New to investing, tips?

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New to investing, tips?

Postby the errey i breathe on Mon Jul 11, 2011 1:04 pm

So I'm looking into investing for the first time and I really don't know what to do or where to start. I have about $1,200 right now to put in so I don't know if that is enough or I'll need more. Any advice at all or suggestions on reading material would be fantastic.
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Re: New to investing, tips?

Postby newarenanow on Mon Jul 11, 2011 1:07 pm

What are you looking to use this for? Retirement? Other investment?

Are you looking for high risk? Lower risk?

Do you need to withdraw the money in the near future? Long term?
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Re: New to investing, tips?

Postby the errey i breathe on Mon Jul 11, 2011 1:09 pm

newarenanow wrote:What are you looking to use this for? Retirement? Other investment?

Are you looking for high risk? Lower risk?

Do you need to withdraw the money in the near future? Long term?


I just got out of school so I guess retirement/investment. I want it to be a longer (10+ years) investment with low-medium risk but I wouldn't mind a few high risk options either with less invested in these of course.
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Re: New to investing, tips?

Postby cheesesteakwithegg on Mon Jul 11, 2011 1:12 pm

Invest in chocolate, nicotine, and alcohol. Those things will never go away.
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Re: New to investing, tips?

Postby KennyTheKangaroo on Mon Jul 11, 2011 1:16 pm

is the errey i breathe willing to dedicate time to making investment decisions?

does the errey i breathe have any knowledge of finance and or accounting and or investing?
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Re: New to investing, tips?

Postby newarenanow on Mon Jul 11, 2011 1:19 pm

If you want to save for retirement, I'd open up a Roth IRA. That is a long term investment and you can't withdraw it until I believe you are 59 1/2 w/o a penalty (typically 10%). There are one time and other scenarios where you can withdraw penalty free though (first time home purchase, certain medical situation, etc).

It's a nice safe investment that will go a long way to retirement savings over time.

I know you just graduated, but it's never to early to start saving for retirement.
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Re: New to investing, tips?

Postby columbia on Mon Jul 11, 2011 1:21 pm

KennyTheKangaroo wrote:is the errey i breathe willing to dedicate time to making investment decisions?

does the errey i breathe have any knowledge of finance and or accounting and or investing?


If the answer is "no" to both of those, he should invest in an all-index fund, perhaps one that also includes stock markets, bonds and precious metals.
If the answer is "yes" to both of those, he should still probably do that.
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Re: New to investing, tips?

Postby shafnutz05 on Mon Jul 11, 2011 1:22 pm

Sent you a PM.
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Re: New to investing, tips?

Postby newarenanow on Mon Jul 11, 2011 1:23 pm

shafnutz05 wrote:Sent you a PM.


Can you send me one?
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Re: New to investing, tips?

Postby the errey i breathe on Mon Jul 11, 2011 1:32 pm

columbia wrote:
KennyTheKangaroo wrote:is the errey i breathe willing to dedicate time to making investment decisions?

does the errey i breathe have any knowledge of finance and or accounting and or investing?


If the answer is "no" to both of those, he should invest in an all-index fund, perhaps one that also includes stock markets, bonds and precious metals.
If the answer is "yes" to both of those, he should still probably do that.


To answer Kenny. Yes to dedicating time, No to any knowledge.

To mac, what are all-index funds?
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Re: New to investing, tips?

Postby KennyTheKangaroo on Mon Jul 11, 2011 1:37 pm

columbia wrote:If the answer is "no" to both of those, he should invest in an all-index fund, perhaps one that also includes stock markets, bonds and precious metals.
If the answer is "yes" to both of those, he should still probably do that.



that is, indeed, probably the correct answer. that being said, kenny the kangaroo does indeed purchase individual stocks in an online account. is it worth the time and effort? kenny the kangaroo has had success thus far, but still, even if its a conservative buy and hold type deal, its very risky.
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Re: New to investing, tips?

Postby columbia on Mon Jul 11, 2011 1:38 pm

One that invests in the stock market as a whole, but there are ones that are even further diversified and include bonds and other commodities.
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Re: New to investing, tips?

