check out: INSP. ADI, CSCO, SIMG, SNDK, CNXT, SEBL SUNW

just to name a few hehehe

Here's why - there are 6 billion people. There are roughly 300million Internet connections. Lot of room for growth. The bigger the Net gets, the bigger Cisco gets.

Another reason: Something called IPversion6 is coming out. This is a new implementation of IP addressing that will allo things like your toaster and other things to be connected.

Sound stupid? It isn't - picture: your alarm clock goes off, coffee maker starts, etc. You can program your VCR over your cell phone, etc.

Cisco and Sun will be leaders in this realm.

Mr Dank is generally right about diversifying. But then again, there are plenty of people who probably wish they owned more Dell and less other shit 10 years ago.

You really can't go wrong with Cisco. Sun is a great one too.

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Basement Dweller

Even better? I'm sure you didn't mean that. First of all, technically, an index fund is a mutual fund. That aside, there are many mutual funds that have consistently outperformed index funds over the years. It's true that most mutual funds have higher management costs than index funds, but a lot of them outperform them significantly, thus more than making up for the higher management costs. (besides, we're talking within half a point difference in costs for most) Don't get me wrong -- index funds have their place, but saying they are better is totally inaccurate -- they're just a different kind of fund that may or may not be appropriate to your situation and outlook.

I know you probably didn't mean it to sound the way it came off, but I just wanted to take a moment to clarify that for people that aren't familiar.
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For others, another interesting way to invest is sector funds -- you can buy sectors of industry like technology, electronics, etc... They fluctuate a lot more than conventional funds because they hold fewer companies, but they can be lucrative if you've got a stomach for risk...

First off, you're right; I didn't mean to unequivocally claim that index funds are always better than conventional mutual funds. I realize that there are a *few* money managers out there with strict investment disciplines that have outperformed the S&P by 1, 2, or even 5% annualized over more than 20 years (if you can get your money into these funds, that's great). But let me point out that the vast majority (about 80-90%) of actively managed funds underperform the market each year. Even the best active managers get burned-- Warren Buffett's hot streak finally ran out in the first half of this year didn't it? Mean reversion does finally win out in the long run.

Moreover, there is formal research that conclusively shows that, in the long run, indexing beats most actively managed funds and by a significant amount (check out "A Random Walk Down Wall Street," if you haven't already read it). The only people who contest this evidence are active fund managers who don't want to lose their paying customers.

In conclusion, my perspective is that most individual investors are better off buying and holding onto index funds, rather than meddling with securities or actively managed mutual funds. Not only will a broad range of index funds outperform a professionally managed portfolio in the long run, but investors can avoid expense charges and trading costs, which decrease returns. It's difficult to get further into this unless you have knowlegde of modern portfolio theory.

PS- I like sector funds too.

Mutual funds have the same risk as buying a single stock, and a single stock CAN outperform a mutual fund in one day!!! Its a matter of what stocks you own. Mutual fund is just a collection of stocks some money manager put together and call it a portfolio and hope for the best. If you do decide to go with a mutual fund, go with the NO LOAD ones, meaning that you don't have to pay a commision to your broker. Most old folks and non risk taking chump stick to funds. my $.02

And another reason why I don't play funds is that you can't make $$$ when the market drops. YES, you can make $$$ when the market tank, its called "shorting", your buying high and selling low, meaning that your buying to [borrow] that stock from someone who owns it and selling it back to them at a lower price you got it for. You pocket$ the difference. Its just the opposite of "long", buying low and selling high. So on ANY given day, you can make $$$$ regardless of the market prerformance. I just use the market as benchmark to decide weather to go long or short for that particular stock. On some days, I can make 60% of what I invested in for that stock. I average 3-4K a day just trading, and YES I trade on margin. Not bad for a kid who droppd out of med school, brought a 98 Winnebago (cash,up front), tour America and meet different women huh? (I love camping at nudist camp site).

I like how you pointed out that "a mutual fund is just a collection of stocks some money manager put together, called it a portfolio, and hoped for the best." This is the basic premise of the Random Walk Theory.
It argues that, in the long run, it is impossible to consistently "beat" the market, and that a blindfolded monkey would have just as much success as a so-called professesional money manager in selecting a portfolio of stocks. I don't want my hard earned money in the hands of a blindfolded monkey, do you BigTruck? (LOL)

Btw- Pokemon, I'm very interested in getting into trading myself. Do you work at a day-trading firm or from your home using some kind of Level 2 quote system? I've been reading books on the subject on day-trading lately, can you recommend any good ones? I'd be interested to hear from you as I'm trying to learn all I can about day-trading.

