What is the best investment my wife and I can get into since were totally new to the idea of investing period!

My wife and I don't make a tone of money but were getting there! We have children and need to be conservative. What would be the best investment we could get into that will yield us something worth the time. We looked at Forex.com but that spun us around and the stock market makes some sense to us but we wouldn't know were to go. Would some sort of bond be what we need? Any help would be greatly appreciated!

You should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. 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 you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com 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.

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.

Buying a house instead of renting will save you a lot of money in the long run. You don't have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don't know how to handle deadbeat renters, you can have trouble.

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/planni...
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetalloca...
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin...
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://flagship.vanguard.com/VGApp/hnw/...
https://ais2.tiaa-cref.org/cgi-bin/WebOb...
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

Get a handful of no-load mutual funds in different categories.
Some large cap, some mid-cap, some small cap.
Divide between growth and value funds and include 10-20% in foreign.

If you both need a tax deduction, get her an IRA brokerage account at Scottrade.

If you don't need a tax deduction now, but want tax free gains, get her a Roth IRA brokerage account at Scottrade.

Stay away from Forex, it is a trap. You can do it as long as you don't use margin with it.

There is no one great investment. Get no-load, no transaction fee mutual funds, and use dollar cost averaging.

There isn't a one-size-fits-all kind of answer.

How much are you looking to invest?
$5,000? $25,000? $100/week?

How long are you planning to leave the money in?
1 year? 30 years?

30 years & $25,000+: If you're looking to keep the money invested for 30 years, a mixture of stocks is the best way to go. Just like you need a little bit of food from all the different food groups to have a balanced meal, you need five to ten stocks from different parts of the economy to have a diversified portfolio.
For example, Google, AT&T, Coca-Cola, Las Vegas Sands, and Toyota.

For 30 years and $5,000 or $100/week: You still want to be diversified, but the brokerage fees will eat you up if you buy individual stocks. Buy a mutual fund instead. That's where a lot of people put their money together and have someone pick the stocks for them.

1 year: Stocks do go down sometimes, and if you're only holding it for one year, that's too much risk. A high interest bank CD is better.

This is an absolute no brainer. Get some guidance and advice from a qualified investment professional.

Buy stocks , but keep it simple. Buy really good companies like google, Mcdonalds, and some new companies like vmware (VMW)

You only really need three investments:

1) an American exchange-traded fund like SPY
2) an International index fund, such as ETINX
3) a diversified real-estate investment trust, such as FIREX

Spread your money between them as you see fit.

Keep your management fees down, don't trade in and out, you'll be fine.

Open a brokerage account at Zecco and I will help you for FREE. (I am a Portfolio Manager)

A very easy investment is the lifecycle or target date fund. It's a kind of mutual fund where professional money managers allocate your money into a diversified group of stocks and bonds. You don't have to do the money management yourself.

Use 401(k) accounts and IRAs if you can. These are the best tax shelters available to most Americans.

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Good luck. Stop procrastinating & start taking action!