Want solid investing advice? Check out these subreddits

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If you’re still scratching your head and wondering how Reddit was the moving force behind the whole GameStop fiasco, you’re not alone. Before I get into all of that, though, let me take a step back and explain what Reddit is.

 

Reddit, unlike Facebook or Twitter, is a unique social media platform that focuses on content sharing and community. Reddit gives you the power to embrace anonymity while actively participating in multiple community forums or subreddits. A “subreddit” is a specific group of posts that are dedicated to one topic or theme, like investing. Within each subreddit, users can submit and create posts (images, questions, statements, etc.) and comment on said posts.

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Essentially, Reddit is a place many people go to for advice. Each subreddit listed below acts as a message board where users can share financial advice and offer tips on how to make the most out of your investing experience.

Related: Best Stocks to Buy

Overview of best investing subreddits

Subreddit Best Known for
r/investing Investing basics, investment advice
r/wallstreetbets Memes, harsh language, stock and option trading
r/stocks Stocks, stock picking, investing, trading, options, etc.
r/pennystocks Penny stocks
r/cryptocurrency Cryptocurrency
r/povertyfinance Financial advice, emergency resources, free financial literacy courses

 

Best investing subreddits

r/investing

 

With more than 2 million users and a catchy tagline (”Lose money with friends!”), r/investing is one of the largest and most frequented investing subreddits on Reddit. This group covers everything from general stock market questions to how to choose an online brokerage account to the coolest ETFs to buy in 2022.

This subreddit offers users the option to peruse additional resources, including an informative guide to stock research, finance-related podcast recommendations, and several reading lists, to help those who are less in the know find their way.

Related: Best ETFs of 2021

Claim to fame

In addition to providing useful information, r/investing gives Redditors a realistic look at what it means to break into the industry. Take that catchy tagline, for example. It’s not just a motto. In 2008, the stock market crashed and the country went into a great recession. Shortly after, r/investing was born. To “keep tradition” and to remind users that the “markets can carry risk,” modern moderators decided to leave the tagline as is.

In the past two years, r/investing’s membership soared. According to an unnamed r/investing moderator, during the height of the pandemic, the group received 2 million visitors per month. But, bigger isn’t necessarily better. In fact, that unnamed mod mentioned above says that the group has a history of shunning financial advisers. “The members would rather have anonymous advice than expert advice,” the mod said in an interview with IR Magazine.

In 2012, a user named “Jartek” (AKA Jaime Rogozinski) was run out of the r/investing group for advocating risky bets. So, he left and created the now infamous subreddit r/wallstreetbets. The two have been in a rivalry ever since.

When compared to its opponent, r/investing gravitates to a more conservative investment style. But that doesn’t mean the group is void of successful, newsworthy stories.

In 2020, Reddit user cookingboy took to r/investing to share a CNBC article that stated that Nikola’s $36,000 revenue was generated from one single solar panel installation. (Nikola is an electric vehicle company.) Apparently, the installation was for the company’s executive chairman and CEO Trevor Milton. At the time, the company was worth $15 billion, yet it hadn’t sold one vehicle.

Cookingboy clocked Milton on fraud nearly one month before it was officially reported, writing: “Can Nikola be the next Tesla? Never say never, especially in the year 2020. But my bet is that Trevor Milton is closer to Elizabeth Holmes than Elon Musk.”

In September, Milton resigned as the NKLA stock price plummeted.

By revealing the company’s fraudulent activity (and the volatility of its stock), this Reddit user saved would-be investors from losing their money.

Related: How to Buy Tesla Stock – Pay No Fee

Final thoughts

If you’re a beginner at-home day-trader, r/investing is a great place to start. This subreddit is filled with good advice, but as with any forum, you should use good judgment — not every user in this subreddit is an investing genius. If you’re into risky bets, however, you may want to join r/investing’s rival group, r/wallstreetbets.

r/wallstreetbets

With more than 1 million members (or as they like to call themselves, “degenerates”), r/wallstreetbets is the place for Redditors who aren’t afraid of a little shock value. How can a subreddit that covers stock and options trading be shocking, you ask? For starters, the language used in many of the posts has been described as “crude,” “profane,” and (my personal favorite), “colorful.”

