I am going to have 10K to invest and am a novice and would like some sound advice of what to do with it.?

Thank you!... To all who post serious answers to my question as there will undoubtedly be someone who says some dumb comment. As always.....

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. Vanguard has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowleadgable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:
http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)

529 plans: http://www.savingforcollege.com

some more info is needed to answer that question in my opinion. I truely believe you have the answers already just needed to ask the additional questions:

1. Do I need this money short term to paid bills and saved up for rainy days?
2. What is my investment time frame?
3. What is my investment objective(Risk, growth, stable income?)
4. If I do risk it, will I be ok to lose all 10,000?

3 blue chip stocks, 100 shares each. General Electric, Bank Of America, Pfizer. You'll get $508 per year in dividend.

You should set up appointments with Investment service companies. They can show you different options on setting up a portfolio with your money.

You definitely want it in stocks, and then move part it into more stable investments only within 10 years of retirement.

Start with a low-cost index fund until you learn more about stocks. But if you feel the burning desire to buy individual sticks right away, starting with the three blue chips previouusly recommended is not a bad way to start.

Research your investment ideas before investing. 3 important basic factors:
1. Business of the company
2. Future business growth and profitability for the company
3. Price at what you invest- margin of safety

Congrats on 10k! I'm a financial advisor with Edward Jones. I help folks just like you for a living. E-mail me (jason.goldsberry@edwardjones.com) and I can give you some ideas (no cost to you, don't worry) and can warn you against some pitfalls.

In fact I would recommend it -- I see terrible advice all over these forums.

First off, be conservative with your money. There is no sense in taking risks.

Your first option should be to fund fully a retirement account. If you do this, and you have extra cash, then one of the best things you can do is open a DRIP Plan.

These powerful investment plans are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street.

They are perfect for small investors, as well as big investors. They are safe and allow you to not care about whether the market is going up or down. They are a must for any serious investor.

I strongly recommend looking into it. They are great plans.

I had the same problem as you have.
I had a good amount of money, but didn't knew where to invest it.
So I looked around for something that gave me a great return towards a low risk.
And the only thing I could find was a mannaged account.
Here you can follow up my results of every day:
http://my-robottrader.blogspot.com/

I'm verry excited because I already have 40% ROI in one month and a half.
My moneymannager is giving me great support, and answer all of my questions almost immediatly.
Annyway feel free to contact me (adress on my blog) and I'll bring you in direct contact with my money mannager.

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