What do you think about starting investing early, lets say freshman year at college?
And I don’t think about some big money here, I’m thinking about small amounts or demo accounts/simulations.
Do you think it is better to start from a point where you have at least some level of better understanding of the markets (for example: after at least passing CFA level 1, getting a good internship in finance industry or getting a Master in finance) or you prefer starting as early as you can, without “sufficient” knowledge?
I have always thought that its better to reach some “sufficient” level of knowledge and see first how its done by professionals. Logic behind it is that even I know its good to have experience and learn on your mistakes I think you can develop “wrong way” of looking on markets that can later be hard to change. Especially regarding the psychology of investing and biases. I have seen some friends who have been trading on demo accounts for some time and they have embraced what I think is faulty logic. And this can be very hard to change later on.
Maybe it would be better to absorb industry practices and then develop your own “way of thinking” and investing.
Around 2000-ish my decision was to open an account with a couple thousand dollars (knowing I would probably lose most of it), and assess my starting skills in the brutal real markets. Within six months I had lost something like 40%, LOL!
What I learned from that – although I had some core skills (reasoning, studying human behavior/psychology), I lacked masters-level investment knowledge. There is just too much complicated investment language/concepts, which are used to deceive noobies. I also made decisions based on personal biases, a typical noob mistake.
So I signed up for the CFA, and been doing better ever since. And I don’t regret losing that money, it was educational. You’re going to need both; education plus market experience, just a matter of preference I guess on the order.
Investing ? Honestly never too young. Actually I am planing on giving money (like a hundred € here and there) to the kids that I’ll have one day for them to invest/manage themselves. But they’ll have to convince me with facts, first, for why they are picking stock XYZ.
It won’t be about the money (although I guess it can be a pretty cool experience for a 10 year-old to manage a thousand bucks), but rather about giving them early reflexes about common sense, the concepts of long-term investing, etc.
i started getting obssessed with the market when i was in hs. i did sumulations and technical analysis cuz well i was young and naive and wanted to be a trader. did well since it was leading to 2007. until everything crashed, and i lost but it was all fake anyway. my interest eventually let my parents handle their 401k around 2008. in the 401k i made money cuz well tis diversified, and well everything was already going up. then my parents eventually gave me 3k to play around with around 2009. i did well again, sicnme everythign did go up. learned about options. did even better. i bought an ipad, a ton of apps, cuz well i went for the riskiest shit so i made a lot. i was right until i started becoming pessimistic (another sign of being a newb), i wanted to have a long hsort strategy kind of crap. anyways things roared to 2010, and i was humbled to say the least. when i lost all my gains, i decided that my previous performance was pure luck, and transaction costs were ridic. i think i spent $500 on comissions, this is with a 3k portfolio. still i learned a lot, and i broke even and got a few goodies to show for it. by 2011 i got a pbig internship working on selling calls analysis. graduated. worked for stats consulting littigation firm for a year. started the cfa exams. cleared l1. got an investment job with a pm who picks stocks and has a concentrated portfolio with over 1b+ assets. learned a ton from both the program and my job, and now im confident. that if i had 500k. i would never need to work in perpetuity. juss pure pssive gains from stock market for life. and this is waht i love most about the markets is that i can quit and juss live of the market. and that independence is really what makes me love it.
so now back to waht you want to learn:
is to get advice from the very best. read their philosophies. learn from their mistakes. dont listen to any shmuck, even me. my biggest regret is prolly reading a lot of crap info, books written by shmucks and no skin in the game or people talkin their book. there is a lot of crap info you have to filter. so let the geniuses do it, and emulate their process (dont necesarrily buy what they buy) . i personally follow people who are great and consistent with a long track record. you have the right thinking. from what i read, youre asking the right questions so ur in the right path.
oh and another advice: try not to overtrade when u started trading for real. i feel that everyone does at the beginning though so its ok even if u dont follow it. :). and when u start your live account, watch over your emotions. you really gotta learn to not care as much. protecting your downside, is more important than the upside. and never buy options, cuz u pay the premium to play the game.
here’s a link of what to watch: they are all pretty much primers.and very simple to udnersatnd.
don’t trade unless you have 6 months of expenses emergency cash savings on hand… and have maxed out your 401k contribution with the annual limit (17k) or whatever it is… This would be the most sound financial advice.