dluo
|
Making the correct investment decision for an individual typically takes professional know-how.
You must answer the following questions before you can decide on what to invest:
1) Your risk preference; or how much risk you are willing and/or be able to take?
2) Your return objectives; or what is the required expected return that will most likely allow you to meet your goals (you must first articulate your goals)?
3) What are your constraints:
3.a Time – how long can you invest the money for?
3.b Tax – how much are you taxed?
3.c Liquidity – do you need the money in the mean time?
3.d Unique circumstances – are you buying home, having a child, getting married, etc?
3.e Legal/Regulatory issues – typically not a concern for individuals, but included there for completeness.
If you have the money, get a professional.
If you don’t have the money, many sources are available on the web to help you get started.
If you don’t have the time or the money, then buy index funds that track the broader market, such as the SP500 or the Dow, and take comfort in the fact that passive index funds consistently outperform 75% of the money managers in the world (but don’t invest in equity at all if you don’t have at least 5 years).
Finally, the generic rule to follow is to keep100 minus your age in equity, and the rest in bonds. So if you’re 30, a good, generic portfolio to hold is 70% in an equity index fund that tracks the SP500, and 45% in a bond index fund that tracks the Lehman Ag.
Since you’re in health care, I would stay away from health care stocks. The reason is that you are already invested via your human capital in the health care sector. If you also own health care stocks, then these stocks will do most poorly when the health care sector falters, which is also when you are most likely to loose your job and need to rely on your investments. |
AnOrdinaryGuy
 |
Right now, the European stock markets are doing well, and you could look for a mutual fund that specializes in European stocks.
But don't keep all your eggs in one basket! After a while you should diversify. No one type of investment will always stay high so you need some variety. |
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