Newbie seeks your perspective on trading

Ok here's a simple example using the S&P500 index:

The expense ratio of Vanguards SP500 fund is 0.18%
https://flagship.vanguard.com/VGApp/hnw/FundsFeesMinimums?FundId=0040&FundIntExt=INT

The expense ratio of the SP500 ETF (ticker SPY) is 0.08%
http://finance.yahoo.com/q/pr?s=spy

You get a net savings of 0.10% off of yearly expenses by going ETF instead of a mutual fund.

How they claim a whopping 30% gain I have no clue. Unless they're talking about those ETF's that track a specific sector. But then you'll be dealing with LOTS more price volatility depending on what sector it is.
 
Can you beat the market on a yearly basis? Of course!

Is it really hard? Not if you know what you're doing!

Is 30% yearly return with little risk reasonable to expect? Not really!


This business isn't about finance, it's about risk management. I don't manage money, I manage risk.

Think about this for a little while and some of the courses prognostications will come a little further into the light of reason.

I am a firm believer that nobody cares about your money like you do. Consistant returns above the 8% level are definitely achievable, but 30%?

This business takes time, patience and intelligence. Use your intelligence and make your own decision about that course you took.


If it's too goo to be true...... it usually is (Wade Cook anyone?).
 
spinner - thank you for the correction. i glibly assumed it was a typo...thanks for the followup.

i have something else for newer traders to read - curtis faith's excellent blog, wayoftheturtle (dot) com. it's the title of his book (mine's STILL in the mail, damn it!) but his posts on trading are succinct and can hopefully help people out.
 
NKHOI - I agree with you. From the immersion of reading the posts and other site sites this week, I gather there is a distinction between trading and investing. I'm sure you have a better definition, but from my week of reading, I'd say that it sounds like a trader would routinely go in and out of a position in a day or two whereas an investor might go in and out in a week or even a few months or longer. Granted that's a generalization, but if correct, I guess my exposure has been to "investing."

So if there are big differences in answers and thoughts people would share with me as a perspective "investor" versus a trader, then great, I'm all ears. If there are different sites I should look at that are more populated with Investors who might have a better picture of that world, great,, what are they.

Also, nkhoi - thanks for the distinction and the thread.
 
Mike,

I signed up for an account here just so I could respond to this thread as it really hits home.

My brother signed up for the Investools PHD program (Coval et. al.) three years ago and the following year I tagged along with him for a repeat of the entire course (they allowed you to bring family members along back then).

I can honestly say that for the excessive amount of money they charge the only thing I really ended up with were some good friends that I met while attending classes.

Their approach to trading is far from unique and certainly isn’t focused on giving you an edge. It is entirely focused on selling you more courses. One hundred percent of their material could be found in about a half dozen books from Amazon.

Out of the three-dozen or so people I keep in contact with, none of them are living the “lifestyle” Investools is selling. Two blew out their accounts completely and left trading, one is now working for Investools as a WD3 (workshop director), eight are break-even or slightly ahead and the rest are either down (including the WD) or have lost interest and drifted back to their former professions.

The Investools “lifestyle” might exist but I doubt anyone from Investools is living it (except maybe the instructors raking in those course fees).

Out of the many books on my trading shelf I would suggest these to give you a good foundation:

Technical Analysis of the Financial Markets – John J Murphy
Trading for a Living – Dr. Alexander Elder
Come Into My Trading Room – Dr. Alexander Elder
High Probability Trading – Marcel Link
How to Make Money In Stocks – William J O’Neil

Do yourself a favor and put the money you were going to spend on Investools in your trading account and start with those books.

I don’t have much animosity towards Investools, they’re working an angle and I was naïve, but if I could go back and do it all over again I would have just read the aforementioned books and saved myself the money.

Trade well,
fox
 
Quote from mike_balt:



Then they said that you could convert your funds to ETFs and with very little attention push your returns from 8% to about 30% with very very little risk.

So what’s the likelihood of that? Are the fees so large that simply going to an ETF will make a very appreciable jump in returns?

Can a set of trading rules be used to go in and out of ETF’s such that returns can be pushed to 30% without much risk?


And in kind of a rich dad poor dad way, they profess that the market is the secret that the rich keep from general society. The rich and the investment houses perpetuate the myth that the market is dangerous so that the average Joe won’t apply themselves to it. But the rich do apply themselves and therefore play in an exclusive area, and make huge money because all the masses just park their money in funds.

Thanks once again for your perspective or directions to places I can get unbiased answers.
More...
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Let us see,''returns of ''30%, very little risk, market is a secret'';
sounds unlikely.

''.....All the masses just park thier money in funds'';
false for sure.



:cool:
 
So I didn't get Mike Coval... I got Scott Martin. He really would make a good motivational speaker. His strategies in LEAP and covered calls aren't for everyone - and he says that readily.

The majority of people are very bad at judging 'risk'. This results in gamblers and the bird in hand is better than two in the bush - which is true, but many people don't understand how to balance risk and gain.

Anyhow, that's probably why it's half motivational speech - while the information may be out there for free, finding it isn't easy, takes more motivation and knowledge and time than most people can muster on their own.

But the big focus on Investools isn't just a set of good tools - but a system of mentors plus basic rules and methods that can work.

Once again, looking at the money made by various Investools class teams vs the amount spent to get it shows that while they're breaking even, teaching Investools doesn't pay as much as they live. For them it seems to be a way to get a stable base income, pooled health benefits - it's actually incredibly expensive to get individual benefits like you can get from a job - and then some reason to travel and talk.

I'd say looking at it, someone like Scott /needs/ to manage, to lead, and to speak. Just like my mom needs to work, my dad needs to have a political cause, etc. People need more than raw cash from work, at any rate ^-^

But we'll see if it can help. The tools are fairly impressive - and I think with some additional books and maybe some free classes from other sources to fill the gaps it'll be fine. Their search engines are impressive and the Prophet tools really seem pretty impressive for the scant cost I've paid so far (I'm splitting this with my mom).

-Crissa
 
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