This subreddit is also unique in that the members are anything but typical investors or traders. Many members in this group, as described by Business Insider digital culture writer Steven Asarch, enjoy “flipping off” hedge fund managers to go out and “make money for the little guy.” It’s a sweet sentiment, right?

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Claim to fame

The r/wallstreetbets subreddit was founded in 2012 by ex-r/investing member, Jaime Rogozinski. According to Insider, Rogzinski started the subreddit in hopes of creating a community where people could “talk about high-risk trades in an unapologetic way for people to make some short term money with disposable income.”

Things in r/wallstreetbets were pretty quiet for a while. According to subreddit stats, the group didn’t reach 100,000 until 2017.

In 2020, the subreddit (which had gained more than 1 million subscribers) had a mod uprising. A message posted on the WallStreetBets Discord says that Rogzinski was removed because he was found to be attempting to sell rights to the subreddit to a cut-rate trading team called ‘True Trading Group.'” During this tremulous time, the subreddit went private. He has since been banned from Reddit entirely.

By mid-pandemic, r/wallstreetbets was making waves. Several users were touting their newfound cash flow thanks to their investments in Tesla and other “YOLO” stocks.

On January 22, 2021, these young retail investors and traders initiated a short squeeze on GameStop (GME), pushing shares from $20 to $480. On January 27, the subreddit triggered yet another short squeeze on AMC Entertainment Holdings. During this time, r/wallstreetbets surged in popularity, gaining millions of new subscribers in just a few days. The group became so popular that even their idol Musk couldn’t resist tweeting about this new breed of misfit investors.

Final thoughts

By this point, you’re probably wondering “what’s the verdict here?” and it comes down to this: r/wallstreetbets is a great place for laughs, but new members should enter with caution. While there are some nuggets of useful information sprinkled throughout this subreddit, those who are newer to the game may have a difficult time deciphering meaningless chatter from discussion with real, money-making potential.

r/stocks

Three months following the inception of r/investing, r/stocks was born. This subreddit, which is now 3.4 million members strong, was designed with one topic in mind: Stocks. From pre-IPO news to geopolitical or corporate events indicating risks, r/stocks covers it all. There are just a few rules: no Robinhood posts whatsoever, and no posting about crypto, OTC, or penny stocks.

Similar to r/investing, r/stocks also provides a plethora of resources, including an in-depth and super-informative Wiki for new investors and an earnings calendar for members who like to keep a close eye on which publicly-traded company is earning the big bucks.

To reduce spammy content, r/stocks requires all members who’d like to submit a comment to have an account that’s three days old or older and 10 comment karma. (“Comment karma” reflects how much a specific user engages with the Reddit community. The higher the number, the better.) Those who’d like to submit a post of their own must have comment karma of 75 or higher. This subreddit also has a few limitations on crypto coin discussions and a strict “no penny stock discussions” rule.

Claim to fame

While r/stocks has been described as a “sleepy subreddit,” by pro r/wallstreetbets users, that doesn’t mean it isn’t worth the browse. In 2014, Reddit user artificer12 won big (more than 300%) with Inovio Pharmaceuticals, Inc.

Final thoughts

Whether you’re stuck in the research phase of investing or you’re just interested in learning more about stocks, r/stocks is a good starting place to go for information.

Related: The Top 5 Investment Strategies For Beginners

r/pennystocks

Although r/stocks prohibits penny stock chatter, there are other subreddits out there for ballers on a budget, like r/pennystocks. This subreddit, which was also created in 2008, has 1.8 million members (or “astronauts,” as they like to call themselves) and caters to those who not only want to learn more about penny stocks or micro-cap stocks but have the patience to do so.

