Question about those of you who invest your money

Selfmade · May 2010

Do you guys invest in tech stocks? This question is not aimed at starting some kind of wild debate or whatnot.

Warren Buffett considers his best investment advice to be "invest in what you know".

I was just wondering how many of you guys invest in the companies that make the technology you work with?

Pash · May 2010

Well everybody seems to think they can listen to sound advice from Mr Buffet and they will make a nice second salary from his wisdom.

Realistically, it's not the case for most of us. Also the market at the moment is so volatile that many of us would see any stock prices fade within one day of trading.

It's very easy to think that investing in Blue chip tech companies is a safe bet because we all work in IT. The short term return upon new product releases, growing market share, technology advancements is all very well but as we all know the market is agressive, spending can be cut in an earshot.

Some people do think now that we seem to be picking up in 2010 now is the time to invest in the big 5-

Top 5 Blue-Chip Tech Companies for Investors -- Seeking Alpha

Personally. I would never invest big in tech, simply because I am not sales, I am an engineer. I love technology, I love learning, but I know jackshit about selling something. New technology is great, but without the capacity to sell it or convince customers to buy it, its worthless.

I do however know that investing in financial institues now, while they are still reeling from the past couple of years may be worth it in the long run. Yes, many of them are now taxpayer controlled, but they are cheap shares right now. Barclays bank in the UK announced 11bn profits at the begining of the year while several large banking institues were handed goverment bailouts. Before they announced their profits the shares were reasonable and then they raised. They are still very strong, even after the Greeks got into a bit of a shambles.

www.iii.co.uk - For anyone in the UK looking to create a trading profile.

Investing is like raising before the flop sometimes, but if you have pocket aces......well it's worth the odds!

Pash

tpatt100 · May 2010

I stick with mutal funds and do dollar cost averaging since I invest the same amount every month. I automatically buy more when the market is down and the amount buys less when the market is up.

I tried trading online in individual stocks but I really had no clue what I was doing so I stopped.

Mishra · May 2010

If you are investing in stocks then you need to do the proper research and invest in undervalued small-cap companies. The key is finding the next fortune 500 company. This is why Buffett says you should invest in what you know because you will have an idea what the company is/should be doing.

All it takes is 1 super successful company to invest in to really come out ahead. This is, of course, buy and hold investing.

Other than that, investing in a undervalued dividend paying stock/fund, or bond is a great idea. The market can fluctuate all it wants but you are still getting paid. Bonds are also less risk.

That's definitely just my opinion though. Before simply investing in a tech stock, make sure you know what you are doing before you invest period. Don't blindly follow someone's advise. You should know what you are doing well enough to formulate your own opinion from others. If that's not your thing, then invest in easy things like municipal bonds.

cnfuzzd · May 2010

Be careful about investing too close to home. "tech" is a pretty big category, but imagine if you have a lot of your equity tied up in Tech stocks. Then something happens, and the Tech market crashes. Not only does your investment lose value, but you also are now working in an industry that is suffering from contraction.

John

shaqazoolu · May 2010

I have a company that does the majority of my investing for me. I have to say I am very pleased. Even in the midst of all of the economic turmoil, they not only made money for me, but quite a significant rate of return. It's almost exclusively mutual funds but I don't really care. Whatever makes me money is okay with me.

Buffet is right though. You really need to know the ins and outs of who you are investing in. I don't think it is meant like if you are an IT guy then you only invest in "tech" companies. I think it means more like, don't invest in something you aren't really, really familiar with. There is a guy on my team at work that has been managing his own portfolio for some time now that is trying to coach me into doing the same. The first thing he told me was nearly identical...know who you are investing in. Research the mess out of the company. Know what they do, who is doing it, what the CEO's background is, what the market is doing, capitalization, etc...rather than investing in EA because you like Madden or General Mills because you like Cheerios.

There are web sites that allow you to do free paper trades that will allow you to get used to it. The one I use is eztradingclub.com. My coworker's advice to me was to do that for at least a few months until you really get the hang of it. Real trades are serious business and they aren't cheap.

xenodamus · May 2010

I wouldn't buy single stocks at all unless it's just for kicks. Single stocks are not a great long term investing strategy from the advice I've read. You're better off putting your money in a good mutual fund with a long track record.....and leaving it there.

watson09 · May 2010

Its quite true that you should invest in stocks in the sector you know very accurately but at this point of time the IT sector don't seems to be good enough. The most important factor is European markets that are not good to consider these days.

The problem is with their economy which might go down or World might face another recession period..

eMeS · May 2010

I come from the financial services world and have been investing for many years.

I started out in mutual funds, then in the 90's moved into individual stocks. Made a ton of money buying and selling Sun in the late 90's. You have to do a lot of work to invest in individual stocks and it gets old pretty quick.

At some point around 10 years ago I switched the majority of my investing to exchange traded funds (ETFs), and primarily only two of those. My strategy is very simple. Most of my investment money stays in QQQQ QQQQ: Summary for PowerShares Exchange-Traded Fun- Yahoo! Finance and DIA DIA: Summary for SPDR Dow Jones Industrial Avera- Yahoo! Finance . Occasionally I'll get crazy and get into some other ETFs like energy, etc... This is long-term, so I use a series of covered calls to increase the rate of return. Briefly, a covered call is a type of option that sells someone else the right to buy the stock you own at a set price by a certain future date. To trade covered calls requires a margin account, and so to further increase my return I buy a significant amount on margin. Margin is great because the interest, which is low, is one of the only forms of interest that is tax-deductible.

MS

Question about those of you who invest your money

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