18 year old needs help with life in general

Illusionz
Illusionz

Dad lets me invest all my money as kid into stocks for college

Parents get divorced, dad won't give me account fearing my mom will use money

Finally get account for my 18th birthday

See pic related

What do I do? Should I reinvest? Bitcoins? Alt-coins? Silver? Or should I just use the money for college? Even though I got amazing financial aid and have relatives who will help me pay off any loans I do take?

All urls found in this thread:

thismatter.com/money/investments/capital-allocation.htm

Lord_Tryzalot
Lord_Tryzalot

only two holdings
not understanding that you should be trading options

Your dad fucked up. He shoulda never let you make those mistakes you'll learn nothing from

haveahappyday
haveahappyday

My dad has fucked up in a lot of ways. Regardless, how can I make the most of this bittersweet recovery?

5mileys
5mileys

should i reinvest?
With what money nigga, you probably need to post capital to maintain initial margins set on that account with that sorry ass return.

bitcoins
It's like you enjoy losing money...

hairygrape
hairygrape

You literally would have been better off just going to a roulette table and betting it all on black. Jesus.

Poker_Star
Poker_Star

But on a serious note, liquidate those positions and just eat the loss. Consider it "early-season tax relief" and be happy that it isn't larger. Then invest in a portfolio consisting of long positions on an index-tracking mutual fund for whatever major index you enjoy watching/hearing about. That will give you decent risk/return with limited downside exposure. Next, add some risk-free securities into your new portfolio. Try an ETF that buys up US gov't treasuries (safest and most liquid asset for US citizens). Then go through the work of calculating your capital allocation into each of those two investments.

thismatter.com/money/investments/capital-allocation.htm

Quick tip: Use $SPY and $SHY for starters if you're lazy and want minimal returns, although be warned that a higher expected return can be achieved for a portfolio of the same risk unless your capital allocation lies upon the efficient frontier of the investment curve.

Methnerd
Methnerd

bittersweet recovery
500 fucking dollars

Jesus Christ.

Snarelure
Snarelure

You're lucky its only that much.

If your dad isn't rich, you shouldn't let him touch your money or anything close to it.

Probably the least expensive lesson you'll ever learn with family.

VisualMaster
VisualMaster

I have no knowledge related to trade in general so I'm going to ask some clarifying questions. I've chosen to major in Business Admin. and Marketing so maybe I'll learn something that will be useful down the road.

What do you mean by "post capital" and what are initial margins?

I understood almost none of this. What I did get from your post was that I need to turn it all back into money, reinvest into (blank), and invest in (blanks) then keep putting some of the money I get from, work into those two.

Sorry for my ignorance, if you do not feel like explaining I can always look it up, but I would appreciate any help I could get :)

AwesomeTucker
AwesomeTucker

To be fair it was money I "earned" from sleeping in my own bed as a kid, babysitting brother, or doing chores. Nothing I really expected to get paid for so when 10 year old me saw the account with all this money in it I was more than happy to let him control it.

Dreamworx
Dreamworx

Look up index-funds and mutual funds. You're not very finance-inclined so you can't be expected to use complex trading strategies that involve hedging with options. You aren't going to beat the market but you couldn't possibly time it. Hell, time in the market is always better than TIMING the market. We're going to set up a nice "beginner" portfolio for you that requires minimal maintenance on your part.

I'll assume you're in the US. Either use vanguard or charles schwab (everybody else will take more money in fees from you lets leave it at that.) We'll use Schwab products as I'm personally a bit more familiar with them. A good Schwab S&P500 Index-tracking mutual fund is SWPPX. That's going to track the market and get you about 5% return (on average, so sometimes it'll be higher and sometimes it'll be lower but it should average out to about 5% if you leave it alone).
Next, we're going to add some treasury securities exposure. These assets are sold (and guaranteed) by the US government. This means they are really low risk. So low, in fact, that we can call them "risk-less" as the US gov't would have to default on debt before you lost money on these securities (highly unlikely). So we can add a fund that tracks these to the portfolio to increase the expected return (what percentage you expect to get a year) while maintaining the SAME level of risk (treasuries are RISK-LESS). A good Schwab fund that is comprised of US treasury investments is the SWUXX. Use whatever you want, just google it first and do some basic research.

Now you have to figure out how much to invest into the SWUXX fund (treasuries, risk-less) and how much to invest into the SWPPX fund (tracks the SP500, risky but low risk). There's some complex math here but it should tell you that more money should go into the SWUXX fund than the SWPPX fund. Do the math yourself, I just made your first "big-boy" portfolio.

Nude_Bikergirl
Nude_Bikergirl

1. Stop bad mouthing your father. He thought he was doing something good and would net an investment for your entitled millennial cunt.

2. 500 bucks isn't enough for anything, not that id expect your stupid ass to know better. Take the money out and use it to increase your marketable skills.

Garbage Can Lid
Garbage Can Lid

Dad spotted. Should've pulled out you fucking nob, quit shitting on kids that want to make something of themselves.

Booteefool
Booteefool

2 stocks
not an index fund
what were you thinking

Boy_vs_Girl
Boy_vs_Girl

Dad spotted

lol not quite

King_Martha
King_Martha

Check out index-fund returns compared to regular stock returns.

*I'm not saying this is a good portfolio by any means, it is simply a paper-trading portfolio used for speculating

SomethingNew
SomethingNew

Thanks for the help! I really appreciate it!

