Investing

I am by no means a professional investor or an investing guru. However, I've learned a few lessons and made many mistakes since I started investing when I was 20.

1. Stop paying money to fund managers because they can't beat the market. Use index funds.
"I believe that 98 or 99 percent — maybe more than 99 percent — of people who invest should extensively diversify and not trade. That leads them to an index fund with very low costs." - Warren Buffet

2. Don't go "All in." If you play poker, you need to do this. But you're not gambling, you're investing. Most people, when they decide to invest, will do this:

Gee, I want to start buying mutual funds/stocks to make some money because everyone else is. Okay. Let's see... I have 3,000,000 won to invest. I'll just put it all in the stock market now. 30 days later. I invested 3,000,000 won but the stock market went down 20%. I guess I have to sell now. =(

I've seen this happen to so many people. Don't do this. Instead, invest 1,000,000 won and then wait. If the stock market goes down 10%, buy more. Down another 10%? Buy some more.

3. If you decide to buy a stock in a company instead of an index fund, tell me a story. Why are you buying this company? The PER (p/e) is low? You think the stock is cheap? The company has a bright future? It pays a huge dividend? Most people spend more time choosing a dress or suit than they spend researching a stock. Please do some research.

4. Diversify - I'm American, but I've owned or currently own Korean stocks, Canadian stocks, Hong Kong stocks, British stocks, etc. I also have cash in Korean won, U.S. dollars, and Chinese RMB. (I sold some Japanese Yen last month.) I would be happy if the U.S. dollar becomes weaker. =) A lot of Americans are hurting right now because of the sub-prime mortgage crisis. The value of their home has decreased. Their stocks have gone down and the U.S. dollar is weaker. A perfect storm. The situation for the average American citizen is similar to 1997 for the average Korean.

Here are my favorite investing websites:

Warren Buffet Watch - I want to know what he's doing at all times. Is he eating dinner? In the restroom?

IPO home - Every public company had to take their first step. My very first stock purchase was an ipo.

Gurus - What are the world's greatest investors doing? What are they buying and selling?

ETF Connect

Yahoo Finance - I can find some research and the stock price for every stock on every exchange in the world. =)

MSN money

Seeking Alpha - Investment news and opinion.

Fool.com - Investing opinion.

Jim Jubak - Stock picker