Investment Virgin

[itsbob]

So my time frame is a little off. But I know that the money I put into a Vanguard S&P 500 Index Fund 4 or 5 years ago has just now recovered to its original investment value. I would have been much farther ahead buying CD's at the time. And I am currently considering cashing out and moving it into CD's.
.

Vanguard is a VERY good mutual fund company.. The secret is to either put your money in there and forget about it until you are about 4 or 5 years from retirement, or put monthly installments in there and forget about it until the same time frame.

In the end it's your money, do what you feel most comfortable with, but I have a lot of faith in Vanguard..

 

[BadGirl]

So my question is, where should I start? Any insight would be very helpful. Mutual funds, stocks/bonds, IRAs...it's all confusing to an investement virgin. Please help!

If you're still working with the same company, you just did really well with the IPO from a couple of weeks ago, providing that you took advantage of purchasing stock beforehand.

Reminds me....I need to go and check my progress. :rubbinghandstogether:

 

[FromTexas]

I'm interested in investing but I have absolutely no clue where to start. The extent of my investing experience is my 401K account at work. Obviously, my goal is to be rich before I hit the grave. And when the time comes, I also want to ensure that my daughter will be able to attend college.

So my question is, where should I start? Any insight would be very helpful. Mutual funds, stocks/bonds, IRAs...it's all confusing to an investement virgin. Please help!

1st - max out your 401k.
2nd - figure out if you can benefit from the addition of a ROTH IRA
3rd - Don't play in stocks without the experience. Stick with mutual funds. Both 2 and 3 can be discussed with a reasonable investment advisor. I would recommend Edward Jones. They should have a representative near you. If you have USAA, use them instead. Just call their investment group up and say you need help starting investments in mutual funds. They can also help you with number 2.

 

[FromTexas]

Good mutual fund companies:

1) American Funds
2) Vanguard
3) Fidelity
4) USAA

Don't go near Putnam. Don't depend on Morning Star ratings.

 

[itsbob]

If you're still working with the same company, you just did really well with the IPO from a couple of weeks ago, providing that you took advantage of purchasing stock beforehand.

Reminds me....I need to go and check my progress. :rubbinghandstogether:

You think you may have broken that magic number this month??

 

[BadGirl]

You think you may have broken that magic number this month??

Oh, no doubt about it! I'm thinking I far exceeded my goal for this month. I'll check on my status tomorrow.

 

[willie]

"playing" the stock market should be just that....Playing with disposable funds.

Investing into a good no load mutual fund from Fidelity, T. Rowe Price or Vanguard using dollar cost averaging will accomplish what you want.

Subscribe to Money magazine. It has charts that show performance of hundreds of funds but I would only be concerned with the aforementioned company's. A 10 year history of good performance with plus digits for the year 2002 is important.

After you choose a good fund with a good history, use dollar cost averaging without a break. That is, invest at regular intervals (monthly) whether the stock is up or down. This is a proven system that smooths it out when your initial purchase was at a high mark.

Forget the whole thing if you have not got the nerve to stay in this for the long haul. CD's and Money Market instruments are for the short haul.

 

[Chain729]

A lot of good advice in here.

My suggestion- which has been stated- is learn as much about investing as you can before you start and think out what you do. What works one person, may not work for you. Unless you know every nitty-gritty detail that they know, you're still shooting at a dart board. And unless you invest and pull out exactly what and when they do, you won't get the same results.

Example 1: Someone suggested getting financial advice. That's not profitable for me. With a live-in GF that has two kids, a third on the way, a newly purchased money-pit (house), and my low salary (23 w/o a degree), it would take forever to get the advice fees back with my investment.

However, I'm not looking to get rich. I'm just looking to get a better ROI over the next several years than I presently do with CD's, bonds and MMA's; and not pay a fortune for commission (enter sharebuilder). So, for me, with all things considered, index ETF's are my friends. Again, simply opinion, I prefer "market" indexes to "sector" indexes (enter S&P 500, EAFA, etc. index funds).

Example 2: Until I bought the house I never bought stock, funds, or bonds. I always picked up CD's and had an MMA (money-market account).

Why? Because it wasn't worth it. I planned on buying a house in a few years as well as paying for my education, so I couldn't afford the risk. Now that dream's a reality (with cash left over) I can look at longer term and potentially more profitable investments.

But, like I said, take my approach for what its worth... Nothing unless you look, learn, think and understand for yourself. And when you do, you'll understand that the hardest thing isn't all the mumbo-jumbo financial stuff (which most of it is trivial anyway); but actually having the discipline to save and consistently contribute money.

 

[itsbob]

If you don't know what you are doing, you will have better luck buying CD's and such. Learning to invest is very expensive. Good, reliable advice is expensive. You get what you pay for. If you are trying to save for college there are better ways than costly investment mistakes.

16.3 16.9 and 27.5% in the last twelve months for the three funds I'm in.. How's those CD's doing??

 

[Oz]

16.3 16.9 and 27.5% in the last twelve months for the three funds I'm in.. How's those CD's doing??

After the last 5 years of investment carnage, it's nice to brag about the stock market again.

 

[itsbob]

After the last 5 years of investment carnage, it's nice to brag about the stock market again.

