# Want to learn how to invest



## reklamos (25 May 2016)

Hi everyone,
I'm new here but been reading this forum for some time.
I'm looking to start investing and I've never done this before.
I have good amount of saving accounts in various banks but at this time the rates are not great.
I have 10K that I want to invest as a starting point. The 10K is purely for investment and for me to learn how investment works. I'm not concerned even if I lose it all. I just want to see if investment is for me or should I pay someone to do this for me. 
There are tons of info everywhere but I'm looking for advice/recommendation on good beginners articles/books or if someone went through this recently.

Thanks


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## LS400 (25 May 2016)

You need to do a workshop introductory course with the likes of IIFT or equivalent.
A one day seminar will set you back about €300, and if you like what you hear,  can then go on to do an 8 week course on investing in the markets.
It would be wise to set up a dummy account first to get a feel of the markets before risking €10k.


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## dub_nerd (26 May 2016)

Seems to me you will be down about 10% before you even begin if you spend all that money on training. How about browsing a few relevant threads on this forum, look up some terms and definitions on Google and Investopedia, then give it a shot on your own. It's not rocket science (but it'll be as _expensive_ as rocket science if you spend all your money on seminars).


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## Jim2007 (26 May 2016)

LS400 said:


> You need to do a workshop introductory course with the likes of IIFT or equivalent.
> A one day seminar will set you back about €300, and if you like what you hear,  can then go on to do an 8 week course on investing in the markets.
> It would be wise to set up a dummy account first to get a feel of the markets before risking €10k.



Poor advice!  The OP wants to learn about investing not trading or speculating!  OP have a look at some of these courses: https://www.futurelearn.com/search?utf8=✓&q=Investments.

Some books on my bookshelf that should be worth a read:

- The Intelligent Investor
- Common Stocks and Uncommon Profits
- Stocks For The Long Run
- Common Sense On Mutual Funds
- The Essays Of Warren Buffett: Lessons For Corporate America
- The Black Swan
- Why Smart People Make Big Money Mistakes and How to Correct Them
- Manias, Panics, and Crashes
- Where Are the Customers’ Yachts? 
- A Random Walk Down Wall Street
- One Up on Wall Street
- Beating the Street
- Reminiscences of a Stock Operator
- Strategic Bond Investor
- Poor Charlie's Almanack
- The Misbehavior of Markets: A Fractal View of Financial Turbulence
- The Art of Asset Allocation: Principles and Investment Strategies for Any Market
- The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
- The Little Book of Value Investing
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns


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## LS400 (26 May 2016)

dub_nerd said:


> Seems to me you will be down about 10% before you even begin if you spend all that money on training. How about browsing a few relevant threads on this forum, look up some terms and definitions on Google and Investopedia, then give it a shot on your own. It's not rocket science (but it'll be as _expensive_ as rocket science if you spend all your money on seminars).



You will be down a lot more than 10% if you dont educate yourself with them pesky seminars


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## LS400 (26 May 2016)

Jim2007 said:


> Poor advice! The OP wants to learn about investing not trading or speculating! OP have a look at some of these courses: https://www.futurelearn.com/search?utf8=✓&q=Investments.



There is a fine line with investing and trading the markets, the advice is not poor, it just may not fit with his future plans.


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## Fella (26 May 2016)

LS400 said:


> You will be down a lot more than 10% if you dont educate yourself with them pesky seminars



Why will he be down ? If you just open a cheap broker and buy shares in anything how likely are you to do worse than someone who has studied for years and attended seminars? 
If he doesn't diversify he's going to have higher variance in his results but as equally likely to be up 10% as down 10%. You don't need to work out the value of each company on the stock market , the weight of money has done all this for you , you lose on commission and spread that's it . Similarly I don't need to work out what % chance Real Madrid are to win on Saturday Betfair has done it for me , between buying and selling its as close to fair value when your buy anything assuming it's liquid enough. There are always people who think they can't beat the markets but I would say they are few and far between.


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## Sarenco (26 May 2016)

LS400 said:


> There is a fine line with investing and trading the markets.



No there isn't.  There is a world of difference between investing and trading.


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## LS400 (27 May 2016)

So I have 10k to invest. I can buy Boi shares etc, (which is a bet in anyone's language) and hope the shares go up in value. Why else would you invest!! and as the op has said, he is not too concerned if he looses it all, which in my thinking, leads me to believe there's a little bit of a risk taker in his thinking. So, with that in mind, with the same 10k, he can invest a portion of that betting on the whether the share price of Ryanair etc will rise or fall. 

In my opinion, there's not a world of a difference. It's just that one has a quicker result than the other.


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## Rory Gillen (28 Jun 2016)

reklamos said:


> Hi everyone,
> I'm new here but been reading this forum for some time.
> I'm looking to start investing and I've never done this before.
> I have good amount of saving accounts in various banks but at this time the rates are not great.
> ...


No doubt Brendan will delete my post, but taking the time to learn about investing is a sensible step. We are one of two companies in Ireland that offer such training.

www.gillenmarkets.com


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## Brendan Burgess (28 Jun 2016)

I might disagree with you Rory, but that would not be a reason for deleting it. 

