Need advice: How to start investing

[calamity jane]

How would some of you recommend a person get started in investments. I'm talking about buying some stocks, starting a 401K and looking into investing in annuities.
I would appreciate names of firms you've had good or bad experiences with, too.

 

[JEB]

I'm with T. Rowe Price. A Baltimore company.
They have no-load mutual funds and a discount brokerage.
Their web page has lots of info on investing.

 

[Lugnut]

How would some of you recommend a person get started in investments. I'm talking about buying some stocks, starting a 401K and looking into investing in annuities.
I would appreciate names of firms you've had good or bad experiences with, too.

If you're just starting I would suggest sitting on your money or placing it in an index fund (I use an S&P500 fund) while you read up on the basics. Pick up a couple books on value investing and growth investing, check out websites like fool.com, finance.yahoo.com, etc...

If you don't like what you're learning (some people don't) leave your money in the index fund.

If you want to be more involved, read read and read some more. When you THINK you have a idea what you're doing go check out the portfolio tools on yahoo finance. Setup a portfolio with a fake budget and enter the info for purchases (just like you would if it were real) and watch it for a few months to see if your ideas are panning out. Play with fake money until you get comfortable with the concepts.

 

[vraiblonde]

I use Fidelity for my 401k and Scottrade for my stocks. I like them both okay, but have never used anything else, so no basis for comparison.

Both can be managed online, and both have real live humans who will answer your questions and walk you through different scenarios to help you understand. Fidelity has all sorts of retirement tools online, where you plug in your goals and it analyzes your portfolio and makes suggestions based on that.

Google for a stock/401k tutorial and that will answer a lot of questions and explain how it works as well.

 

[SpriteZero]

I use Bank of Americia....Stock, funds, other investments...

 

[Lugnut]

Forgot to mention, I use Ameritrade for everything now. Great customer support as well.

 

[marianne]

For someone getting started, I would point them to the Motley Fool (Fool.com: Stock Market Advice | Stock Investing Advice) and tell them to read the articles there.

I would then recommend they develop a mission statement and strategy. For example, the mission may be "save enough for a comfortable retirement and the kids college." The matching strategy would be:
1) first & foremost put at least the amount their company matches into 401K
2) then max Roth IRA
3) then max their 401K contributions
4) then put money in 529s

You'd spread that across mutual funds and bonds suitable for long-term investing. You'd want a mix of large, mid, and small cap funds, international funds, and bonds appropriate for the risk you're willing to take and how long you intend to keep the money invested.

If your mission were not focused on long-term goals or if you still have cash to burn, you would develop a strategy based on individual stocks, tiered CDs, I bonds, etc. So it's important to first figure the mission - what exactly are you "investing" for - and then you can figure out the best investment vehicles.

Regarding names of firms, I'm more than a little skeptical about financial investment companies. I found they tend to push their own products/services which may not necessarily be what you need. I like financial consultants that are more 'free agents'.
Ten years ago I found such a financial consultant and he's awesome at pointing me in the right direction and helping me help myself. He's since move to Florida but I call or email him every few months when I have a question and he always gives me great advice. If you're looking for someone like that, PM me and I'll give you his contact info.

 

[calamity jane]

Thanks everyone, some great advice here. Hope I can figure some of it out.

 

[czygvtwkr]

Here is a great article I read a few years ago and started a little side portfolio with the advise but used different funds and have a nice little booty hidden away for rainy days.

Start investing with just $100 - MSN money

 

[Chain729]

Here is a great article I read a few years ago and started a little side portfolio with the advise but used different funds and have a nice little booty hidden away for rainy days.

Start investing with just $100 - MSN money

In additon to the Motley Fool, MSN Money has some GREAT articles. Read everything you can before you get started. Don't depend on anyone's advice, do what you understand and what you feel comfortable with.

Also, the Motley Fool does have a nice little comparison article about the different "Discount Brokers." Well worth the read, once your ready to set up an account.

 

[sparkyaclown]

I would also suggest looking into Dividend Reinvestment Plans (DRPs). With these plans the stock purchased is in your name, instead of a broker. The dividends paid out by the corporation is automatically rolled into purchasing more stock. Depending on the corporation's plan you may not pay any commission on the reinvestment. Most plans only require 1 share to start and allow you to purchase more stock through the plan whenever you wish. Stocks in these plans are allowed to be purchased in fractional amounts and the dividends are paid out with those fractionals factored in. For example, your 1 share pays out a dividend of .50 and is reinvested buying you another .02 share so now you own 1.02 shares, the next dividend is paid and your it and is calculated against 1.02 shares so you would receive a dividend of .51 and in turn you purchase an additional .021 shares. The more stocks you own the faster they will build. This link will give a little more info on DRPs as well as provide some links you can use to get started Fool.com: Drip Portfolio

 

[Chasey_Lane]

My 401(k) is with T. Rowe Price and I have nothing but great things to say about them. I can send emails if I have questions and I can also call a representative, too. I do a mixture of aggressive and conservative funds and over the last year I've done extremely well!

 

[Chain729]

I would also suggest looking into Dividend Reinvestment Plans (DRPs). With these plans the stock purchased is in your name, instead of a broker. The dividends paid out by the corporation is automatically rolled into purchasing more stock. Depending on the corporation's plan you may not pay any commission on the reinvestment. Most plans only require 1 share to start and allow you to purchase more stock through the plan whenever you wish. Stocks in these plans are allowed to be purchased in fractional amounts and the dividends are paid out with those fractionals factored in. For example, your 1 share pays out a dividend of .50 and is reinvested buying you another .02 share so now you own 1.02 shares, the next dividend is paid and your it and is calculated against 1.02 shares so you would receive a dividend of .51 and in turn you purchase an additional .021 shares. The more stocks you own the faster they will build. This link will give a little more info on DRPs as well as provide some links you can use to get started Fool.com: Drip Portfolio

I don't know about the other discount brokers, but I do know that you can set up sharebuilder to do that automatically, free of charge, whether that particular company offers DRiPs or not.

My 401(k) is with T. Rowe Price and I have nothing but great things to say about them. I can send emails if I have questions and I can also call a representative, too. I do a mixture of aggressive and conservative funds and over the last year I've done extremely well!

My company's predecessor had T Rowe for 401K. I loved them. I was ticked when it changed over to the crap we have now.