocate dumping your cash into a bull market that may be overheated.

 

[Higher Tech]

How soon are you looking to use the money?

Or I guess I should ask, how soon would you like it to be accessible?

 

[acri1]

You're right in that what you're returning in your savings account won't even keep up with inflation, so your cash is wasting away. A CD is relatively worthless too. My Capital One 360 Savings account yields more than a CD until you're talking about a 5 year CD and even then, it's not much more. So I guess if you want something safe and slightly more than your savings, you could go with a long term CD.

If you want to be completely safe, want a little higher return, and are investing more long term, I'd look into Treasuries.

If you have $20 to $30k though, I'd honestly just look for a portfolio manager and open up a mutual fund. I think the stock market is due for a correction and possibly large correction in the next couple years, so I'd even consider putting your money into one of the above mentioned safe havens with low returns and wait for the market to plummet, then open up a fund to buy everything on the low and get a better ROI. Not sure I'd advocate dumping your cash into a bull market that may be overheated.

Thanks for the input breh.

Maybe I should look into a decent mutual fund. How does one go about finding a portfolio manager? Should I just go ask somebody at my credit union? How much do they usually charge for their services?

How soon are you looking to use the money?

Or I guess I should ask, how soon would you like it to be accessible?

Eh, I dunno. No immediate need to go into my savings, though I would want to have the option to get to it in case there was an emergency. But I may want to put a down payment on a house or something in the next couple years. Definitely don't need to go into my savings every month or anything.

 

[Camile.Bidan]

Maybe I should look into a decent mutual fund. How does one go about finding a portfolio manager? Should I just go ask somebody at my credit union? How much do they usually charge for their services?

wow.....


A lot of bullshyt-ass advice in this thread. First go read a random-walk down wallstreet.

Then, Try to think of things from a common-sense perspective. Portfolio managers don't know anything more than you do. Ask a porfolio manager what his 5 to 10 year return is, and I bet you will never encounter someone with a return higher than 10%, and if you do, run away because there is something fishy going on. Rarely, can anyone consistently beat the market.

So, why should you pay someone just to get an average market return, when you can get market returns yourself by purchasing Unmanaged index funds. The portfolio managers will get a Market return and then take a cut of that return as management fee, and then they send you the tax bill for all their gains and losses at the end of the year. Read that last line very carefully.

If you want to purchase Mutual Funds, know the difference between "Load" and "No Load" funds. Load funds will immediately take commission the moment you purchase the fund.

since you have a stem background you should have a handle on probability and averages. Be fukkING objective. I can't believe how many people refuse to simply look at the data before making a decision. How hard is that?

Sure a lot of people a lot of people are expecting a correction, but look what happened last time we had correct. In fact look at every time that we had correction.

the Stock market has a consistent geometric average. When the correction comes, buy as much as you can.

 

[Suicide King]

VA had posted this on SOHH.
It is good, detailed, and covers all the basics.

comprehensive guide to funds.txt
http://www.sendspace.com/file/jpz3iv

comprehensive guide to stocks.txt
http://www.sendspace.com/file/hwngf8

 

[无名的]

wow.....


A lot of bullshyt-ass advice in this thread. First go read a random-walk down wallstreet.

Then, Try to think of things from a common-sense perspective. Portfolio managers don't know anything more than you do. Ask a porfolio manager what his 5 to 10 year return is, and I bet you will never encounter someone with a return higher than 10%, and if you do, run away because there is something fishy going on. Rarely, can anyone consistently beat the market.

I'm not sure why you're so angry. Did a portfolio manager fukk your wife?



Your generalizations have some validity, but of course, like anything in life, there are exceptions to the rule and there are portfolio managers out there who are worth the money, so it's incumbent upon the person to find the right manager by asking the right questions.

My parents are multimillionaires because of a good portfolio manager. They wouldn't be if they just blindly threw their money into an index fund.

 

[Scientific Playa]

Vanguard is highly rated and cost effective, they offer online study guides and investment counselors




Vanguard: Mutual funds, IRAs, ETFs, 401(k) plans, and more
www.vanguard.com/‎
The Vanguard Group
Vanguard is the world's largest mutual fund company, with about $2.4 trillion invested in the U.S. in more than 170 index, active, and exchange-traded funds

Vanguard - Vanguard 500 Index Fund Investor Shares
https://personal.vanguard.com/.../funds/snapshot?F...‎
The Vanguard Group
This mutual fund profile of the 500 Index Fund Inv provides details such as the fund objective, average annual total returns, after-tax returns, initial minimum

 

[tmonster]

But my question is essentially...what's a low-risk way to get a decent return on some money you have saved up? Say, in the 20-30k range.

That's easy, Insider trading

 

[Camile.Bidan]

I'm not sure why you're so angry. Did a portfolio manager fukk your wife?



Your generalizations have some validity, but of course, like anything in life, there are exceptions to the rule and there are portfolio managers out there who are worth the money, so it's incumbent upon the person to find the right manager by asking the right questions.

My parents are multimillionaires because of a good portfolio manager. They wouldn't be if they just blindly threw their money into an index fund.

Warren Buffet is good manager too, right? Less than 1% of portfolio managers can consistently beat the market.

http://www.huffingtonpost.com/2012/05/24/melungeon-dna-study-origin_n_1544489.html

Some research I’ve recently come upon clinches it: Fewer than 1% of mutual fund managers persistently beat the market based on superior market-timing or stock-picking skills. That’s down dramatically since the mid-1990s, suggesting either a decline in managers’ skills or a great leveling of performance because of technology, high-frequency trading, what have you.

That’s the conclusion of a 2010 study by professors Laurent Barras, O. Scaillet, and Russ Wermers recently featured in a thoughtful, extended piece on this subject by Julie Segal in Institutional Investor , which I recommend highly.

Click to Play
A timeline of great horror films: one per decade
Halloween is here, so here is a timeline of some of the greatest horror movies. We could not include them all, but we have one per decade since the advent of cinema.

And it’s in line with research by Brad Barber of UC Davis and Terrance Odean of UC Berkeley who found that only about 1% of active traders outperformed the market. The more frequently people trade, the worse they do, Barber and Odean concluded.

Someone with stem background like the OP already knows that those 1% of all managers didn't necessarily attain higher-than-market returns multiple years on end because of their own volition. In the same light, if there are more than a 100 trillion stars in the universe , it's statistically impossible that there isn't another Earth, and another You out there. This is really all common sense. It's statistically impossible that 1% of the 7 billion human beings in the world won't beat the market year after year. There really doesn't need to be any explanation other than chance and probability.

I don't have anything against portfolio managers. I have something against snake-oil salesmen, psychics, fortune tellers, and others out who sell lies to people who are ignorant. Unfortunately many Portfolio managers are fukking scumbags who sell people a bill of goods for things they don't fukking need.

 

[88m3]

stocks or mutual funds are pretty much your only option


'

 

[DANKTHRONE]

@ mutual funds. Might as well throw darts at the fukking board

 

[alybaba]

Do you have a 6 month emergency fund other than this?

 

[Responsible Allen Iverson]

@ mutual funds. Might as well throw darts at the fukking board

How are mutual funds throwing darts at a board?

 

[Domingo Halliburton]

if you're young buy index funds