A la r/stocks, r/pennystocks has a pretty strict meme policy. No memes or gain/loss posts unless it’s Saturday. All images posted must be penny-stock-related, no exceptions. Any talk of cryptocurrency is also off-limits.

To reduce spam and prevent invaluable content from sneaking its way in, this subreddit also requires individual posters to have post karma of 100 or higher and an account that’s 10 days or older. Those who’d like to comment must have 10 comment karma and an account that’s 10 days or older.

Claim to fame

Wall Street may “look down” on penny stocks, but according to Reddit, penny stocks are worth the gamble. According to InvestorPlace, if you spent $500 on a Reddit penny stock like HUMBL in October 2020, you’d be able to turn that initial investment of $500 into $3.4 million today.

This subreddit may not have the following that r/wallstreetbets has, but the group covers three times the number of stocks.

Final thoughts

If you’re new to trading and looking for an affordable way to break into the industry, penny stocks may be your way “in.”

Related: Best Penny Stock Apps

r/cryptocurrency

Created in 2013, r/cryptocurrency is described as the “leading community for cryptocurrency news, discussion, and analysis.” This subreddit boasts 4.2 million members and covers everything a newbie needs to know about crypto, sans maximalists, “our coin is best” users. This way, members can decide which coin is the best option for them and their financial situation and goals without bias.

To ensure the discussion stays as unbiased as possible, the moderators of r/cryptocurrency created (and regularly enforce) ban durations for Reddit users who refuse to follow the rules. The minimum ban duration starts at seven days and increases from there, depending on the specific violation.

In addition to providing members with an extensive list of rules, r/cryptocurrency also has a unique “Predictions” tab that gives the crypto-curious a look at a live, real-time prediction poll of how much the price of a specific cryptocurrency (there are 7,800) will move by a certain date. Once the date arrives, the poll is updated with the true results.

Claim to fame

This subreddit is hot, hot, hot for cryptocurrency memes, guerrilla reporting, and price speculation. The year that the group surpassed one million subscribers and its members were so excited, the subreddit offered subscribers the chance to win 1.5 million satoshis. It currently has more than 4 million subscribers, illustrating just how hot crypto is in today’s day and age.

One thing that’s unique about r/cryptocurrency is that this subreddit rewards users with “Moons.” In December of 2020, one Redditor sold his Moons for Bitcoin. He’s now $24,000 richer. “I have literally made $24k from memes and sh*tposting,” cryptorich13 writes.

Final thoughts

Even if you’re not into crypto, this subreddit is a great way to get your feet wet and introduce yourself to the vocabulary.

Related: A Beginner’s Guide to Cryptocurrency

r/povertyfinance

Before you can learn to invest, you first have to learn how to budget and save. The subreddit r/povertyfinance is a non-judgemental place for the “financially challenged.” It offers financial advice, tips on living frugally, financial opportunities, success stories, and general guidance.

Although this subreddit has fewer members (961K) than the other subreddits on this list, it’s still packed with useful information and educational tools. Its Wiki page, for example, offers a step-by-step guide for those who are living in poverty. The guide begins with “Survival,” providing users with food, housing, health, and clothing resources, and ends with “Self-Actualization/Purpose,” offering several ways users can feel like a contributing member of society (a.k.a. a valued human being with purpose) again.

In addition to providing members with resources and information on what to do in case of an emergency (i.e. food resources, mental health resources, etc.), r/povertyfinance also links to free online courses in financial literacy, courtesy of McGill Personal Finance.

Claim to fame

When it comes to money, budgeting is usually the first skill you need to achieve before you can level up to savvy saver. But budgeting isn’t exactly the easiest thing to do, especially if you’re trying to get an education or raise a family (or both) while working a full-time or part-time job. Luckily, this subreddit has many success stories to keep you motivated.