We don't allow advertising, but as a long term useful poster, answering a specific question, we occasionally make exceptions.

Had I noticed this thread, I might well have made a reference to your site. 

Brendan


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## PMU (28 Jun 2016)

Jim2007 said:


> Some books on my bookshelf that should be worth a read:


   All of these are good but for a beginner I strongly suggest you read Rory Gillen's "3 Steps to Investment Success".  [Note I've no connection with Mr Gillen and do not subscribe to his website, but I think this book is about the best you can get as an introduction to investment.]


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## Dan Murray (28 Jun 2016)

PMU said:


> All of these are good but for a beginner I strongly suggest you read Rory Gillen's "3 Steps to Investment Success".  [Note I've no connection with Mr Gillen and do not subscribe to his website, but I think this book is about the best you can get as an introduction to investment.]



This book was debated previously on this forum and very much divided the jury. I found it extremely poor.

How you could rate it ahead of some of those classics mentioned by Jim genuinely puzzles me.


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## Leper (28 Jun 2016)

In my last job (circa 20 years ago) I was a member of an Investment Club.  All you had to do is give £100.00 per week to our "Fund."  Our "founding" member had an account with a well know stock-broker. He and two others were the people who decided where the money would be invested (or gambled).  You could opt in or opt out in any week, but most of us stayed in for several years.

There could be 20 members at any one time, so therefore £2000.00 was available for use every week.  The money was invested through the stock-broker every Monday or Tuesday and cashed in on Thursday.  There were no "paper" transactions.  The main guy running the club was astute and most weeks he hit a profit which was divvied out on the Friday - sometimes we lost.  Depending on the occasion some of the investment money was gambled on GAA football matches in the local betting shop. Strangely, our profit margins here were often greater than the investment through the stock broker.

I am glad to say that overall, I made a few bob through the club.  However, I did learn that the stock market was not a place where my little knowledge would reap a profit on my own investments. Investing for a living is not the place for the small-time wannabe investor however knowledgeable.


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## Rory Gillen (29 Jun 2016)

Brendan Burgess said:


> I might disagree with you Rory, but that would not be a reason for deleting it.
> 
> We don't allow advertising, but as a long term useful poster, answering a specific question, we occasionally make exceptions.
> 
> ...



I'm flabbergasted Brendan.....training in all areas of life is surely the first step to self improvement. And I provide equal coverage of your beloved ETFs; I've been a fan from the start.

Now, I might even have to invite you to our next 1-day seminar (October) - on a complementary basis of course - to change that stone-age view of yours...would you be up for that?

*Rory*


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## PMU (29 Jun 2016)

Dan Murray said:


> This book was debated previously on this forum and very much divided the jury. I found it extremely poor.  How you could rate it ahead of some of those classics mentioned by Jim genuinely puzzles me.


I can rate it more appropriate than most of the books previously mentioned as it is aimed at those beginning in investment. The OP asked for  advice/recommendations on good beginners articles/books.

IMHO the best books on investment for beginners (and for everyone) are (1) 'Unconventional Success: A Fundamental Approach to Personal Investment' by David F Swensen; and (2) 'A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing' by Burton Malkiel. Everyone should start with these. Mr Gillen's book has a similar approach to Mr Swensen's but has the advantage that it is not written from an American perspective. That's why I recommended it.

I find that those starting investing frequently ask questions like 'What are the 'hot' stocks/funds that will make me money?'. Now I've no idea what these are, but investment theory tell us, and I can confirm from person experience, that proven strategies based on asset allocation, risk assessment and duration, do work; will protect your capital; and will give you decent returns.  The above books deal with this approach to investment.

The books mentioned by Jim2007 in post #4 are excellent but books that provide a good broad introduction to investment theory, particularly from an asset allocation perspective, should be the first port of call for beginners.


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## Brendan Burgess (30 Jun 2016)

Rory Gillen said:


> I'm flabbergasted Brendan.....training in all areas of life is surely the first step to self improvement.



Hi Rory 

I don't think that either you or anyone else can pick winners.  So I don't believe in the equity analysis which you do and which I understand you train people in.  There are a few exceptional people who break the rule e.g. Warren Buffett. 

I am not a fan of ETFs by the way. 

I have a strong preference for picking a directly held portfolio of 10 blue chip shares.  I pick these at diversified random. 



Brendan


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## Fella (30 Jun 2016)

I don't believe in picking winners either , I think the main things you need to know are diversification, tax and ongoing fees . That's what I look at , I could be wrong , I have read Rory's newsletter just now I just had a look at the first Trust they recommend HG Capital, according to AIC website the ongoing charges are 2.25% per annum that wouldn't fit into my portfolio as the charges are too high. It's complicated figuring out exact charges from HG Capital website but it seems charges are based on NAV price not share price and its trading at a large discount so your paying higher than the stated 1.5% charge. So AIC is probably accurate at around 2.25%. 

When I am looking at investment trusts I filter from lowest to highest charges and avoid anything over around 1%.


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## Dan Murray (30 Jun 2016)

Fella said:


> I don't believe in picking winners either....



