Pains & Struggles of Investing

K

kylewright

New Member
Hey Everyone!

Thought It might be interesting to hear stories of how you got started investing for yourself and maybe share what problems you've encountered or struggles your currently dealing with when it comes to investing your own money.
 

I got into investing in my 20's. I got started because my Dad, who had no understanding of markets at all, got a really good tip (from a business teacher) on a stock that did well over the years. I figured there was opportunity.

Being a nerd, I started going to the library with a notebook reading Kiplinger and Money magazines. I sent away for publications in the mail (long before pc's ---- this is in the 70's), and actually went to a couple of investment firms (Fidelity and Scwab) who had offices in Chicago and free literature on investing. Also went to several free seminars on investing. It took me a couple of years to understand the principles and the differences among the funds: large cap, small cap, stocks vs bonds, income funds, etc. I learned how different funds and stocks perform in up and down markets, risk versus rewards, and in general, understood terms that I encountered in financial articles. It was a slow process. It took several years before I could actually read a Wall Street Journal or Forbes with real understanding.

Anyway, built on that over the years. I did all my own investing, took some chances that paid off, missed some great opportunities. I got into regular trading and to do that, went to the library every week to read Value Line reports.

To sum up, I treated investing as a part-time job and spent thousands of hours over the decades at it. I saw my Dad having to moonlight at several jobs (he was a low-paid teacher) to give us a 'middle class' standard of living. I figured I could do that via investing. It worked. Wife and I retired at 56 and 54 with no health or pension benefits.

The key, to me (and everyone has their own take), was understanding what I was doing. I understood the risks, I understood what financial people were discussing or what I was reading in investment articles.
 
I started investing when IRA's first became available. My wife started investing when her company (AT&T) offered a stock purchase program for junior employees. We also participated in our companies 401K programs or Federal Thrift Savings. Over the years, those investments have paid off handsomely. And we bought Savings Bonds, lots of them. (Banks hate you when you show up with big stacks of US Savings Bonds to get enough cash for a down payment on a house.)

That said, we made a couple of mistakes, and had a couple of notable saves.

When AT&T first split up, all the employees who participated in the stock option plan were given stock in all of the spinoffs. We sold all of these little bits and pieces except Southwestern Bell (now AT&T again) and Lucent. At its peak, we had over $6000 in Lucent Stock. Little did we know that those executives were all busy selling their stock while bragging about how well Lucent. In the end, my wife's Lucent stock was worth about $150. Somebody should have gone to jail for that dishonestly.

We dumped Janus Funds when their runup in value became unbelievable (like 50% in one year for Janus 20). We got out of it before their stock prices collapsed.

We dumped two funds because their online login security was seriously lacking, and two other funds who engaged in a degree of insider trading with favored big customers.

I took Money Mag for over 30 years and learned a lot. They eventually became seriously redundant. I used Morningstar services for a couple of decades and had good success with them.

And most importantly, we ALWAYS stayed away from anyone who wanted to manage our investments for us!
 

I started investing in my early 20's. I worked for Northwestern Bell at the time. They had a fabulous benefits package that included a matching 401k with company stock, medical, a pension program and they also contributed to Social Security. I worked with older workers who were always talking about the matching 401k program. I realized i was leaving money on the table if I didn't participate, so I enrolled. After about 11 years there I quit my job to stay home with my young daughter. By that time (the late 80's, early 90's) the Bell System had broken up and I sold off my company stock and changed to an IRA with mutual funds. I'm forever glad I did because the stock ended up tanking and I would have lost most of my money.

Fast forward to 2000. I was hired by the company I am now working for. As soon as I could, I enrolled in the 401k program and have been contributing ever since. This company also has a pension as well as the 401k. I invest in mutual funds, heavily on the stock side.

An interesting note: When I was 55 and 1/2, Qwest ( formerly Northwestern Bell) contacted me to ask if I wanted to keep my small pension or take a lump sum. Normally I would advise anyone to keep their pension but in this case I did not know if the company would still be around when I was retirement eligible so I took a lump sum. I was shocked at how small the lump sum was. I think I was royally ripped off, but did it anyway because at least I was receiving something in the way of retirement money. Well, I invested that along with some other money I had left over from my Northwestern Bell days and put it into index funds at Ameritrade where it sits slowly growing.