These threads may not be filled with billionaire advice or fancy percentages, but they are loaded with hope — and that’s priceless. From Redditors commiserating about the state of inflation to posts like the one from u/NotSoSnark about how pride about food stamps shouldn’t get in the way of you eating, there is a lot of community to be found in this subreddit.

Final thoughts

If you’re interested in investing but are struggling financially, this subreddit may help you set and achieve your financial goals. I mean, you’ve got to start somewhere, right?

Summary of the best investing subreddits

Subreddit Founded Members Discussion focus
r/investing 2008 2m Investment advice
r/wallstreetbets 2012 11.4m Stock and option trading
r/stocks 2008 3.4m Stocks
r/pennystocks 2008 1.8m Penny stocks
r/cryptocurrency 2013 4.2m Cryptocurrency
r/povertyfinance 2018 961k Frugal financial advice

FAQs

What does DD mean in stocks?

Does Reddit have a stock?

Is Reddit safe?

How to use Reddit for investing

Reddit is like a double-edged sword. While it’s filled with informational subreddits and interesting communities that can help you figure out the best investing strategy for you and your financial situation, Reddit also has a darker side where trolls, scammers, and spammers lurk as they wait to catch their next naive user.

As long as you approach Reddit as a social networking site, you should be in the clear. This means avoiding shady users, refraining from feeding the trolls, and thoroughly vetting anyone you choose to have a conversation with.

Here are a few more tips to help you navigate Reddit like a pro:

  • Optimize your searches. Reddit describes itself as the “front page of the internet.” This is because Reddit is loaded with information on thousands, if not millions, of topics. Click the “advanced search guide” to narrow your search results.

  • Improve your view. If you’re on Reddit for information and information alone, add “.compress” after any URL to view a simpler, no-frills version of the site.

  • Don’t forget to subscribe to your favorite subreddits. Reddit allows users to tailor their homepage with the content that they want to see. So, whenever you subscribe to a subreddit, Reddit will ensure that the threads from those subreddits are easily accessible from your homepage.

The bottom line

Wall Street Bets used Reddit to turn the investing world on its head, and it worked! But that doesn’t mean Reddit is the be-all-end-all. When it comes to investing, research is key.

Each subreddit listed in this article (and any other investing-related subreddits you choose to follow) should be seen as an additional resource in your research arsenal.

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This article originally appeared on JoyWallet.com and was syndicated by MediaFeed.org.

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15 investing myths you should forget right now

 

Investing money might help you grow your wealth, but it can be a scary concept for some. According to a recent FinanceBuzz survey on investing habits, nearly three in 10 Americans haven’t started investing yet.

There are many reasons that stop us from investing. Unfortunately, some of these reasons are actually old investing myths. But putting off investing may be one of the most significant money mistakes you can make.

To help more people start investing and making smart money moves, we’re going to present 15 investing myths, explain why they’re outdated and how they could be costing you money.

 

CentralITAlliance / istockphoto

 

FianceBuzz’s survey found 62% of people believe you should have $1,000 or more to open an investment account. A couple of decades ago, some mutual funds required a minimum initial investment of thousands of dollars.

But this widely believed myth that you need lots of money to start investing simply isn’t true. Today, investing apps have changed how we invest, and many traditional brokerage firms allow you to begin investing with very little money. You can even get started in investing with as little as $1 if you buy fractional shares.

 

DepositPhotos.com

 

It’s a common belief that a bank account is the best place for your short-term investments. The money is usually insured up to at least $250,000 thanks to Federal Deposit Insurance Corp. insurance and at least won’t decrease in value.

Unfortunately, bank accounts typically have awful interest rates. If you want to get decent earnings on your money, other options exist. For instance, certificates of deposit and money market deposit accounts are also normally FDIC insured and may offer higher interest rates.

 

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If you’ve ever tried to watch an investing show on TV, you’ll know that these strategists often talk about very detailed concepts and strategies in an attempt to eke out higher returns. Thankfully, everyday investors don’t need that level of complication in their investing lives.

