Suppose I wanted to trade, what say ye?

A few months ago I was debating between a trading position and this PE analyst position I am at now. Been here for about 3-months now, have learned a lot. Another benefit, when you work 90-hrs a week, apparently you save a lot of your paycheck without realizing. Also I learned last Friday at the firm’s Christmas Party, or Holiday Party as I have been corrected multiple times (lots of Jews here), that I will be receiving my yearend bonus even though I have not been here for a year; 20k-ish. Nothing too fancy, but I was thinking right now would probably be the best time in my life to venture into trading if ever. I am single, no bills, well Law School loan, but whatever, and really just no real responsibilities.

Question is, what should I look into? Options, futures, value, emerging markets? I also thought about going into foreclosed properties with my sister, but then I though, Nah. Anytime you go into anything with family, it’s a disaster.

you will lose your money in trading if you asking what you should be trading…spend it on some classy broads…

You could pay down your student loans and earn yourself a generous 7% return with zero volatility. As a PE Analyst would you need preclearance on your trades? I imagine that would make it more challenging to actively trade your portfolio.

Check out wall street oasis. And I think small cap Mexican ETFs are gonna pop BIG in 2012. anyway the general theme I’ve seen is that people starting out tend to take outsized risks without realizing it, so start small. Also read up on your firm’s preclearance requirements, if any. Even the most profitable trade ever will likely be dwarfed by your salary+bonus.

7% after tax = 10+% pre-tax gain stick with paying down debt and leave trading to the pros

Err… what do you mean by “trading”? If you can get a job on a good sell side desk with a strong product, or maybe a job at a good hedge fund (you know, one with actual strategies and a track record), then those are doors to lucrative and consistent compensation. The hours will probably be significantly better than what you described for your current job. If, however, you are thinking about prop desks that give individual traders shares of the profit, or even worse, going out on your own, then you should probably reassess your risk tolerance levels. Unless you know something special, you will most likely blow up and lose money, time or both.

Agree 100%.

Pay down debt. Also, take a trip somewhere awesome for a week.

90 hours weeks means youre working 13 hours a day 7 days a week. How are you going to be able to trade actively? You realise trading is as much about looking for opportunities amid the noise than actually placing the order with your broker. Trading half heartedly is a suckers game. The only person better off from this will be your broker. More importantly, losing your hard earned money on a trade will probably affect you mentally and prevent you from performing the best at your current job. My advice which will sound probably quite dated and conservative is: dollar cost averaging i.e. buy the index (e.g. s&p or a diversified etf) every month in the same dollar amount Something else that might be helpful to prevent you from being a sucker: Read Reminiscences of a Stock Operator by Lefevre

Yeah… unless you really have a lot of money, trading your own retail account has negative expected value. It’s just not efficient due to commissions and lousy execution from retail platforms. It’s not a matter of your skill. The game is rigged against retail traders, who do not have the same market access as institutional investors. Some people enjoy the Vegas-esque thrill, which is fine, as long as you realize that you will probably lose money in the long term. From a money making perspective, it’s better to buy index funds and hold them for a long time, like the previous guy said. I’m not so sure about dollar cost averaging though. It makes sense in theory, but empirical studies apparently show that it’s better to just put your money in as soon as possible. Supposedly, the compound growth effect outweighs the dollar cost averaging effect.

I’m not so sure about dollar cost averaging though. It makes sense in theory, but empirical studies apparently show that it’s better to just put your money in as soon as possible. Supposedly, the compound growth effect outweighs the dollar cost averaging effect. I’ve been thinking about this lately especially with 401k plans. Is it better to max out your 401k in the first couple of few of the year - say 100% of your income until it’s fully paid. Or, should you split up the funding throughout the year to catch the swings of the market?

I think dollar cost averaging give you a good balance between the two approaches i.e. putting all the money in at the beginning of the year and timing the market swings. The first approach could be disastrous if you put a large sum in the first half of the year before a decline in the second (similar to this year). The latter approach of timing the market is also filled with many hazards. Being able to catch the market at the bottom and sell at the top is deceptively hard. On the other hand, in dollar cost averaging you infuse some discipline in your approach by buying a fixed dollar amount every month. More importantly, you buy fewer units at higher prices and more units when prices fall. The discipline and common sense of the method allows the individual to prevent himself from becoming a speculator.

How is the Jews comment relevant? Anyways, ETFs are great if you’re just looking to invest (not actively trade) and don’t have the time to constantly be watching your portfolio.

Dollar cost averaging works well when you are saving for retirement, in part because you develop the discipline to sock stuff away every month or two. But if you just have a lump of cash, it doesn’t make sense to put it in $100 at a time over five years or whatnot; you should just make a sensible asset allocation that is consistent with your ability and willingness to take risk. If you think you might be on the verge of a market correction but are worried about investing everything just before it, then it makes sense to step into the market in bits over a timeframe. If you have a market timing methodology and you have reasons to think it works, then employ it, otherwise do the above.

You say you are single, you should focus on getting hot classy babes.

hmm i agree with the comment above bro. it’s time to find some 1 who love u, not ur income