I am a 40yr old senior system engineer at a fortune 500 company. I am a long term investor stuffing away 15% of my income mostly through a self directed 401k. I am a student of Lynch, Graham, and the Gardner brothers, but I have no formal financial training. In fact, I have no college degree. That hasn't stopped my career as I have been elected by my peers to the top 3% of the technical staff.
I first got into investing in late 2000 based on a penny-stock tip from a friend. I'll bet you can guess how that turned out. With that lovely experience and the bursting of the dot com bubble I gave up and didn't think about stock investing for a long time. I tried to stuff away some money is "safe" mutual ...More funds, but in 2007 I decided that I needed to learn how to invest in stocks again. (I really have great timing right?) Fortunately this time I started by reading books and I chose (I think) some good ones from Motley Fool which led to reading Peter Lynch and Ben Graham. With this new found knowledge I moved from 100% mutual funds to 90% individual stocks.
While I did lose 60% of the value of my 401k from 2007-2008 (including a horrid investment in Washington Mutual) my new knowledge about long term investing only made me invest more and more of my income. I felt strongly (and still do), that I was actually fortunate to get into investing during a recession as that is often the best time to invest in almost anything. Assuming that the company survives (unlike WaMu) almost everything will go up significantly.
From the moment I truly understood the power compounding I have become obsessed with investing. It's really amazing how powerful and simple compounding is and yet most people just don't understand nor wish to understand it. I just wish it hadn't taken me until age 34 to figure that out.
My obsession has paid of in spades as my portfolio (as of 5/2013) has a CAGR of 10.8% since my start of 2007 compared to the S&P's return of 5.6%.
My advice for investing
- Become an educated long term investor by reading Ben Graham and/or Peter Lynch.
- or If you can't be bothered to learn how to invest, then blindly invest in the S&P index every month and ignore the market
I first got into investing in late 2000 based on a penny-stock tip from a friend. I'll bet you can guess how that turned out. With that lovely experience and the bursting of the dot com bubble I gave up and didn't think about stock investing for a long time. I tried to stuff away some money is "safe" mutual ...More