Investing as a hobby

[SunnyOne]

Over the decades, I studied and absorbed enough information on the topics of personal finance and investing to enable financial independence and retirement before FRA.

I am familiar with the well known names in the field, have read their books etc....ok all that said, I finally have time to indulge in something that has long intrigued me: the markets as a hobby, not too dissimilar from my new found passion for learning how to play poker.

I have set aside a sum of money I can afford to lose, although I hope not to of course, lol.

I would greatly appreciate any suggestions for strategies to begin learning, obviously starting with anything not too sophisticated.

I am open to any types of assets as long as I'm not managing any real estate LOL.

thank you.

 

[2k6_TX_Dad]

following...

This is also interesting as a hobby for me.

All this buy and hold that got us to FI, was kinda boring.

I've got places to make free trades.

 

[Sunset]

It's not a hobby, it's a requirement to invest if a person wants to live on something other than SS when they retire.

Most of ours sits in various ETF's , and now and then I make other purchases/sales in stocks or options.

I'm thinking of simplifying and just hold in the various ETF's as it's easier, and I don't seem to do any better than simply holding. Boring could be better

 

[ExFlyBoy5]

It's not a hobby, it's a requirement to invest if a person wants to live on something other than SS when they retire.

Most of ours sits in various ETF's , and now and then I make other purchases/sales in stocks or options.

I'm thinking of simplifying and just hold in the various ETF's as it's easier, and I don't seem to do any better than simply holding. Boring could be better

It's not a hobby for YOU.

I am curious as well. Not saying I would want to do this as a hobby but just curious as to what members might recommend.

 

[young-ish]

I would start with the uncovered rocks. Whatever no one else is talking about & sounds the least sexy is an opportunity. If you have the time & smarts you could generate high ROI.
Not sure I’d call this a hobby but more of a part time job.

 

[PointBreeze]

I have wanted to do this as a hobby as well, so look forward to the suggestions.

 

[target2019]

Over the decades, I studied and absorbed enough information on the topics of personal finance and investing to enable financial independence and retirement before FRA.

I am familiar with the well known names in the field, have read their books etc....ok all that said, I finally have time to indulge in something that has long intrigued me: the markets as a hobby, not too dissimilar from my new found passion for learning how to play poker.

I have set aside a sum of money I can afford to lose, although I hope not to of course, lol.

I would greatly appreciate any suggestions for strategies to begin learning, obviously starting with anything not too sophisticated.

I am open to any types of assets as long as I'm not managing any real estate LOL.

thank you.

Well, I wouldn't call it a hobby. I want a return on our investments.

We have .85(x) invested in core index funds (A). We have .15x(x) invested in a brokerage (B) which serves several purposes. We use (B) to fund certain bills. We also use (B) for speculation (and humility). The prime mandate is to use critical thinking to make more money. Next we try to minimize taxes. Finally, I realize it gets inherited, and I want someone to say "I understand why he bought this and that."

1) You could pick a company from a specific sector that you think will outperform the rest.
2) You could learn about qualified dividends.
3) You could learn options.
4) You could invest more in a company you feel is under valued and will take over in the future (AMZN)

An investment policy statement is beneficial, I feel.

 

[ERhoosier]

Although I confess to buying some individual stocks, the vast bulk of my equity (stock) asset allocation (AA) is in index funds. The cold reality is that the majority of PROFESSIONAL money managers FAIL to beat the broad stock market over time, and investing as a "hobby" is highly unlikely to do better. IMHO- If you view investing as entertainment, might as well go to casinos and play your poker.


If you have not yet decided on an appropriate AA for your risk tolerance, you might want to do a web search on "lazy portfolios" (set it and forget it approach).

Here's a place to start:
https://www.bogleheads.org/wiki/Lazy_portfolios

 

[arbeadub]

My play money is in my TIRA and ROTH since I always expect to see outsized gains and would prefer a tax advantaged account, of course any losses cant be harvested either. Anyway my current bet is LMT, I already have sell limit order set

 

[matjung]

Over the decades, I studied and absorbed enough information on the topics of personal finance and investing to enable financial independence and retirement before FRA.