PS- shorting is an advanced technique; do not try this at home unless you are a sophisticated investor or have some inside information (if you do let me know, LOL).

Later bros,
GQ

Pokemon, thank you, you helped me prove my point about actively managed funds versus index funds -- your funds, according to what you and GQ said, outperformed the market by a good 8 - 10 percent over the 3 � 4 year period that you mentioned.

NOTE: These types of funds I don't recommend to those with weak stomachs � they can have drastic swings, just like individual stocks.

As far as paying loads, I agree for the most part that no-load is the way to go, BUT if a fund performs better than its peers (i.e. Select Funds mentioned above), it may be worth paying the load. Plus, many times if you are buying in an IRA, the loads are waived.

i prefer to invest in stocks. my biggest earnings have been made in: ADI, INSP, CSCO, SEBL, MSFT, ORCL, SUNW, ITWO just to name a few. i am an investor not a trader.

Once you compare apples to apples, what you're making is a blanket statement that all individual stocks have beaten all collections of individual stocks. Doesn't make sense huh?

That said, I like individual stocks too, but I think it gets a lot more complicated when you go that route, thus perhaps making it inappropriate for beginners. (which is what the original purpose of this thread was) I went on about funds because I thought a few things needed to be cleared up based on some comments in the thread.

For people that know what they're doing in the market (and that have money), stocks are fantastic. Sounds like you're jamming with them! Congrats! I've got my fingers in a few stocks and have my eye on a few more as we speak (er.. type). Peace bro.

i made a very broad statement that historically stocks outperform mutual funds. yet, this is taken from historical data bro. i'd be willing to bet my bonus that you could not find one person that would disagree with this. this is a fact that is taught in investment 101, undergrad. i am also perplexed about your statement that i said that "all" individual stocks have beaten "all" collections of individual stocks. this is not true. i could loose my license by saying anything close to this. Stocks, mutual funds, bonds, CD's, UIT, treasuries, warrants etc are all considered debt instruments my friend. not sure what you mean by me not comparing apples to apples. i compared one debt instrument to another. you have taken one sentence i made and went on a tangent my friend. if you like to compare notes we can. but before we do this i am interested in knowing a little about yourself, so that i know i am not wasting my time. hehehe

My point is that not all funds are designed for PERFORMANCE -- some are designed for income, some are designed for preservation, some are designed as a tax shelter -- they're not meant to be performance oriented. Therefore, averaging them in with performance-oriented funds if you want to compare performance doesn't make sense.

If you want to compare on a performance basis, you have to limit your selection of funds to only performance-oriented funds. For the most part, performance-oriented funds are comprised of stocks. Therefore when you limit your comparison to the abovementioned criteria, you're comparing stocks to stocks. That was my only point.

If I'm wrong, tell me me how -- I'm certainly not above learning and I'd imagine you don't get all those fancy licenses without knowing your stuff.

If you feel that it's a waste of your time, feel free not to read anything I write.

Later.

I luv you man ! hehehe

we will learn from each other. the so called fancy licenses mean i knew how to sit down and study to pass. that's it. i learn something new every single day i am here. i am still a newbie to the investment game. let's help each other out. i look forward to reading what you write. you have been on point with almost everything you have said. i would assume you too work in the industry. you defintely don't sound like a newbie. take care muscle head ! and let's keep the investing post going. hehehe

2EZ- What role do you play at the firm you work for? Are you into I-Banking? Financial Consulting? Just curious, as I'm trying to choose a career path myself.

I checked alot of shit out @ www.globeinvestor.com any cheep shit to take risks with also?

in the business 8 yrs. my major in college was Actuarial Science and Risk Management. i was first in I-banking for , then Financial Consulting/Investment Advisory. a lot of number crunching / TA work and now i supervise (unit leader) operations at a B/D here in NY. i have a lot to still learn. ultimately, i want to earn a DBA, yet will be satisfied with a MBA. hehehe