Postby columbia on Mon Jul 11, 2011 1:40 pm

KennyTheKangaroo wrote:
columbia wrote:If the answer is "no" to both of those, he should invest in an all-index fund, perhaps one that also includes stock markets, bonds and precious metals.
If the answer is "yes" to both of those, he should still probably do that.



that is, indeed, probably the correct answer. that being said, kenny the kangaroo does indeed purchase individual stocks in an online account. is it worth the time and effort? kenny the kangaroo has had success thus far, but still, even if its a conservative buy and hold type deal, its very risky.


After you lose one to many "sure things" during football season, your enthusiasm for outsmarting the market wanes.
It's definitely not for me.
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Re: New to investing, tips?

Postby KennyTheKangaroo on Mon Jul 11, 2011 1:51 pm

columbia wrote:After you lose one to many "sure things" during football season, your enthusiasm for outsmarting the market wanes.
It's definitely not for me.


certainly understandable, and again, probably the correct answer. that being said, kenny the kangaroo would rather screw up making decisions for kenny the kangaroo, instead of letting an index fund cruise along into the abyss, or even worse, going to some broker and selecting a some crap, expensive fund that he is paid to sell you. when kenny the kangaroo opened up a Roth at PNC, the lady handed kenny the kangaroo a list of four mutal funds (named conservative, moderately conservative, moderate growth, and growth), all with a sales load of like 5%, and said here, pick one. the whole process took maybe 25 minutes. kenny the kangaroo forked out $3,500 on some turd expensive transamerica fund without really giving it any thought, and neither did the broker. that really isnt responsible on anyones part, and thats a big reason why kenny the kangaroo flys solo.
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Re: New to investing, tips?

Postby Shyster on Mon Jul 11, 2011 1:57 pm

Do you have any revolving debts, like credit cards? How about student loans? Do you have an emergency fund, for example, enough cash on hand to cover three to six months of your expenses? All of those are higher priorities than retirement investing. For example, if you’re investing money at 3% but paying credit-card interest of 20%, you’re moving backwards, financially speaking.

I generally adhere to Dave Ramsey's baby steps. See: http://www.daveramsey.com/new/baby-steps/.
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Re: New to investing, tips?

Postby bh on Mon Jul 11, 2011 2:02 pm

KennyTheKangaroo wrote:
columbia wrote:After you lose one to many "sure things" during football season, your enthusiasm for outsmarting the market wanes.
It's definitely not for me.


certainly understandable, and again, probably the correct answer. that being said, kenny the kangaroo would rather screw up making decisions for kenny the kangaroo, instead of letting an index fund cruise along into the abyss, or even worse, going to some broker and selecting a some crap, expensive fund that he is paid to sell you. when kenny the kangaroo opened up a Roth at PNC, the lady handed kenny the kangaroo a list of four mutal funds (named conservative, moderately conservative, moderate growth, and growth), all with a sales load of like 5%, and said here, pick one. the whole process took maybe 25 minutes. kenny the kangaroo forked out $3,500 on some turd expensive transamerica fund without really giving it any thought, and neither did the broker. that really isnt responsible on anyones part, and thats a big reason why kenny the kangaroo flys solo.
If I had more time, I'd like to try this, but as it is I just invest in a couple EFT index funds in a few different sectors and call it a day. Gotta give you props though for managing things yourself. :thumb:
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Re: New to investing, tips?

Postby pittsoccer33 on Mon Jul 11, 2011 2:07 pm

Mutual funds are a good place to start investing.

An S&P 500 fund is a really good investment. They have very low fees, since there is no active management involved - they just mirror the S&P 500, which is the 500 largest companies in America. Since the index was started it's average annual growth has been around 10%. The dirty secret in investment management is that many many many mutual funds with extremely highly paid managers don't beat the the S&P 500 on average.

Since you're young and new to investing a target date fund might be appropriate to picking various other higher risk funds. They are labeled by retirement year - say 2050, and invest with a long term, riskier strategy.

The other consideration you have is the type of account you will hold them in. You will have three main options based on your ultimate goal - a general investment account, a traditional IRA, and a Roth IRA.