I am familiar with the well known names in the field, have read their books etc....ok all that said, I finally have time to indulge in something that has long intrigued me: the markets as a hobby, not too dissimilar from my new found passion for learning how to play poker.

I have set aside a sum of money I can afford to lose, although I hope not to of course, lol.

I would greatly appreciate any suggestions for strategies to begin learning, obviously starting with anything not too sophisticated.

I am open to any types of assets as long as I'm not managing any real estate LOL.

thank you.

I could be wrong, but I guess you already learned more about finance then the people who work as fund managers.
The best kept secret about all strategies is to change the strategy before the other market participants are doing it.


A lot of people learned in the last 4 weeks "get out of techstocks".
That wisdom is coming four months too late.


If you had to come up with a definition for investment strategy.
What would that be?

 

[VanWinkle]

Look at the biggest losers, and then determine why it is out of favor. Look at the stocks that everyone else hates-for now. You want to find something that is beat down by sentiment only, with decent financials and at least some type of moat(ability to stave off competition due to an advantage). Many times this leaves zero stocks to buy, but patience is the key to buying good stocks for a fair price(or lower). Practice first with Morningstar portfolio of your picks and see if you method is bringing good results over a 1 year period. Decide how long to keep winners, and how soon to cut losers.

Is this sounding more like a job yet?

Not an expert, just a guy on the internet....

VW

 

[kcowan]

Define a play money amount that you are ok with losing and then have some fun with it.

 

[NW-Bound]

There are only a few ways to invest by indexing.

On the other hand, there are a myriad of active investing styles.

Being an active investor myself, having no broad index funds and only individual stocks and sector ETFs in my portfolio, I will say that you have to choose your own poison. Start out small first.

PS. I just remember that I have about 1% of portfolio in BND, just so that it shows up on my screen for me to keep an eye on it.

 

[Car-Guy]

I finally have time to indulge in something that has long intrigued me: the markets as a hobby, not too dissimilar from my new found passion for learning how to play poker.

I have set aside a sum of money I can afford to lose, although I hope not to of course, lol.

I don't consider this investing, but it's a swing trading hobby for me... (Investing is in another bucket of funds and not a hobby) I play when I feel like it and set it aside for days or weeks at a time when I don't... Last year was pretty good and easy. The last two weeks has been a wild ride and not for the faint of heart. I have a number of (about 10) individual stocks that I follow (you'd know them all if I named them) and some rules I try to follow. Trade in "chunks" of 50 to 100k per stock. Sometimes I'll double that and I'll usually only hold a few hours or a few days. Sometimes less...

"To me", it's a lot like playing poker or blackjack, and sometimes roulette except slower and it's not an all or nothing proposition per play.

 

[Lsbcal]

If I were looking for some stock ideas, I'd go to the ARK site and they have a list of their portfolios holdings plus other white papers. Then pick some "innovation" company that has been beaten down a lot. Hold for quite awhile, maybe years. This will not then be the in/out trader method so not very active. Could be exciting gains (or losses).

The growth stocks with light to no earnings have been creamed in 2021 and continue to go down in 2022. Just look at ARKK as an etf example. I don't know where the bottom is but there are probably babies in the bathwater.

P.S. this is not my methodology but I do own one growthy stock in the ARKK portfolio at present

 

[athena53]

If I were looking for some stock ideas, I'd go to the ARK site and they have a list of their portfolios holdings plus other white papers. Then pick some "innovation" company that has been beaten down a lot. Hold for quite awhile, maybe years. This will not then be the in/out trader method so not very active. Could be exciting gains (or losses).

This is similar to a tactic I've used on occasion-look at the quarterly report of a fund that's been performing well and see what stocks they're holding. Very important to note that these MAY be obsolete- they could have sold or reduced their holdings in the stock after the date of the report. I just bought LSI, an REIT that manages storage facilities, based on that and some additional research (and the fact that my neighbor who owns storage facilities drives a BMW and owns an expensive motorcycle and goes to FL every winter ).