Mutual funds have been my investment of choice. For a time in the late 90's I worked for Ameritrade and did my first online trade by myself. I quickly learned I am not a very good day trader or stock picker. Even though I did end up losing money, it wasn't that much, and i learned that mutual funds were much better for me. Maybe I could have been a better investor, but I'm happy with what I have.
 
The pensions from the AT&T system are pitiful. My wife took the pension rather than the lump sum, which was't much either. The dividends she gets from her stock are more than the pension. The fees that AT&T charges if you want to pass some portion on to your spouse are very high. For us, it simply was not worth it. Their pension does not adjust for inflation which is another disappointment. Their stock does spin off an agreeable dividend but we worry about how viable the company is over the long haul.
Not dumping Lucent (bell labs) still irks me.
 
I saved and invested through payroll savings plans at work including 401K when it became available.

The accumulation phase was all pretty boring and uneventful, sort of like watching it snow.

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The hardest time for me was riding out the market crash of 2008. At that time I had already stopped working and was living on my savings without the benefit of Social Security or a pension. I knew that I had made good decisions but it was difficult to tune out the chatter and dire predictions of the media.
 
Aunt Bea said:
I saved and invested through payroll savings plans at work including 401K when it became available.
The hardest time for me was riding out the market crash of 2008. At that time I had already stopped working and was living on my savings without the benefit of Social Security or a pension. I knew that I had made good decisions but it was difficult to tune out the chatter and dire predictions of the media.
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Yes. Understand. We had retired as you, no pension/SS or health care (we had that through private insurance). I had an 'unfair advantage' though. Wife decided she was too young to retire after a couple of years of travel and went back to work. That gave us some income and health care benes. I spent months trying to figure out next investment move, or not. Finally 'bet the farm' on junk bond funds. To most people, dumb idea. But I saw that those funds were priced with an assumption of a 50% default rate, and the funds had dropped to half their previous value. I read that in the Great Depression, the highest default rate of corporate bonds was 16%. So, decided, as I had for decades, that the investment gurus didn't know crappola. Total return on my investments more than doubled in about 16 months . Those funds came back long before stocks, and paid dividends. That secured my retirement.
And yes, I could have been wrong..............
 
Pecos said:
The pensions from the AT&T system are pitiful. My wife took the pension rather than the lump sum, which was't much either. The dividends she gets from her stock are more than the pension. The fees that AT&T charges if you want to pass some portion on to your spouse are very high. For us, it simply was not worth it. Their pension does not adjust for inflation which is another disappointment. Their stock does spin off an agreeable dividend but we worry about how viable the company is over the long haul.
Not dumping Lucent (bell labs) still irks me.
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Very valid concern. One I wasn't willing to take. I hope it works out for you.
 
Our investments have been heavily weighted with business and real estate or real estate and business...some stocks in there though. 2008 - 2010 were good years to make money in the market. Sold a couple good pieces of real estate and we were also"good to go" for retirement. Sold the business a couple years ago...now we're just coasting, except hubby plays tournament poker, its hard work, but does very well! Would like to have some good tips or direction right now to monitize some bucks, any suggestions?
 
I started investing in real estate at 28. Previously, I had mutual funds, from about the age of 20. I also started buying single stocks, selling long and short. Later, I did day trading. I always read up on everything I did with my money. No problems, except a small loss when I took a "hot stock tip" from an old buddy who didn't know what he was talking about.
 
My parents were good savers but poor investors - you might think the saving part is more important, and it probably is, but you can lose a lot of dough by buying high and selling low! From them, I learned what to do and what not to do. I also took a nature interest towards investing and reading about stocks - it was a little bit like collecting, just like baseball cards, I liked knowing about the good companies I owned at the good prices I bought them at. And like Warren Buffet, I intended to hold each and every security FOREVER! But then the dot com era came and I got spooked. I bought companies like Yahoo! and Broadcom, which I optimistically thought would double in 5-7 years. They doubled in literally 60-90 days. That’s when I got spooked, sold my individual tech stocks and started buying bricks and mortar companies along with index funds. I still lost a fair amount after the dot com bubble burst (on paper), but much less than I might have.

By the time 2008/2009 came around I was pretty convinced that I was not as smart as I thought I was so I continued investing into the stock market as it cratered. That was really scary and my portfolio took a beating, but bounced back nicely in hindsight.

