http://blog.lendingclub.com/2008/01/29/tired-of-working-make-your-money-do-it-for-you/ The Official Lending Club blog Sun, 29 Jan 2012 13:31:47 +0000 hourly 1 http://blog.lendingclub.com/2008/01/29/tired-of-working-make-your-money-do-it-for-you/#comment-570 John Wed, 30 Jan 2008 00:52:27 +0000 http://blog.lendingclub.com/2008/01/29/tired-of-working-make-your-money-do-it-for-you/#comment-570 Bob...humor my friend, humor... Bob...humor my friend, humor...

]]> http://blog.lendingclub.com/2008/01/29/tired-of-working-make-your-money-do-it-for-you/#comment-569 Bob Smith Tue, 29 Jan 2008 23:26:23 +0000 http://blog.lendingclub.com/2008/01/29/tired-of-working-make-your-money-do-it-for-you/#comment-569 Ugh... your section on stocks is WAY off: "Fortunately, no one has lost anything since the Great Depression, so odds are pretty good you will come out ahead." Not true. Plenty of people have lost money in stocks since the depression! Where do you get this stuff? "Provided the economy is doing well and you have someone smart to invest your money for you, the stock market can be a great investing tool." Where to begin... First, the economy doesn't need to be doing well to make money in stocks. Second, one of the WORST things you can do is find "someone smart to invest your money for you". That is almost a sure way of encountering expenses that can take a decent return and turn it into a mediocre or poor return. Those who understand what they're doing will almost always advise beginners to avoid brokers/planners. "The return is generally much higher than anywhere else..." Returns are volatile. You can't just make a blanket statement that stock returns are "higher than anywhere else". Whether they are higher, or lower, depends on many things. "There are basically two different ways of investing in stock: long-term and short-term." No, there are MANY ways to invest in stocks: --Individual stocks vs. funds --Managed funds vs. index funds --Mutual funds vs. ETFs --Load funds vs. no-load funds --High expense ratio vs. low expense ratio --Diversification vs. concentration/sectors --And many more... Rookie investors should not be day-trading - period. That's pretty much a no-brainer. So when you leave out all the important decisions a new stock investor must make and focus strictly upon long-term vs. short-term, it displays a fundamental lack of knowledge about the entire process. You also display a gross lack of understanding about bond investing: "The wading pool of big-time investing would be the bond market, thanks to its relatively safe return and higher interest rates." Do you not realize that the prices of bonds can be very volatile? An individual can lose money with bonds if they are unable to hold to maturity. Furthermore, real returns can be, and often are, negative! This is no "wading pool". Bonds are actually more complex and more poorly understood than stocks in many ways. "They are a safe, comfortable means of investing (provided you don’t invest in risky junk bonds)... Unless the United States government goes down in a flaming ball of disaster, there is really nothing to worry about." There's no way that you should be making such blanket statements about junk bonds - they actually have a place in a well-diversified portfolio, and can provide excellent returns. And once again, bonds can provide an investor with plenty to "worry about". Anyone who doesn't know that shouldn't be writing financial articles. It's almost as if this article was written by someone who read a couple of magazine articles about investing, forgot most of what he read, and then decided to write an article. The author knows almost nothing about the subject. This is perhaps the worst article I've seen on the subject. Ugh... your section on stocks is WAY off: "Fortunately, no one has
lost anything since the Great Depression, so odds are pretty good
you will come out ahead." Not true. Plenty of people have lost
money in stocks since the depression! Where do you get this stuff?
"Provided the economy is doing well and you have someone smart to
invest your money for you, the stock market can be a great
investing tool." Where to begin... First, the economy doesn't need
to be doing well to make money in stocks. Second, one of the WORST
things you can do is find "someone smart to invest your money for
you". That is almost a sure way of encountering expenses that can
take a decent return and turn it into a mediocre or poor return.
Those who understand what they're doing will almost always advise
beginners to avoid brokers/planners. "The return is generally much
higher than anywhere else..." Returns are volatile. You can't just
make a blanket statement that stock returns are "higher than
anywhere else". Whether they are higher, or lower, depends on many
things. "There are basically two different ways of investing in
stock: long-term and short-term." No, there are MANY ways to invest
in stocks: --Individual stocks vs. funds --Managed funds vs. index
funds --Mutual funds vs. ETFs --Load funds vs. no-load funds --High
expense ratio vs. low expense ratio --Diversification vs.
concentration/sectors --And many more... Rookie investors should
not be day-trading - period. That's pretty much a no-brainer. So
when you leave out all the important decisions a new stock investor
must make and focus strictly upon long-term vs. short-term, it
displays a fundamental lack of knowledge about the entire process.
You also display a gross lack of understanding about bond
investing: "The wading pool of big-time investing would be the bond
market, thanks to its relatively safe return and higher interest
rates." Do you not realize that the prices of bonds can be very
volatile? An individual can lose money with bonds if they are
unable to hold to maturity. Furthermore, real returns can be, and
often are, negative! This is no "wading pool". Bonds are actually
more complex and more poorly understood than stocks in many ways.
"They are a safe, comfortable means of investing (provided you
don’t invest in risky junk bonds)... Unless the United States
government goes down in a flaming ball of disaster, there is really
nothing to worry about." There's no way that you should be making
such blanket statements about junk bonds - they actually have a
place in a well-diversified portfolio, and can provide excellent
returns. And once again, bonds can provide an investor with plenty
to "worry about". Anyone who doesn't know that shouldn't be writing
financial articles. It's almost as if this article was written by
someone who read a couple of magazine articles about investing,
forgot most of what he read, and then decided to write an article.
The author knows almost nothing about the subject. This is perhaps
the worst article I've seen on the subject.

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