How to avoid high fees when investing in stocks?

My experience with banks

I did my first stock trades in 2009 – used Swedbank and bought stocks in Baltic stock market. Later I also made couple of trades in US market, but was not happy about it. Paying $25-27 per each trade seemed too high. If I invest $1000 in one company and pay $50 in commissions to Swedbank, then I need to get at least 5% return just to cover trading fees. Not cool. Spent 250 EUR in fees.

fees

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First option trade: Herbalife

After I spent about 1 month opening a trading account in Norvik bank, on October 25th I finally bought my first options. I chose Herbalife PUT options with the longest term and with the lowest strike price that were available: $35 strike price, expire date: 2019-01-18

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Latvia’s ghost town Skrunda-1

Since Feb 2016 it is possible to legally walk around Skrunda-1 ghost town in exchange for 4 EUR entrance fee. It is a 2h drive from Riga, so I recommend to start early.

We climbed roofs and explored the abandoned buildings for 3h, but managed to see maybe 50%, so you can easily spend the whole day there. Take good shoes and be careful – I ripped my jacket on a nail, and there are broken glasses everywhere. Some photos below:

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How to invest in stocks and outperform fund managers?

If we look at things very simply, there are 3 main options, how to invest in stock market:

1. Select stocks yourself

You can create a stock portfolio of companies that you believe in and hope that these companies will grow and make you rich. But to get good results over the long-term, you will also need to spend lot of time learning about stock market. If you don’t have time and will pick stocks without doing any research, you risk getting burned.

For example – this is how GoPro stock chart looked like after IPO – price shot up 300% from $30 to $90 in just 3 months. Imagine, how high it could go in 2 years? Let’s say, you would have invested $990 and bought 11 GoPro shares in Oct 2014, paying $90 for each share.

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Mintos vs Twino – investing results after 2 months

Couple of months ago I wrote about peer to peer lending platforms in Latvia. After that I also decided to invest some money in them and came up with following strategy:

  1. No manual selection of specific loans, use Auto Invest feature to make investments automatically and avoid spending my time.
  2. Invest only in loans that have Buy Back guarantee.
  3. Even if Mintos and Twino have different returns for similar type of loans, invest in both of them to diversify and in worst case scenario loose only 50% of money in case one of these P2P platforms go bankrupt.
  4. Invest only in loans with the shortest term – 1 month – to get the best liquidity. So if I want to get back all my investment, it should take maximum 1 month for any remaining loans to be repaid, or in case – if some of them are paid late, then maximum another 1-2 months for the Buy back guarantee to pay back the late loans.

Continue reading Mintos vs Twino – investing results after 2 months