Hi OP on phone. Didn't realize I was bad mouthing him. My dad beat my mom and abused my autistic brother a lot. He's been pretty shitty thoroughout the divorce, scamming my mom out of money when she doesn't know any better and trying to manipulate us through bad mouthing her as well as promising to fix the transmission on my car but instead selling it for scrap. I love my dad and he has a lot of great attributes, he's smart, funny yet straightforward, hard working. I owe a lot to him for teaching me a lot of important things, but he has a bad side just like everyone else. His lack of respect for me makes it hard for me to respect him , even though we both love each other. I apologize for coming off as a spoiled brat, I had no intention of doing so.

likme
likme

After you put the money into your two funds just do yourself and only look at it a few times a year. Buy more shares when the market dips. Sell when you need money for something just make sure your capital proportions stay the same.

Enjoy passive income man!

Techpill
Techpill

Quick question, will the growth outweigh inflation?

Snarelure
Snarelure

Yes. Just take my word for it. If you don't trust my word then you can work out the math for yourself and see how inflation is accounted for within that portfolio. (keep in mind i'm not taking fees here, no incentive to mislead you)

Burnblaze
Burnblaze

Haha I trust you, just a question that popped into my mind.

Raving_Cute
Raving_Cute

Well if anyone has some more begginer tips or tops for college/life in general I would appreciate it. If this thread starts dying I'll just delete it :)

MPmaster
MPmaster

different user, know nothing about this, can you recommend me some good books on the concept of all this trading not one of those useless how to become millionaire types. Not going to start any time soon just interested

Bidwell
Bidwell

trips of truth has spoken

Skullbone
Skullbone

not understanding that you should be trading options

Are you serious? He just lost a shit-ton of money on bad bets, needs baby steps to get introduced to the stock market and you want him jumping isto options?

Why should he waste time and money with treasuries? Returns are minimal and he isn't managing a fund.

Nice portfolio. And definitely not speculative. Tons of solid choices there.

Lunatick
Lunatick

Read "Essentials of Investments" by Bodie, Kane, & Marcus. Also, sign up for a statistics course at your local college. It'll come in handy.

SomethingNew
SomethingNew

So we can add a fund that tracks [treasuries]...while maintaining the SAME level of risk.
A bond fund and the bonds themselves don't exactly carry equivalent. Owning the bonds themselves can be considered riskless because the securities will mature and return the principal of the bond to the bondholder; bond funds do not have this feature because they are ongoing--therefore, they cannot be considered riskless.

If interest rates were to spike up to 15%, for example, both the fund and the bonds themselves would experience massive losses initially. However, eventually the bonds themselves would eventually mature and return principal to the bondholder which is the exit point. Since bond funds are perpetual, it is impossible to have any figures like yield-to-worst or yield-to-maturity.

GoogleCat
GoogleCat

Suggesting a fixed income-fund is the best I could do for this kid who clearly doesn't know that much about financial markets man. Having a portfolio of corporate stock as well managing a bond portfolio is a lot to ask of an 18 year old with zero days of experience.

DeathDog
DeathDog

OP again, would it be smart to wait and see if the stocks go up a little bit before cashing out?

5mileys
5mileys

Sell FH it's a POS. Hold the other until like December then sell. Their revenues should peak around then so you can catch the top of the annual cycle at the right time. Take profits like December 15th at the latest. Don't be scared to realize the loss but also don't be too naive to realize gains and take profits when you're up.

SniperWish
SniperWish

How long did it take to see these returns?

VisualMaster
VisualMaster

Your best bet is to get some more capital and double down on both those stocks. Buy the dip. Buy low, sell high.

AwesomeTucker
AwesomeTucker

I suppose. Education is the best thing you can do at that point.

Personally, I don't believe most bonds are worth it anyway and would rather have my fix-income allocation of my portfolio be mixed between (quality) preferred stock, and loans through lending club/prosper or similar. Anything for short duration would get tossed in a high yield savings account for the sake of similar or higher yield, equivalent risk, but higher liquidity. The yields on most bonds these days just don't offer a reasonable return for the risk and duration.

Snarelure
Snarelure

You must be talking about treasury bonds? Yields are still preferable in the corporate-debt markets although it's somewhat to the recent liquidity of convertible corporate debt issuances (read liquidity, not convertibility). Junk bonds are yielding close to 10% in present market conditions so there's no slack-up there. The structured market is a different story, however.

I originally bought into those positions around last week. I am constantly readjusting positions on these investments though so don't take the capital allocation shown here to be de facto.

Also, keep in mind that this account

Evilember
Evilember

...that this account is a larger one than some may be working with in terms of capital. Here's where it sits at currently, after liquidating my position on $HPE, and taking some profits. Still hold the majority of the previously shown positions, however.

farquit
farquit

senpai at this rate you are barely beating inflation (about 2% a year). IMO your portfolio is too conservative. Its all slow growth/stagnant bluechip large companies and trusts. Don't be afraid to look into penny stocks or smaller companies. Search for bargains. Search for undervalued companies. Analyze their annual reports and statements. If you aren't making at least a 10% return/year you're doing it wrong.

cum2soon
cum2soon

"I'm betting it all on Pier 1, baby! Little Timmy is going to Hah-vahd!"

kizzmybutt
kizzmybutt

Ahha my mom shopped there when I was little and I'm actually from Maine

CodeBuns
CodeBuns

Post a snapshot of your portfolio so I can get a feel for how it's supposed to look "bargain shopping."

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