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What is the best way to learn investing, portfolios, stocks, options, futures, etc.? (lemmy.ml)

submitted 4 days ago by linucs@lemmy.ml to c/asklemmy@lemmy.ml

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publication croisée depuis : https://lemmy.ml/post/33592361

I need to make my money work but I don't have enough knowledge about the topic to do smart things with it, but I love studying and learning new things.

What would you recommend to learn how to administer money in the best way possible?

I found a 2008 edition of the Finance Theory I [1] course on MIT OpenCourseWare , would it make sense to learn from there?

For context I studied computer science with a focus on artificial intelligence, machine learning and data science.

Also context, I am in the EU (Italy).

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[–] A_Wild_Zeus_Chase@lemmy.world 5 points 4 days ago* (last edited 3 days ago)

Thankfully there’s now an easy way to maximize your return/risk ratio: Exchange Traded Funds (ETFs).

Before ETFs you had two options: choose individual stocks and risk choosing wrong, or pay a financial consultant outrageous fees to do it for you.

ETFs allows you to track the market, which over time only goes up, minimizing your risk. They also (usually) charge very low fees, which increases your returns.

If you are interested in US equities, VOO, which tracks the S&P 500, has a gross expense ratio (ie how much you pay them) of .03%. Considering how 20 years ago you might have paid a financial advisor 3%, it’s literally 100th of the cost. QQQM, which tracks the NASDAQ has a GER of .15%, is also good.

As an Italian, you might also be interested in an EWI, which tracks Italian stock performance, and has actually done pretty well the last year. However it has GER of .50%, so you’ll be paying a bit more. I’m not sure if you have access to different products there, so might be something to look in to. European stocks have done pretty well of late, so you may also want to look into ETFs for other countries (DAX for Germany, EWP for Spain, EWQ for France, etc). Finally you may want to consider emerging markets, like EMXC for China.

Again you may have access to different products, I’m not sure how that works, but basically any ETF which tracks a developed or high growth emerging market country would be good to add to your portfolio, and you should prioritize those with low GER to maximize your returns.

Lastly, I would STRONGLY encourage you to not even look into things like options, futures, shorting etc. Your focus as a retail investor should be to maximize your return to risk ratio.

If the market dips 10%, and you’ve put in 10k, it’s sad to see 1k “go away” but if you wait a few more days/weeks/months and just not sell and realize that loss, it has literally always bounces back (unlike an individual company), and you suffer no negative effects.

But futures, options and shorts, while potentially more rewarding, have outcomes where you can get really fucked, have to pay everything you have and more, and be left with nothing. It’s just not worth it IMO.