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jpla1991
Traffic Value: $773.5176 Portugal
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25/05/2017 11:21
Hi guys!

I'm looking to invest some money in a conservative way, preferably with dividends, and of course some interest. After some information, I really feel like index funds are what I'm looking for, for they are basically the same as buying shares from lots of companies.

Anyway, my question is regarding on the "how to" part. Do you guys know any broker, should I go to my bank, should I use google to find some local broker... Can anyone share some experiences, tips or even some links to tutorials?
dguy
Traffic Value: $15,993.01608 Canada
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25/05/2017 16:42
I think it is different for each country. Your bank is probably your best bet. If you go with a broker make sure they are well capitalized (same with your bank). If they are independent they might get into trouble if there is a market downturn, especially in your country so find out what guarantees are associated with your trading account. Make sure you read all the fine print on the account because some companies make you a creditor if they fail and thus they might keep a majority of your money if they get into trouble and go bankrupt.

If you are trading ETFs, then you probably want to trade the higher volume ones. Once again, in a market crisis (which we could be close to) the lower volume funds will get abandoned first by traders and that can leave you stuck if you are trying to cash out or move your money. Some could freeze up altogether is the money stops flowing in the markets. Usually the bid/ask spread is a good indicator. The wider it is the fewer are trading it and the more risky it is in a downturn

Also, be sure you know what stocks are moving each index. Some may have 100s of stocks in it but like the QQQ in the US, it is dominated by the top 5 or 10, so the diversification is narrower than it appears. That increases your risk

It has been so long since I studied ETFs and such so I couldn't point you to an educational sight but I suggest you look around and do a lot of research before you jump in. The lessons can be brutal if you just try to go in without any experience

Remember, trading will always be about one thing and one thing only. You. When you are playing with real money like that you will learn all about you own personal emotional makeup. You will learn about the worst parts of fear and greed that reside in your heart and many people can't handle what they find in there

Finally, a rule that has served me well over the years. If you can't sleep comfortably due to what you are holding in your trading account, then you probably shouldn't be holding it. A good night's sleep is usually one of your best trading indicators
gugakip
Traffic Value: $739.34329 Belgium
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25/05/2017 16:45
Hi Jpla,

great idea to diversify your portfolio! 

An index might be a good idea, or some kind of ETF. You have the high dividend paying ETF's, usually ~3% a year, with big companies in them. That's an option with quite low fees usually, <0.5% a year. A real fund can charge up to 2% every year, and that's quite a lot... So it might be a good idea to look into the costs before you invest. 

As for how to buy them: that depends. My bank charges quite some money for stock market transaction... $10 no matter what amount you buy. If you buy more than a certain amount, it becomes 0.1% of your invested amount. The same applies when you sell financial products... 

You could Google around for some good brokers. Make sure to fully verify they are real brokers and brokers with a good reputation (not buying/selling before their clients with their money to profit of the transactions of users). You can find some with lower fees than your bank probably. The only issue is trust, banks are usually backed up by the government (up to $100k in Europe) and that's not the case for every broker. But you can find some who are for sure!

Last but not least: try to make it a monthly/quarterly habbit to invest a certain amount. If it's really for the very long run, this is the best way to make money. Don't think: now stocks are high so I won't buy, but just keep buying. In the very long run, that's the best thing to do because you can't always predict the markets smile If I would think about something else, I'll edit/post again. Interesting question, and if someone knows a very low fee broker, please share it! grin 
jpla1991
Traffic Value: $773.5176 Portugal
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25/05/2017 16:54
Thanks so much for that dguy!

I know exactly what you mean with sleepless nights, I've been there before and I also tend to get stressed and do stupid actions while trading. Even here on our RP's market! That's why I'm only buying and holding, reinvesting the dividends, and waiting for the day where I can live just of dividends or sell some stocks/RP's and retire.

I'm not looking into trading. I'm just looking somewhere to invest and passively earn, but with an interest rate more appealing than the ones we usually find in banks. I understand that the risk is higher, but if we take a look at indexes such as the S&P500 and Nasdaq, we see that even after a big crisis, although it takes some time (even years maybe) they get back up again. That's what I'm looking for, something really passive, where I can reinvest each month some part of my savings that I can afford to lose.
jpla1991
Traffic Value: $773.5176 Portugal
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25/05/2017 17:24
Thanks for the input, gugakip! smile

I didn't want to go to my bank because I plan to move to another country in 5-6 years, and also because banks have "physical" points, they typically charge more to keep all of their bills. So maybe online banks or sites like Vanguard. I tried to create an account with them but it seems that is only for US citizens. Do you guys have any idea if simpler but legit platforms such as eToro are good for what I'm looking for?

I'm still very new at this, obviously and the learning is sometimes overwhelming
dguy
Traffic Value: $15,993.01608 Canada
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25/05/2017 17:26
Just realize central banks are heavily manipulating the markets with printed money and they could pull their support at any moment
gugakip
Traffic Value: $739.34329 Belgium
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25/05/2017 17:38
eToro won't be a good choice I think. As far as I know, rhey only offer CFD's, where you pay a fee every day. That's really for short term trading... for longer term you need something else I'm afraid.

Sadly, lots of good websites are American only, in Europe it's harder to find good sites... I know some Dutch brokers, but I don't think that's what you need. If I'd find something by coincidence, I'll let you know!
jpla1991
Traffic Value: $773.5176 Portugal
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25/05/2017 17:44
Yeah, I'll try to look around as well and will let you know in case I find something.

Maybe it would be easier to just buy BTC and be done with it eheh
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