Stocks or funds?

Stocks or Funds? I strongly prefer one over the other when it comes to investing my money

Stocks or funds? In this post I’ll talk about my self-professed finance-nerdiness, and why I prefer branch specific index funds over stocks.

I have to admit, I am a huge finance junkie. The same way some people go in and check facebook or instagram multiple (I really don’t want to give an estimate here for embarrassing reasons) times a day, I go in and check the stock market. I am perfectly content with peeking in without buying, the satisfaction comes from feeling up to date and “checking in”. As it is not hurting anyone, I have not tried to regulate this and thus let myself engulf freely in this little guilty pleasure.

A few posts ago, I talked about my investment strategy and mentioned both index funds and stocks as different investment options. As the above self-professed stock-market junkie I am, you would think that I am all about the stocks, options, warrants and all sorts of speedy hedgefund-y ways there are to up your capital out there.

In reality, this is not true. I am very much a vanilla-investor. I observe, and look, and wait, and maaaybe I’ll put in a little bit, just to check how it feels. And then some more. But I seldom buy stocks (relatively seldom, of course it happens).  I have a very realistic expectation of what I know and don’t know, and when it comes to stocks I just know too little about most underlying companies to make a potential investment more than a gamble. In addition, since the price of the stock is not really about the price of the company (just look at H&M nowdays) but what the market thinks of the price, I know even less.

Why I prefer index funds

What I do know, however, is the general status of the world. Almost as much as I like checking in on SP500 et alia I am constantly hooked in on the world news. And because of this, I prefer branch specific index funds. A fund, essentially a bundle of stocks with a common denominator like geographic area, industry (or a combination of them) is by this definition spreading the individual risk of each company out over many similar ones. I don’t have to know much about each individual company, but I do need to know about the collective status of their respective industry, for example.

love reading up on current events, and have been tracking world news since I was a kid (again, clearly one of the very cool ones growing up) so this suits me perfectly. There is a certain satisfaction in seeing the market in a specific industry unravel before you after a few indicative events. That is my medium. It also works really well because it is easy to hedge myself even more and step one macro level further out and go from very branch-specific to more global funds, and in this way  spread the risk even more, if I want to.

For now, I stick to my active obsessive stalking of the financial markets, and my branch specific index funds, and we will see how this works out for now. 

What is your take on this?

 

Freddie

How to save over 200 USD a month with 3 golden tips

How to save over 200 this month with these three tips

It is not always easy to cut down your costs  and save money when you have routines that you have had for years, perhaps since you were a child. However, these small routines are sometimes where you will find the easiest ways to cut down on your spending and save money. This month I have done 5 things that has cut down my costs significantly.

3 things I have done to cut down my costs and save money  over 200 dollar this month!

  1. I have biked everywhere. I normally bike every now and then but this month I have made a point of bringing the bike with me all the time. Great exercise!!!
  2. Mr Viking and I have dutifully implemented the One Simle Purchase Rule
  3. White month! As the Viking I am, I tend to drink alcohol every now and then, and Mr Viking and I very much enjoy a glass of red after a long day of work. Cut off alcohol completely this month and noticed two things: a) I am saving more money than I thought! A good bottle of wine pays up to ca 20 USD so lets say we have saved at least 40 bucks on this. b) My skin looks great! I want to continue with this.

These are things that has made me save in total more than 200 USD. 

In one year this is adding up to 2400 dollars. Insane. Tips: Write down right now what you would do if you were given 2400 dollars out of the blue right now. Keep this as a motivational note.

It is not on par with MrMoneyMustache  but everyone has to start somewhere and these are definitely three tips that anyone can follow. If you try it one single month, you will still save a lot of money.

Bitcoin, Ethereum and other cryptocurrencies

Crypto currencies bitcoin ethereum are they here to stay

Bitcoin and the legacy of cryptocurrencies

Five years ago I was convinced that Bitcoin, bearing the legacy of all cryptocurrencies, had reached its peak.  From here on it would silently fall into oblivion, sort of like those horrific 5-second snippets of music people used as their ringtone back in the 90s just because technology allowed for it. I will never be able to hear the first tones of Sugarbabes ’round round’ without a stressed peak in adrenaline, and a nervous glance at my phone. Anyway, I was convinced it was a done deal.

As we can see, these are clearly one of those wonderful far-sighted things I was completely on point with (please hear the Scandinavian irony here).

bitcoin price cryptocurrency development
Price of bitcoin in the past five years, picture from www.bitcoin.com

Bitcoin has rushed like nothing else in the past few months, and there are a few forerunners along with it like Ethereum that are making its way up too.

As a newbie-bitcoiner and a borderline-news-junkie  I am torn between what to think of these. This is definitely the high-risk part of The Leprechaun .

Yes side

Yes, I see the future of finance, the internet finally seeing its legacy being instantiated into something tangible and useful, outmaneuvering the big, bad, corporate banks and so on. Sure. 

No side

But I also see the fragility, the marketplace made for people that have reasons to want to not be traced (human traffickers, illegal exporters etc.) and heaps and heaps of sites with semi-legit (read fraudulent) dealers, shadow-sides that mirror real online markets where people send their money somewhere where they will never see them again.  All without the slightest legal chance of getting them back.

But still

Still, I am ending up on the yes side. I think that as the years are starting to add up, it speaks for the probability of cryptocurrencies being here to stay. As more and more people are using it, the legitimacy as well as its liquidity increases tenfold. In addition, I am a firm believer that technology capabilities like this (music ringtones being the exception) cannot every be banned, it will only increase its attraction. We are making this a “good” force to be reckoned with, but only as long as the masses keep latching on to it. This is mainly because the technology behind blockchain is genius and unprecedented in its its usability as a financial mechanism.

What do you think?

 

— Note that I am only expressing my own opinion and not speak in any professional capacity nor giving any financial advice.