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Originally posted by OnyxCougar
It *is* Vanguard. And I have elected to put some in mutual funds and some in the company, and I also am in the Employee Stock Purchase Plan. I think I'll switch the 401(k) to all mutual funds and leave the EPP for the stock in the company.

Those who invest in mutal funds always underperform the market. This is fact well proven based upon market history. In short, the so called professionals are some of the worst market investors. For example, at one point, MSNBC (I think it was) put a famous investor up against the monkey. Monkey selected based upon darts to a board. He outperformed the market specialist. Market professionals are too buy selling themselves rather than learning what really makes a good investment. There is great profit in selling themselves because so many laymen think you must be an economist or some kind of professional investor to invest in stocks. A concept better called a scam.

A best general source of information is the Nightly Business Report. Especially when Paul Kangas does the reports. Espeically Friday night when a market professional does a 5 minute summary suggestion. Listen to what he says. If he hypes cyclic trends and capital expenditures, then run. However if he talks about the company product and industry trends, then put his stock in your basket of 'stocks to watch'.

I spend much time watching and studying markets. Bloomberg Radio is another interesting source. But many information sources such as Wall Street Week with Fortune are a waste of time.

Lessons from both Peter Lynch and the sage of Omaha Warren Buffet are far more instructive. Read their books. What do both look at? Not the fancy numbers games promoted by market hypsters and other experts. Peter Lynch was most blunt. He followed his wife and daughters around the mall. Learned what they and their friends most liked. Then learned about those companies. Peter Lynch being 10 years every year consistent the best mutual fund administrator in market history. Look at what he is saying. Its not about economics and investment savey. That is what the ignorant liars must promoted so that you pay them. "Its all about the product stupid". Yes it is that simple to summarize - and more complex to do because you must do it every day or at least every week.

Again, mutual funds average less than the market. Obviously. You are paying a few percentage points every year to an 'expert' who really knows nothing more about the products than anyone else but must earn enough money to make his (industry average) $150,000 to $200,000 per year. Their profits - not yours - are their most important objective.

If you do go into mutual funds, then the best performing mutual funds are always index funds. No professional to make decisions. Therefore the penalty points (fees) are minimal. This is why index funds always outperform the average of all mutual funds. No professional taking big buck out of your investment portfolio.

What is an index fund? For example, one fund must buy every stock on the S&P 500. No market expert getting paid to make decisions. The decision was up front. They will buy every S&P 500 stock. No human taking his cut is why the index funds always return a higher average investment. Further caution. Many mutual funds have other hidden fees. More money that will not be there to be invested the next and further years.

But again, I return to Peter Lynch who only says what virtually every famous market investor says. Stocks, rather than mutual funds always average a higher rate of return. You buy a basket of five stocks - which is what he recommends the average investor to bet on. One will always be a dog. Three will be average performers. And one will be the star that more than compensates for the dog. It works. Literally any money I have is only from investment. I don't play money games. I learn about the products, invest with the intent of staying there at least three years - usually more. Look at stock prices every day or maybe three only to learn the 'attitude' of the market (how todays price reflects what the market rumor mill is saying), and get out only when it was obvious there was too much extravagent exuberience. IOW got out of everything after maybe 10 years.

Friday night at 6:30 or 7 on PBS. This is a good place to start. Nightly Business Report.

You have seen how I post. It is that same march forward on facts so solid as to not waver in attitude. Attitude necessary to make money in the markets. Too many people buy and sell only on the same 'feeling' that said there were WMD. Emotion is why we can make money at their expense. They brag about profits. But when I compare their examples to stock history (as I did with one 7-11 Store owner), they are not making much money. Instead they are enriching their broker while bragging about mythical profits.

Brokers don't like me. I don't make them big bucks. No one really makes big bucks by playing the market. Brokers should only make money when you buy and sell. Period. That means stocks - not mutual funds.

It is a rare individual who made even $20,000 per year working fully time by day trading. Very rare. For the same amount of money during that time, the patient investor made closer to $100,000. This is why you look at the product. Only product and its market will tell you what the company will be making in profits for the next 4 years. Hypsters and stock brokers are too busy studying financials and cyclic trends rather than learn what really makes a stock profitable. They look too short term.

Which comes to the part of how to look at the product. First, I don't know anything about the retail food industry. I don't even try to invest in retail. I don't understand the product. Invest only in what you understand. What is your background? Start there.

The first stock will always be a loser. (And don't invest in your own employeer). You must do that to really understand investment. Until you do so, you will always be a loser at the investment game. Example of a big loser. $5000 in a stock that sells for $4800 three years later. So why is that so important? Because without that $5000 at risk, you will not view your investment with the proper mental attitude. There is a big difference between being at risk and only playing a fictional stock market game. BIG difference in how the human brain analyzes the day to day events when the risk is real.

IOW don't drop everything into stocks just yet. Start only with one. And how do you analyze your current and future potential investments? NY Times and Wall Street Journal are essential. Barrons Weekly is periodically helpful. Industry trade rags are important.

In the newspaper stores, smart investors looking at the inside page of a WSJ or NYTimes. They are looking at list of companies often indexed on second page of second section. They are looking for any articles that mention a company from their 'basket of stocks'. That is what the investor does. He looks every day not for the big news. Notice how I get so much information about George Jr and Iraq. I constantly look for the little details. That is what the smart investor is doing everyday. Keeping his eye open for any trivial little detail involving a stock and the industry of that stock. Looking mostly at the products. Those details suggest well in advance what the future is for that industry and whether it is time to invest.

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