I can put down an initial investment of only about 2k, but I can contribute 1k per month after that. I don't plan to usethese funds any time soon--not within the next 5 to 10 years, and possibly not for a while after that... What sort of investment should I consider? I don't want anything too risky, but I'd like a decent rate of return. Any suggestions? I have little experience with investments, so any advice would be helpful. hi Melissa,
i've dabbled in many things before. stocks, options, land banking schemes, oil-related schemes that offer yearly residual income...etc etc... but looking back, i think the best investment i've made so far has been the money spent in my investment education. be it stocks, options or forex trading courses ...etc etc, try attending some of those course preview sessions and see what fits your style. courses can be quite expensive, but i personally feel that finding a good investment mentor is priceless.
of course, the above only applies if you intend to educate yourself and make your own investment decisions. however, if you are after a no-fuss way of putting that money into good use, you may want to consider those safer avenues that have been suggested before...401K plan...etc etc.
another way is to tap into the minds of those who are "experts" in this area. try fixing appointments and start talking to various private bankers to get a feel of what's available out there. you could discover something very interesting and attractive from these people that not many may know of (ie. wine investing, managed-funds with capital garantees, niche funds that are focused in very specific areas like luxury goods, etc, etc). but that said, most bankers are just after your money... so thread carefully... best if you can go with a skeptic friend who can offer a good 2nd opinion.
in summary, whatever you choose, remember the universal truth that the higher the rate of return, the higher will be the risks. give some attention to those vehicles that allow investors to win in any kind of market conditions (ie. those that can benefit from both bearish and bullish markets). based on that reason, i personally favor things like options and forex trading since it allows investors to buy-low-then-sell-high or sell-high-then-buy-low.
invest some time into your investment education... be it courses, time spent talking to bankers, self-education by reading investment books..etc. that, in my opinion, would be your best investment for now if you do not have much experience about investing.
hope the above helps :O) If you have 1k per month you can invest, it sounds like you are doing fine as it it.
You are going to need to figure out what kind of goal you have for your investing. Do you want to generate income, retirement, growth.
Start by reading Mad Money by Jim Cramer Call a professional in your local area. Make sure they are independent. Most people who try investing themselves do poorly. You should invest in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying 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. Since you don't want anything too risky you'll probably not put much into stocks. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.
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://www.dallasnews.com/sharedcontent/...
http://sec.gov/investor/pubs/assetalloca...
https://flagship.vanguard.com/VGApp/hnw/... Invest in Mutual Fund: Finding the Best Mutual Funds
As the prices of mutual funds change daily, finding the best performing funds can be quite tricky. In case of normal stocks and securities, you often track the prices. But for the mutual funds, it is better to conduct research to decide which investment company is administering the fund and the specific securities held by the mutual fund.
Selecting a mutual fund administered by an investment company with good record of selecting attractive investments is a right sign that buying the fund is a smart move and securities held by the fund have been steady performers that can increase stability and security of a risky investment.
http://debts-to-wealth.com/category/Guid... |
