What is the goal of investing? To turn money today into money tomorrow.
You’re skipping over a few important things (cash, savings accounts, CDs—which are too conservative for almost everyone, even retirees) and terrible ideas like speculation (e.g. gold). You’re also skipping over inflation, which is important to understand long-term returns.
Oh, you do mention “letting money sit there” in passing, but this essentially assumes that the reader understands what “sit there” refers to.
Got a few million lying around? Nope. So I can’t do that? Nope, you can’t. Bonds come in units of $1000 face value, and stocks in lots of 100.
The bit about stocks is simply incorrect. Brokerage accounts allow you to purchase individual shares, so unless you’re investing in Berkshire Hathaway’s class A shares, you can buy anything.
(The one time I invested in an individual stock, other than employer stock awards, I lost over $9000 before I came to my senses. Now I’m fully invested in two mutual funds, but when I held that stock, my shares weren’t a multiple of 100.)
After all, wouldn’t you keep this secret for yourself if it really worked?
Not quite—you’d start a fund, and earn fees in addition to the returns on your own money. Then you’d eventually have to close the fund to new investors to prevent it from becoming too big.
Buying doesn’t destroy the basis the way selling does
Warren Buffett’s name is spelled with two Ts.
You’re skipping over a few important things (cash, savings accounts, CDs—which are too conservative for almost everyone, even retirees) and terrible ideas like speculation (e.g. gold). You’re also skipping over inflation, which is important to understand long-term returns.
Oh, you do mention “letting money sit there” in passing, but this essentially assumes that the reader understands what “sit there” refers to.
The bit about stocks is simply incorrect. Brokerage accounts allow you to purchase individual shares, so unless you’re investing in Berkshire Hathaway’s class A shares, you can buy anything.
(The one time I invested in an individual stock, other than employer stock awards, I lost over $9000 before I came to my senses. Now I’m fully invested in two mutual funds, but when I held that stock, my shares weren’t a multiple of 100.)
Not quite—you’d start a fund, and earn fees in addition to the returns on your own money. Then you’d eventually have to close the fund to new investors to prevent it from becoming too big.
“Basis” is incomprehensible to newbies.