To be honest, I am nervous about everything in the stock and bond market all over again. Again, I am not as smart as I think I am, but I feel like there is a lot of financial engineering going on right now and some nameless politicians and maestros at central banks are walking on a tight rope trying to keep the global economy going. Or to use another analogy, its like watching controled burns to prevent forest fires, but they don’t burn as much of the fuel - so just when everyone gets complacent, the random spark in CA ignites a massive, terrible forest fire.
 
CallmeIshmael said:
My parents were good savers but poor investors - you might think the saving part is more important, and it probably is, but you can lose a lot of dough by buying high and selling low! From them, I learned what to do and what not to do. I also took a nature interest towards investing and reading about stocks - it was a little bit like collecting, just like baseball cards, I liked knowing about the good companies I owned at the good prices I bought them at. And like Warren Buffet, I intended to hold each and every security FOREVER! But then the dot com era came and I got spooked. I bought companies like Yahoo! and Broadcom, which I optimistically thought would double in 5-7 years. They doubled in literally 60-90 days. That’s when I got spooked, sold my individual tech stocks and started buying bricks and mortar companies along with index funds. I still lost a fair amount after the dot com bubble burst (on paper), but much less than I might have.

By the time 2008/2009 came around I was pretty convinced that I was not as smart as I thought I was so I continued investing into the stock market as it cratered. That was really scary and my portfolio took a beating, but bounced back nicely in hindsight.

To be honest, I am nervous about everything in the stock and bond market all over again. Again, I am not as smart as I think I am, but I feel like there is a lot of financial engineering going on right now and some nameless politicians and maestros at central banks are walking on a tight rope trying to keep the global economy going. Or to use another analogy, its like watching controled burns to prevent forest fires, but they don’t burn as much of the fuel - so just when everyone gets complacent, the random spark in CA ignites a massive, terrible forest fire.
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Yes, its very natural to be leery of the market. I've jumped in when things were down and made good money, but think most people really have issues on those years when their mutual funds or whatever make nothing or they begin to lose money. Its hard to sit tight then. Think its harder now as you get older. You always feel you don't have the time to wait it out. We'd all like to have those mutual funds/stocks that always make money year after year, wouldn't we now?
 
mathjak107 said:
Most of those who are gun shy would do better getting a 3rd party to manage their money keeping themselves away and out of the loop ...
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But with that said..you better know who that 3rd party is. Have some friends that have lost money, guy! Sticky fingers and "hey, I don't care, still getting my percentage" attitudes.
 
Liberty said:
Who was it said "nothing is simple these days"...lol. As long as you have a strategy and have assessed your risk tolerance.
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the problem is what feels good vs what makes financial sense is usually in contrast to each other ...this is why active mgmt can actually add 2-3% to peoples portfolio's who tend to be to gun shy.

the morningstar small investor returns sho most small investors fail to see the returns the funds they were in got as they try to out think the fund or exhibit poor investor behavior
 
mathjak107 said:
the problem is what feels good vs what makes financial sense is usually in contrast to each other ...this is why active mgmt can actually add 2-3% to peoples portfolio's who tend to be to gun shy.

the morningstar small investor returns sho most small investors fail to see the returns the funds they were in got as they try to out think the fund or exhibit poor investor behavior
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I don't get that...why wouldn't they "fail to see the returns"? Wouldn't that be clearly shown to them regularly in the form of "interest like" monies?
 
Liberty said:
I don't get that...why wouldn't they "fail to see the returns"? Wouldn't that be clearly shown to them regularly in the form of "interest like" monies?
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most small investors end up bailing in drops or they think they are going to outsmart things by timing when to be in and out ..the end result is morningstar tracks the outflows and inflows and has a investor return as well on funds and it lags the funds themselves as the majority of the money fails to beat just staying put
 
mathjak107 said:
most small investors end up bailing in drops or they think they are going to outsmart things by timing when to be in and out ..the end result is morningstar tracks the outflows and inflows and has a investor return as well on funds and it lags the funds themselves as the majority of the money fails to beat just staying put
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So you are saying they are trying to get in or out to make more money, when the funds might say, for instance May 31- to May 30 year to year to determine fund status earnings or losses?
 


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