Joe
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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. The links below have on-line questionnaires 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 knowledgeable 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. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.5%.
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://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics
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
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.
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 |
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Shelly
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I would look the answers you receive on this forum closely. It appears to me you have a Vangaurd Mutual Fund salesman trying to get you to go to his link, a couple of people soliciting their blogs.
If the individual who is giving you advice lists links in the body of the message, instead of in the source area, then they probably have an ulterior motive.
My advice.....LOL....is look closely at all your alternatives. I personally think mutual funds on an overall basis have become to expensive.
I would look at ETF's or a DRIP Plan.
I hope everything works out for you. |
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Mary Ann V
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I see you have some suggestions to invest in mutual funds. They can be a good investment, however, you should be aware that 75% of all mutual funds under perform the market. All of them have management fees, and some have sales loads.
You should ask what you are paying all the fees for if 3 out of 4 of them are going to under perform the market.
May I suggest a DRIP Plan.
They 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.
The best part is you get solid annual returns from well-known, safe Blue Chip companies like: McDonalds, General Electric, Pfizer, Walmart, US Bancorp.......etc........
They are inexpensive to start and maintain.
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. |
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Brendan Prewitt
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I have been encouraging people to spend this money. The government is paying people this money so that they will put it back into the economy, which should help the recovery. By investing it, you are not doing much good for the economy. If everyone does this, which seems to be the consensus, the government is wasting $150 billion for nothing more than a little, short-term confidence boost, which is pointless. Who cares what you do with it, if you want to use it to make money, try buying something that will save you money, energy efficient light bulbs, new energy efficient appliances, anything. Reality is, you could be hurting yourself, your neighbors, and your friends in the long run by investing this money rather than putting it back into the economy where it belongs. The money isn't actually yours, keep that in mind. If the government actually wanted you to save more money, they would give you permenant tax cuts, they want you to spend this money to boost the economy. With that said, find a way to creatively spend this money that will actually save you money, rather than being only self-interested and investing it. A $5 energy efficient light bulb will save you up to $38 in electricity bills over the life of the bulb, thats a 660% return on investment, net of the cost of the bulb, much better than you will do in the market, especially in this market, and even more so if you are unexperienced. Just my opinion, it's something you should think about, the government isn't doing this because it wants to be nice, its trying to keep us from avoiding a recession. Not what you wanted to hear, I know.
But if you are looking to invest even if you spend that money, I would encourage you to look at Investopedia, a leader in investor education, which has a lot of great investing tutorials and articles that could get you started. It is going to be hard to find a high interest rate now that the Federal Reserve has cut rates so drastically. If you have a long timeframe, you might want to consider ETF's or mutual funds, if you do not have a lot of time to put into your investing activities. If you are willing to dedicate a portion of your time, there is no reason that you can't succesfully invest in stocks. I would encourage you to look at what Investopedia has to offer, as it is one of the best free resources I know of. You should consider opening a free, virtual practice account on Investopedia to practice the strategies that you like, until you find one that works for you consistently. Once you have one, you should open a standard discount brokerage account and begin making money.
Basically, if you are risk averse, or stretched for time, you should invest in mutual funds, CD's or a savings account, but you will be sacraficing the potential for a higher return. If you have the time, there's nothing that offers a more consistent, better return than stocks.
Just some thoughts, I hope they helped some.
Best of luck!
Brendan Prewitt |
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MM
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If you don't have savings, you first need to just add your money to a CD or money market.
There's no point in putting money in stocks or mutual funds, which will *not* provide you with a guaranteed rate of return, if it's the only money you have.
Some online banks offer 3.5% on CDs. You may be able to find some other banks that offer 4%. But that's about the best you can do right now. |
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tommy l
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You might find some tips here: http://investments.1crt.info |
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173942
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There are many options out there, but the best thing I can think of is give it to me |
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Jayne Savage
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With the economy in the precarious state it is in right now, I would think about investing in gold. |
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