It's the law of averages.. Over the last 5 years all three have gained close to 10%, and if you're like most investors putting dollars away every month the market taking a nose dive every now and then is actually beneficial.. while it's down you are buying more shares every month, and when the market recovers you've mad considerably more money,

FOr example.. making 5% every year is not as good as a fund that would average 5%.. including years where the fund would lose 30% and years where it would gain 30%..

Dollar Cost Averaging is a good thing for the "poor man investor"

 

[czygvtwkr]

Jim Cramer is the man to pay attention to, he tells you things that nobody else will.

He wrote a book called "Real Money, Sane investing in an Insane World" that is the shiat.

He also has a nightly show on CNBC called Mad Money. Learning from him (not blindly listening to peoples hot stock tips) has doubled my investment portfolio in a year.

Also an excellent mutual fund is the Franklin Income Fund. Yes it is bond heavy but it has excellent returns and in the down years it only looses 1-2% and the up years it gains 10-12%. The 10 year return for it averages out better than 95% of the funds out there.

I am still a believer in index funds too like VTI and DVY.

 

[itsbob]

Jim Cramer is the man to pay attention to, he tells you things that nobody else will.

He wrote a book called "Real Money, Sane investing in an Insane World" that is the shiat.

He also has a nightly show on CNBC called Mad Money. Learning from him (not blindly listening to peoples hot stock tips) has doubled my investment portfolio in a year.

Also an excellent mutual fund is the Franklin Income Fund. Yes it is bond heavy but it has excellent returns and in the down years it only looses 1-2% and the up years it gains 10-12%. The 10 year return for it averages out better than 95% of the funds out there.

I am still a believer in index funds too like VTI and DVY.

Hard to take anyone serious with a sound-effects board.. and toys he's playing with while talking to you about finances.. I've TRIED to watch him, and some of the things he said made sense, but I couldn't get by his irritating antics..

 

[Ghetto Smurf]

I'm interested in investing but I have absolutely no clue where to start. The extent of my investing experience is my 401K account at work. Obviously, my goal is to be rich before I hit the grave. And when the time comes, I also want to ensure that my daughter will be able to attend college.

So my question is, where should I start? Any insight would be very helpful. Mutual funds, stocks/bonds, IRAs...it's all confusing to an investement virgin. Please help!

You may look into dumping all your money into one high risk investment.. its all about taking chances. i always put all my eggs in one basket. especialy if that basket is overseas somewhere.

 

[C-Murda]

I tried one of those Nigerian money making schemes and made fat bank!

 

[crabcake]

I tried one of those Nigerian money making schemes and made fat bank!

If you were really black, that would've been phat.

 

[czygvtwkr]

Hard to take anyone serious with a sound-effects board.. and toys he's playing with while talking to you about finances.. I've TRIED to watch him, and some of the things he said made sense, but I couldn't get by his irritating antics..

Try the book, its really hard to find anyone else that tells you why they make the decisions that they do. Most analysts only tell you "tips".

 

[shinyhappy]

Talk To A Professional

A lot of good advice in here.

My suggestion- which has been stated- is learn as much about investing as you can before you start and think out what you do. What works one person, may not work for you. Unless you know every nitty-gritty detail that they know, you're still shooting at a dart board. And unless you invest and pull out exactly what and when they do, you won't get the same results.

Example 1: Someone suggested getting financial advice. That's not profitable for me. With a live-in GF that has two kids, a third on the way, a newly purchased money-pit (house), and my low salary (23 w/o a degree), it would take forever to get the advice fees back with my investment.

However, I'm not looking to get rich. I'm just looking to get a better ROI over the next several years than I presently do with CD's, bonds and MMA's; and not pay a fortune for commission (enter sharebuilder). So, for me, with all things considered, index ETF's are my friends. Again, simply opinion, I prefer "market" indexes to "sector" indexes (enter S&P 500, EAFA, etc. index funds).

Example 2: Until I bought the house I never bought stock, funds, or bonds. I always picked up CD's and had an MMA (money-market account).

Why? Because it wasn't worth it. I planned on buying a house in a few years as well as paying for my education, so I couldn't afford the risk. Now that dream's a reality (with cash left over) I can look at longer term and potentially more profitable investments.

But, like I said, take my approach for what its worth... Nothing unless you look, learn, think and understand for yourself. And when you do, you'll understand that the hardest thing isn't all the mumbo-jumbo financial stuff (which most of it is trivial anyway); but actually having the discipline to save and consistently contribute money.

This is really fabulous advice. But I still think everyone who is new to investing should START BY TALKING TO A FINANCIAL ADVISOR. I know mine will meet with you for no cost and no obligation -- they really want to educate people and really care about their clients. Call Chuck Rosenfield or Kim Knight at Smith Barney in Waldorf (800) 992-3194 or check out their website: www.fa.smithbarney.com/rosenfield. Genuine people who will take time with you to help you understand all this stuff. There is a lot of "mumbo-jumbo" out there and sitting down with someone who will walk you through it is worth your time.

 

[Kain99]

Wow! This is so cool! I just started my investment portfolio in September. This site is truly for those of us who know nothing. Best site on the web! www.thestreet.com