Some of the best investing apps just have you fill out a questionnaire about your goals, risk tolerance, and other relevant financial information. Based on this, they suggest a portfolio of investments that fits your needs. They can even automate your investing in that portfolio so you can regularly and easily add more money.

Although you don’t want to blindly follow the advice of an investing app (or a human, for that matter), these services can take care of some of the more complicated work for you.

 

SIphotography / istockphoto

 

It’s easy to think stocks are the only option to invest in. You constantly hear about the stock market reaching new all-time highs or dropping by a few percent in the media. The press doesn’t tend to cover other investments as much.

But stocks are only a tiny part of investing. You can invest in many other types of assets, including real estate, cryptocurrency, collectibles, artwork, precious metals, and more. For example, Masterworks helps you invest in fine artwork that you likely couldn’t otherwise afford to own.

 

DepositPhotos.com

 

The traditional idea of investing makes it sound like it would take up a lot of your time. You have to research investments, read a company’s public financial reports, and keep track of the news that could impact stock prices. And you have to do that for everything you invest in, right?

Thankfully, the answer is no. You can earn decent returns throughout long periods in other ways. For example, you could easily diversify your assets just by investing in index funds.

Index funds often have diverse holdings, which means they spread out the risk over multiple companies rather than concentrating your risk in one or two. You won’t typically see as high a return as you might with an individual stock, but you also won’t have to spend as much time managing the investments and expose yourself to less risk of losing money too.

 

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Investing used to be expensive. You had to pay brokers to make stock trades for you and there were a lot of other potential fees as well. But things have changed over the past couple decades.

Now, there are investing apps that offer fee-free trades. And even some of the major investing powerhouses that have been around for decades have started offering commission-free trades.

If you want to invest in a more diversified investment, such as a mutual fund, some companies even offer no-fee investments. In particular, Fidelity offers four mutual funds that have 0% expense ratios and no minimum initial investment.

 

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If you work at a company that offers a 401(k) plan, it’s easy to think a 401(k) is the only account you’ll need for retirement. Although that may work out in some cases, you may be better off having more than just a 401(k).

You might also consider opening an individual retirement account (IRA). You could also open a taxable investment account. These accounts may work better for you than a 401(k) because you choose where you open them. That means you get to pick where and what you invest in rather than having a 401(k) plan force you into a limited set of options that may come with high expenses.

 

designer491 / istockphoto

 

When you research investments, you’ll likely see a section detailing the investment’s past performance. And although that may sound good, the truth is it isn’t an indicator of the investment’s future performance.

No one has a crystal ball. What happened yesterday may have nothing to do with what happens tomorrow. For instance, a company with a stellar performance record before a recession may go bankrupt when a recession hits.

Past performance is something you should consider, but know that it doesn’t promise any given returns in the future. Instead, focus on the fundamentals of a company or investment.

 

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When you see your investments taking wild swings from day to day, it’s easy to get worried. You may think that selling your assets today and waiting until the market calms down will protect you from the storm. Unfortunately, that may not work out.

Volatile markets can have wild swings both up and down. If you sell once investments have started to dip, you could miss out when markets begin their recovery. The best days in the market often come after the worst days. If you don’t reinvest at the perfect time, you may miss out on these fantastic opportunities. This could dramatically reduce your investing returns.

smart money move to make in a volatile market could be holding a diversified portfolio for the long term so the wild swings even out over time.

 

Khosrork / istockphoto

 

Gold is an investment that many people have misconceptions about, including the idea that it’s the best investment. Historically, gold may have a good track record. But what happens if a gold mining company finds a massive supply of new gold? If the supply exceeds the demand, gold prices could plummet.

When you invest in only one thing, such as gold, you open yourself to huge risks. Other assets may outperform gold and provide better overall returns if gold performs poorly for an extended period. It’s generally smart to invest in a diversified manner rather than putting all your money into one investment.