A general account has few specific tax related consequences. You will pay capital gains taxes on any money you make. This would be a good account type if you
are saving for a specific short term goal - like a vacation, a new car, etc.

A traditional IRA is a retirement account where you pay no taxes on the money invested today, but you will pay tax when you withdraw the money when you're old. Since you've already had the money taxed in your paycheck, you will report your contribution to the account on your taxes at the end of the year for credit.

A Roth IRA is the opposite - you contribute money you already paid income taxes on, but when you withdraw it as a seasoned citizen you pay no taxes. A roth is a good compliment to an employer sponsored 401k (a 401k and a traditional IRA share the same basic tax rules). As a general rule of thumb I tell my friends to max out their employer match on their 401k, and then to open a roth if they wish to contribute additional money
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Re: New to investing, tips?

Postby Tomas on Mon Jul 11, 2011 2:24 pm

Everything I am about to write is just my ignorant opinion and NO investment decisions should be made based on it!

There should be several threads on LGP that discuss investing. This one is relatively short, but quite informative, I think:
viewtopic.php?f=5&t=51219&p=1579782&hilit=s%26p500#p1579782

If you decide to invest money outside of 401-K, or Roth IRA, given the small amount you have, you should be concerned about commissions. Percentage-wise, they can eat your profits substantially, especially if you need to cash out fast (even though you seem to have a long term horizon - which is great - unexpected events in life happen). At this point, I'd say that one of - in not the - best way for a small, repeated, "casual" investor would be TD Ameritrade, because they offer commission free trading for 101 Exchange Traded Funds (ETFs), many of them from the super low-cost provider Vanguard (if possible, always pick the ETFs with the lowest expense ratios), which offers both stock and both ETFs.
http://www.tdameritrade.com/trade/etflist.html
(You could buy all Vanguard ETFs - even more than TD Ameritrade offers - directly on Vanguard.com, but unless you have $50K invested with them, you'll pay - I believe - $20/year as the account management fee. TD Ameritrade - I believe - has no such fee.)

And this is seriously just my opinion:
If I was a young investor, had some money left and potentially 10-year horizon, I'd probably start with some combination of (see the above TD Ameritrade list):
VTI (overall US equity market, basically S&P index )+ good diversified bond fund (say BLV)
For more risk-loving people, there are funds like
VWO (emerging market equity)
VB (US small cap)
VNQ (real estate)
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Re: New to investing, tips?

Postby Ron` on Mon Jul 11, 2011 5:05 pm

Best advice, you have to try if you are thinking of saving for retirement. Second best advice, find a way not to be limited to a few employer select funds under your 401K, IRA or a Roth Plan. When my spouses employer was setting up their Simple IRA plan I advised him not to limit their options, which is a choice by the employer establishing the plan. When my employer allowed us to open up brokerage link accounts under our existing 401K, allowing more options, I jumped at the chance. Our Roth funds are similar in options. Ability to pick from funds allows you to diversify and seek help doing it. Consider the transaction fees and loads as you invest. Most inside of the companies available funds are no transaction, but you can't be day trading either.
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Re: New to investing, tips?

Postby PensFanInDC on Mon Jul 11, 2011 5:13 pm

I personally don't do investments, 401k etc. But my tip is buy low, sell high.
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Re: New to investing, tips?

Postby OutofFoil on Mon Jul 11, 2011 7:28 pm

Invest in my startup. Stock options might be worth something in 10 years when I go public. Probably not though, you can get away with things like blowing investors' money on strippers and blow a lot easier when it's a privately held entity.
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Re: New to investing, tips?

Postby JS© on Mon Jul 11, 2011 7:57 pm

You need to diversify yo bonds, *****.

Image
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Re: New to investing, tips?

Postby KG on Mon Jul 11, 2011 8:26 pm

PensFanInDC wrote:I personally don't do investments, 401k etc. But my tip is buy low, sell high.


Why didn't I think of that! :face: :D
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Re: New to investing, tips?

Postby PensFanInDC on Mon Jul 11, 2011 9:33 pm

KG wrote:
PensFanInDC wrote:I personally don't do investments, 401k etc. But my tip is buy low, sell high.


Why didn't I think of that! :face: :D


Concentrated frozen orange juice
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