Ah, come on, Fella

Have you not read de book? It's all there.

_Buy a pack of dogs. Put aside for a year. Examine de pack. Any dogs which are still dogs must be kept. Remove anything doing well. Replace those removed with new dogs. Rinse. Repeat._

A bit crude but nonetheless my recollection of the recipe as to how to beat de Footsie!


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## Fella (30 Jun 2016)

Dan Murray said:


> Ah, come on, Fella
> 
> Have you not read de book? It's all there.
> 
> ...




The other problem is proving your good at picking winners. I've gone through periods of  finishing down over 200 bets at averaging over 5% edge per bet. Just like gambling even bad investments can out do good investments over a short period of time , a short period of time in investing is probably 5 years. I don't think I could ever prove beyond doubt that Rory or anyone else is better than I am at picking stocks. That's the reason I wouldn't pay for advice. I would possibly pay for tax advice though.

And no i've never read any books on investing.


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## Boyd (30 Jun 2016)

Brendan Burgess said:


> I have a strong preference for picking a directly held portfolio of 10 blue chip shares.  I pick these at diversified random.
> Brendan



In the grander scheme of things, is this the same as trying to pick "winners" (i.e. not "losers")? I mean there are hundreds of thousands of blue chip share companies, aren't you basically trying to pick ten that aren't "losers" here? Why do you think that's easier then picking 10 "winners"? I don't quite understand the difference between your strategy and trying to pick winners.


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## Sarenco (30 Jun 2016)

I am curious what people consider to be a "blue chip" stock.

My understanding is that the phrase comes from the world of poker and refers to the biggest betting tokens available.  In other words, it simply refers to mega cap stocks like Apple, Exxon etc.

However, I wonder do people consider the phrase to imply some attribute other than market cap?

In either case, I don't really understand how the stock pick is random - either stocks are chosen on the basis of their market cap or on the basis of some other  criteria.

For what it's worth, I think stock picking is nuts for the vast, vast majority of private investors.  Choosing to hold a portfolio of only 10 stocks from the thousands of stocks that are publicly traded across the globe is stock picking whatever way you look at it.


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## Gordon Gekko (30 Jun 2016)

There aren't really hundreds of thousands of such companies...there's probably only a couple of hundred.

Academic research suggests that you should have at least 30 companies.

Having said that, you wouldn't be on the worst track in the world if you picked 10 globally diversified companies, avoiding those with a higher probability of blowing up. The problem is which ones!

e.g. Diageo, Colgate, Nestle, Coca-Cola etc.

My own approach is to use funds and ETFs.


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## Rory Gillen (2 Jul 2016)

Brendan Burgess said:


> Hi Rory
> 
> I don't think that either you or anyone else can pick winners.  So I don't believe in the equity analysis which you do and which I understand you train people in.  There are a few exceptional people who break the rule e.g. Warren Buffett.
> 
> ...



Let the debate continue Brendan because I believe you are fundamentally misunderstanding the issue. No one, especially myself, is suggesting we are likely to pick the winners above others. Rather, it's my core belief that most private investors find it difficult to achieve the returns that stock markets offer over time due to improper understanding of risks, a lack of understanding of value, excessive trading, and insufficient attention to costs.

If, as a do-it-yourself investor, you can get the above right you are well on your way to getting the returns available. As stock markets have provided returns of circa 4-5% above bank deposits over the long-term, then choosing to invest in stock markets with your savings is done in pursuit of those superior returns.

You mention that you buy companies yourself and diversify. Good. But what about those who don't know how to assess a stock or fund. On your line of reasoning, everyone is born understanding how to invest.

This is as true as saying that to drive a car all we need to do is open the door, get in and start the engine. Poppycock. You must learn how to drive, you must understand the risks and so doing you can mitigate the risks and obtain the benefits of driving.

So, too, it is with investing. One should surely take the time to understand what it's about, what the risks are, how to mitigate the risks and obtain the returns on offer. No doubt the next line of objection here will be that you can learn it all in a book. Maybe some can. But perhaps some are better off getting some quality training!

I don't think I've come across a website that is so overwhelmingly negative on anything that suggests how to improve. I'm hoping there's some other sane voices on this forum than the ones I've read so far!


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## Dan Murray (2 Jul 2016)

Rory Gillen said:


> I believe....fundamentally......that.........No one, especially myself, is suggesting we are likely to pick the winners above others. Rather, it's my core belief that most private investors find it difficult to achieve the returns that stock markets offer over time due to improper understanding of risks, a lack of understanding of value, excessive trading, and insufficient attention to costs.



If this is true - why not advise investors to put their money into low cost indexed funds and "stay the course" (i.e. not try time the market, etc.)?


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## Rory Gillen (4 Jul 2016)

Dan Murray said:


> If this is true - why not advise investors to put their money into low cost indexed funds and "stay the course" (i.e. not try time the market, etc.)?



Dan, that's because many do not know how the markets operate, why they've delivered better returns than bank deposits over the decades etc. You're assuming everyone starts off with the basic knowledge already in place. In addition, there are assets other than equities that can produce positive returns but without the same level of sensitivity to the general economy.


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