 

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Bonds, which is a fancy name for debt, are normally viewed as a stable source of investment returns and retirement income. Many investment experts recommend slowly switching from stocks to bonds as you get older.

Unfortunately, the broader economic picture has made this strategy less certain. The price of bonds increases when interest rates drop. Interest rates have been falling for decades but may start rising in the future. When this happens, the price of bonds may decrease.

Instead of blindly following a rule of thumb, consider why you want to own bonds. If your reasoning aligns with the investment and its risks in the current environment, consider adding bonds to your portfolio.

 

designer491/ istockphoto

 

Buying shares of big-name companies — such as Google, AmazonApple, and Facebook — can be viewed as some of the best ways to invest by new investors. These stocks have all had meteoric rises in their prices from when they first debuted on the market.

But big companies aren’t always a good investment. Although they may have had reliable performances in the past, their futures may hold risks that result in lower returns. Some behemoth companies even end up going out of business, such as Toys R Us and Circuit City.

Large companies aren’t always able to adapt to changing times. If they can’t, your investment in them may lose value. Instead, it may be wiser to invest in a diversified portfolio of companies of different sizes.

 

nortonrsx

 

When you look at the long-term historical returns of the stock market as a whole, the market appears to provide reasonable returns. If you only look at this long-term trend, it’s easy to think you face no risk when investing. That isn’t the case.

You always face risks when you invest, even when you invest in the most simple and boring investments. If you suddenly need your money, you may have to sell when an investment’s price has decreased. This means you don’t get the advantage of the long-term historical returns because you had to take the money out of the market early.

If you’re nervous about the risk of investing, that’s a good thing. It forces you to educate yourself and find ways to decrease your risks while still meeting your financial goals. If you’re still too nervous about investing, talking to a fee-only fiduciary financial advisor may help.

 

DepositPhotos.com

 

According to FinanceBuzz’s survey, one of the top-cited reasons Americans aren’t investing is that they’re afraid of losing money. Investing is risky, as we just discussed, but the degree of risk depends on what you invest in and how long you plan to stay invested.

Some investments are incredibly safe, such as certificates of deposit, money market accounts, and U.S. Treasurys. And even some riskier investments have historically provided positive long-term returns as long as you stay invested and invest in a diversified manner.

Taking a risk tolerance assessment may help you decide on the best path for you. Based on the evaluation results, you’ll be able to craft an investment plan that allows you to take the risks that fall within your comfort level. These sorts of assessments are often part of signing up for an investing app or opening a brokerage account.

The bottom line is that If you don’t take any chances, you reduce your potential returns. This may be disastrous, especially if the cost of living increases over time and the money that’s just sitting in your savings account can’t keep up with those costs.

 

DepositPhotos.com

 

You’ve probably heard the saying “The best time to plant a tree was 50 years ago. The next best time to plant a tree is today.” Investing works the same way.

In an ideal world, people would start investing early in life to take advantage of compounding returns. But even if you didn’t start early, the next best time to start investing is today. If you start investing now, you’ll have more time to watch your investments grow than if you start next year.

Consider using an investing app to simplify the process of starting to invest while still meeting your goals and current financial situation. Once you’re more comfortable, you can research more investment providers in detail and move your money at that time if that feels like a good fit.

 

Ridofranz / istockphoto

 

Investing myths are commonplace in our society because people haven’t taken the time to research the facts. And, quite frankly, investing can be an overwhelming topic to research on your own. But now that you’re aware of why these investing myths aren’t a reality, you can share this knowledge with your friends and family.

More importantly, you can quit using these myths as a reason to put off investing. It’s easier than ever to start because now you know that you can start investing with just the change you have in your pocket.

 

Read more:

 

This article originally appeared on FinanceBuzz.com and was syndicated by MediaFeed.org.

 

gradyreese

 

Featured Image Credit: insta_photos/istock.

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