FLIG FAQ's

• You can trade equities, ETFs, cryptocurrencies, bonds, mutual funds, options, and futures.
• While I would not recommend investing in cryptocurrencies, options, and futures for most people.
• If you do want to play around with the above securities, I would rather you learn and lose fake money playing FLIG than real money with a brokerage account.

You invest for the long-term because the market gives you a chance to grow your savings versus cash which does not really grow after taking inflation into account. Diversification helps take away some risks but not all. If the ups and downs of the market cause you too much stress then invest less in the market or check out target-date retirement funds.

In this link, you can see historical returns from 1928 in cash, gold, stock market, etc. Sorry, it is an eyesore but it tells the story of why. The next comment you may ask:  will the market always go up? No guarantee there - just look at Japan. The key is that if our economy keeps growing and stocks keep taking care of their shareholders then the market should go up.

• That answer depends on a lot of things. There are many types of ETFs that invest in all different sorts of investable assets and performance should take into account returns and risk. You should also take into account your own tolerance and ability to take risks.
• If you are only investing in one stock ETF, you would probably go with an ETF that tracks the S&P500 index (VOO) or an ETF that tracks global markets like VT. These are both ETFs from Vanguard but other companies offer similar products.

• You are right. The main thing we teach in finance is to diversify your portfolio. It reduces risk compared to betting on a couple of stocks - which can look tempting in hindsight when you consider the glamor stocks of the last 10 years.
• Just because the glamor stocks did well in the last 10 years does not mean they will do well again in the next 10 years.
• The definition of glamor stocks that get all the investor attention changes over time.

• A book I liked about value investing is this one: The Little Book That Still Beats the Market- by Joel Greenblatt
• The book “Technical Analysis of the financial markets” by Murphy is considered one of the classics of technical analysis.
• I would caution you that if you want to build a value portfolio or do a technical analysis you probably will not do better than the S&P 500 index.
• Value stocks do not beat the market every year and you would need a diversified portfolio of value stocks to reduce risk. So it could be a lot of work for how much gain? Check out the returns of value ETFs (VTV) versus the S&P 500 index (VOO).
•  In using technical analysis you are trading against hedge funds that have spent millions and millions of dollars on high-speed access, machine learning, and genius people to write computer programs to day trade. Do you think you can beat them?

• The quick answer is that there are other tax-preferred retirement plans like traditional IRAs and Roth IRAs. You would set these up at a brokerage, Schwab, Fidelity, Vanguard, or your bank.
• This document from the IRS goes over the limitations on putting more money in when you have an employer-sponsored retirement plan:  https://www.irs.gov/retirement-plans/traditional-and-roth-iras
• It might be worth putting together a financial plan that starts with your overall goals and then looks at creating a budget plan to meet those goals. For example, you may want to pay off high-interest debt or have some easy-to-access cash saved for emergencies.

• Private equity is restricted not because the returns are always so great but because there is less information to provide investors which makes it riskier.
• You might read about a hedge fund having fabulous returns but not about the many that have worse returns or go out of business. Unfortunately, if someone does have an incredible investment strategy they will keep it to themselves or with a select few investors. So I would not trust a hedge fund that develops a product for the common investor.
• Here is a hedge fund that has developed a mutual fund anyone can invest in: https://www.aqr.com/
• And here is info about the fund.
• You might also be thinking about venture capital and it has gotten easier to invest in start-ups before they become public but these investments, I think, are very risky, and not very liquid (might need to sell at a low price).
• Moreover, venture capital returns rely on a few of their investments hitting it really big, so you need a well-diversified portfolio.

• The best I could answer is to look at a historical chart of the stock market. There are often ups and downs. Historically the market goes up after it goes down.
• As long as the overall economy (GDP) keeps growing the stock market should keep growing (knock on wood because there are no guarantees).
• If you are thinking about trying to time your investment to buy at a relative bottom, good luck it is not easy. Check this out: S&P 500 Index - 90-Year Historical Chart

• Besides the FLIG website, I am developing a 1 credit class and am looking at some of these books:
• Managing Your Money for Dummies
• Get Good with Money
• Personal Finance Quickstart
• Certified Financial Planner Curriculum by eMoney
• https://www.mymoney.gov/
• Tons of material by Dave Ramsey – but may not be for everyone
• Financial Literacy Guide- Harvard College
• The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market by John C. Bogle

• Probably an S&P 500 mutual fund or ETF with Schwab, Fidelity, or Vanguard where can you set up an automatic transfer every month. You should also consider your overall financial plan and whether to use a retirement account to do that investing. Mutual funds can be a pain in a regular account due to capital gains taxes you can incur without even selling.

• The world of investable assets is separated into what’s called asset classes. The main asset classes are cash, equities, fixed income, and alternatives. Alternative investments include things like real estate, commodities, collectibles, and anything else you can invest in that is not-equity or debt. Sometimes venture capital, private equity, or hedge funds can be lumped in here.
• REITs are a good way to get into real estate via the stock market. There are commodities-based ETFs but I can’t vouch for their long-term returns. They do well during shocks so you have to be able to predict commodity shocks to do well.
• There are sites where you can look up different ETFs like etfdb.com.

• Hard to predict, but usually, the stock market leads the real economy by 3-9 months. Once we are in an official recession the market will likely already have gone up.
• Short-term predictions are more like gambling.

• For the average investor, probably not. If you fear a global economic collapse then perhaps yes. The problem is that gold does not produce profits like a company.
• Gold is up about 3.34 %/year on average over 50 years but recently it has done well due to inflation concerns. Investing in a gold fund would decrease those returns somewhat due to fees. Many view gold as a good hedge against inflation. 
• The stock market assuming you reinvest your dividends is up about 10% over the last 50 years. It gave about 3 %/year in dividends over that time.