If I had it to do over again I'd do a mix of ETFs and some individual stocks. I'm gradually moving in that direction.

And yes, it feels like a hobby to me. I have no use for Vegas-style gambling but I enjoy being in the market and it's done well for me.

 

[W2R]

A hobby? I can't *even* imagine.

Different strokes for different folks, I suppose, but I'd rather eat worms. If I want to gamble, I can always go to one of our local casinos. Haven't done that for almost two decades.

 

[kgtest]

AAPL. Not very exciting...unless you like incredible returns. 20% of the portfolio. DO it, you will like it and thank me later.

AAPL Returns over the past decade: 1000%
Nasdaq Returns over the past decade: 425%

What a fun hobby. Plus you can buy an iPhone and have even more fun with this hobby.

 

[SunnyOne]

I apologize if my original post was not clear. I am not referring to my portfolio. I was referring to a small kitty I have set aside for entertainment and learning purposes. I wouldn't dream of telling other people not to hunt, fish, shop for art, join a dining out group etc....so this is mine, along that vein.

 

[Lsbcal]

If you look up Cathie Wood on Twitter she has a link to her PDF file on innovation technologies. This is about general tech that is emerging like self driving cars. I don’t think she discusses stock picks there. But her website has the current portfolios.

If you are looking for growth stocks that are just possible home runs, might be a place to start.

 

[Drewjd]

I play around with individual stocks in a small percentage of my portfolio as well. I don't know if I would have been better off just investing in an Index 500 fund, but I've definitely made a healthy profit overall. I'll give you a few random thoughts since you're just starting out:

1. Feel free to buy tiny amounts of 5-10 stocks. This isn't like the old days where you had to pay a commission per trade. Most trading platforms are commission free now (I use ETrade). I find that I follow stocks and research them better if I buy more companies, rather than just 1-2. i.e., I learn more when I buy a into a higher number of companies.


2. I really like using "trailing stop" orders to limit my losses / hold onto gains. Research it to learn the details, but basically the sales price follows the stock price upwards. That way you can continue to enjoy any gains but then the stock will sell if it drops too much.


3. While increasing stock prices get all the press, there are a lot of stocks that consistently pay nice dividends. They're typically large companies so the stock price may not jump up as much, but they also don't drop as much either. For example, I just bought some AT&T (T) stock, which currently has an 8% dividend yield. AT&T has a long history of paying consistent dividends and the stock price is pretty consistent. Dividends probably won't interest you if you're using play money, but another type of stock to consider.

 

[Flyfish1]

My father in law did a similar thing when he retired. I remember he was using TD's Think or Swim platform and took some option trading course. I have no idea if he did ok or not, but it was play money for him and kept him busy.

Tons of day trading and option courses out there if that interests you.

 

[BeachOrCity]

I think you need to define it more, and probably only by trying it out will you find out what you want to do.
Trading (day) is completely different than picking individual stocks. For individual stocks I think for the type of stuff in arkk fund mentioned above you need a basket as it’s very hard to pick the winners.

Right now I am very focused on value in the energy sector. Despite gains last year still beaten down on relative basis.

Seeking alpha can be a good source of info. And surprisingly Twitter has a ton of info if you know how to use it.

But here is the most important part. If you are going to do this as a hobby and not put a lot of time into it, keep the money hobby sized as well. If you are going to go big, it needs to be a job, and a job that you spend the time to be good at.

There are tons of people out there with opinions, who are pumping or talking their book or just filling airtime on cnbc. Only by doing your own due diligence initially and ongoing can you make good decisions.

 

[Montecfo]

I own a few Cathie Wood stocks. I do think that rummaging through her portfolio is not a bad idea, either for hobby investing or to "season" a more conservative portfolio with some risk assets.

You probably want to put together a small portfolio of them since results can be expected to vary widely.

One could also first consider the SARK ETF which is seeking to return the inverse of Woods's ARK innovation fund, as that is up 16 pct YTD.

Different strokes.

 

[lawman]

I tried trading stocks for a hobby once but it did not work out too well for me.. I tried to buy low and sell high.. I gave that up and invested my remaining balance in Enron..