I am 18, how should I invest my money?

I have a good $3,500 to invest. How should I invest it besides in my Roth IRA?

smartly the DODFX that some one recommended requires a $2500 minimum initial investment. (too expensive for me for a starter but it is a good one) . I like ETF's myself VEU or CWI blows almost all international mutual funds out of the water especially in expenses.

Diversify is the key but STAY AWAY FROM FOREX!

I see you are interested in investing in the stock markets. Start trading stocks is as simple as opening a trading account with no minimum investment amount and then picking a stock for as low as $100 and then buy. You need to buy through a broker, there are no way around this. However, that simplicity is truly the wolf beneath the sheep's skin.

There are quite a number of things you need to learn before you can even start thinking of the stock markets ...

1. You need to understand how the stock market works and what it is exactly about.

2. You need to know what are the different styles of trading in stocks and shares.

3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.

For all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.htm

After you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://worden.mastersoequity.com/).........

Remember, the slogan "Just Do It", Just won't do for the stock markets. If profiting in the stock markets is as simple as buying a single stock , then why are so many people still poor?

After you have all the above mentioned knowledge, you need to ask the following golden questions before you can decide whether a stock is worth buying or not :

1. Why are you of the opinion that this stock will rise?

2. Is your opinion valid in the first place?

3. When are you expecting it to rise? Can you hold on for that period of time or longer?

4. What is your expected entry price? After what price would your expected profit margin be too thin to enter upon?

5. Where is your expected stop loss point? What is your stop loss point based on? Where will you tell yourself that it is time to take a loss and get out?

6. Where is your expected profit taking point? What is your profit taking point based on?

7. Does the way you are buying the stock allow you to hold on until your expected profit taking point?

8. How much of your money should you dedicate to this one trade?

9. What is the level of primary, secondary and idiosyncratic risk you are undertaking when deciding how much of your fund to use?

10. What is your cashflow need? Does your cashflow needs allow you to hold the full lifetime of the stock?

After you are able to answer all these questions confidently, THEN you are ready to... PAPER TRADE your stock strategy. Yes, even at this point, you are NOT READY to trade for real. You should trade on PAPER for at least 6 months and become consistently successful BEFORE you take your stock strategy into real life.

Then.. you are ready to start... but there is still no guarantee of success as paper trading is very different from real trading. You will need another maybe 1 year or 2 trading very little money and be consistently successful BEFORE you are ready to increase your stakes.

So, as you can see, success in the stock markets is not easy at all the the less knowledge you have, the more risk you undertake. I lost hundreds of thousands in the stock markets before I become successful.

Take heed and good luck.

All in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets.

If you care to read about how I went from completely broke to retired millionaire trading stocks and options by 28 years old, you can go to http://www.mastersoequity.com/

In conclusion, what I am saying here is that trading stocks and investing for profit is a professional game that takes years and a lot of money to learn, so it is not something that someone in need of college fees should do ... now.... but you should certainly start to learn about it right now.

Hope these information helps.

http://www.optiontradingpedia.com/

http://www.mastersoequity.com/

.

There are four types of places to put you money.
1.retirement fund such as a ROTH. Your best bet is on stocks (especially an index or ETF). Over the long haul only stocks have delivered the rate of return to retire on.
2. emergency fund for emergencies, like when you get fired or laid off. 3-6 months of income. I would get some in a checking account and most in a money market account that you have easy access too.
3. Major expenses fund. Things over time get expensive and you have to watch inflation as you might not get a pay raise for several years in awhile. Sure you might be making $40,000 a year now, but you might be still making $40,000 10 years from now. A $20,000 car now might cost you $40,000 16 years from now. Your wages will probably not cover it then. That's why you need to invest now, to cover these costs later. You will probably need to put this money in a stock account to get the best use out of it. Like I said that $20,000 car is going to probably cost $40,000 16 years from now and probably $90,000 40 years from now.
4. Fun money. Again, you will probably hit a wage wall and if you want to take those trips, buy those fancy electronic toys later, you will need to invest now. You will probably want to put this money in a money market and skim the interest. For instance if you buy a $2,000 computer every 5 years, you will want to be sure that money is there.

Buy one or two mutual funds.

I would get one international and one domestic.

I recommend DODFX - Dodge and Cox International Stock Fund. Its one of the best international funds around.

The other might want to be a small cap fund like RYVPX - Royce Value Plus. This one will be good cause you're young and have a higher risk tollerance.

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