Hi Everyone, total newbie here who is trying to use the market dip to start investing. When the low point of the current crisis will be reached is a completely different question and I am interested in general information. I do not want to bind myself to a place and therefore I exclude the purchase of a property at the moment, also not as an investment because I might want to emigrate and then I cannot take care of an object which is rented. General goal: Long term investing / growth Which "financial products" should I focus on to start my investing journey? Parameters No debt Renting Company car Single No kids Age 25 Emergency funds >6 months sustainability Disability insurance State pension insurance Tech background and happy to invest research time in investing / "managing a portfolio" but that is not a must German based in Germany Financial situation 3000€ monthly net income and around 1200€ total monthly expenses 1000€ of my monthly net income I would like to invest balanced / aggressive 185€ monthly going into employee stock purchase plan 30€ monthly going into a building loan saving contract, see below 10000€ emergency fund 6000€ stocks from my employer (still vesting) 1000€ in cryptocurrencies 49000€ savings I would like to invest defensive / balanced 10000€ savings I would like to invest aggressive 8000€ savings in a building loan saving contract, 1.5% saving interest, bad loan interest if I would use it but I can cash it out without fees Looking forward to help suggestions
Greetings, Yarx. Welcome to Stockaholics! I like it. You're in good shape. My only concern is your use of the word "aggressive". This is going to be worse than the GFC in 2008/2009. The majority of business is now in an existential struggle. Restarting the economy is going to be a herculean task. I suggest you look at companies that will survive the crisis. That doesn't leave a lot to chose from. Personally, I'm hanging onto my cash. When things like this happen, there is absolutely no rush to jump in. We haven't even seen the worst of it, yet. My suggestion is to hang onto your money. Don't be afraid of cash. Get out of anything underwritten by a corporation, like bonds or GICs. ... and buy some popcorn... retail. Enjoy the show.
I've been trading and investing for a long time, but I'm new to stockaholics too. I agree with the above answer, but I will add that silver and gold stocks have a big opportunity as the next recession will be inflationary. Most long term investors will just use underlying stock, not options, but I would recommend that when the vix is this high that investors short premium on their favourite companies and commodities, in this case as I said gold and silver underlying will benefit in the long term. Gold and silver have been doing bad recently in dollars but in terms of euros, they aren't doing too bad. If the Vix goes down a better strategy which I employed two months ago was a cash-backed call. With this strategy, you buy an ATM call option and leave the rest in cash. For example, if a stock is $100, buying a hundred shares would cost $10,000, but instead, I could buy an ATM call expiring in 4 months for $100, and leave the other $9,900 in cash, risking on the $100. Those are just some good strategies that I would use in your position, other than that your personal financial situation seems to be good. If you have any questions ask me here on stockaholics and I also have a podcast, Alpha Action, where you could find some long term bottom-up fundamentals you may want. Also, if you have a particular company that needs analysing or are having trouble finding any just ask!
Perhaps look for a double bottom, then a slight uptrend with heavy volume, and THEN start buying! Buy solid companies with good consistent earnings and that pay div's between 2.5 and 4.5%...these solid companies you would find in the DOW, or S&P. You might just buy an index of these funds, (instead of individual stocks...thought if you have a lot of time, you could buy the indiv's) like the OEX or SPY, or DIA. That would be less time consuming if you don't have much time to keep an eye on everything. Know your exit strategy before you buy. Like if your price drops below the 200 day moving average, SELL. Buy these two books at least - Your Future Paychecks And Raises: Get Dividend Checks In Your Mailbox Paid To The Order of You! by John Roberts and STOCK MARKET CASH TRIGGER: Learn A Simple Technique That Tells You When To Go To Cash by David Alan Carter If you go with gold stocks, as suggested by Romel, allocate no more than 20% of your money. I kind of like his idea and I also believe massive inflation is on the horizon, thus gold stocks might explode. My favorites are GFI, GOLD and maybe EGO and NEM. GFI jumped 14% today and looks like it may have made a double bottom. (though volume is low). With your setup now, you could be a millionaire by the time you're 50.
