Long Term 5-10 years Investment Advice Please?

Im young at 24. I have $50,000 I can invest right away also I can add $1,250 monthly for 48 months..I would like to invest somewhere from 5-10 years and would like to know what my best option would be? Should I hire a investor? Should I invest in stock?? CD?? I know these are very broad questions but I just want the best possible risk vs return for my situation. Thanks

Age and cash are on your side, so don't waste them!

Warren Buffet did exactly this, long term stock investment. but it is not like buying any stock and hold them till death! (most beginners did this).

Instead, you need to search for high quality stocks that have top performing businesses. earnings per share growth and ROE is two distinctive features that i always use to get rid of junk stocks.

Secondly, make your due diligence on how much the stock worth. you can do this by calculating its intrinsic value using the simple formula. last but not least, reduce your investment risk by buying only when it is within its margin of safety.

Happy Investing & Good Luck!

Step-by-Step Stock Investing for Beginners
http://www.stock-investment-made-easy.co...
http://answers.yahoo.com/question/index;...

In my opinion you should invest in the stock market. I suggest, however, that you don't try to pick individual stocks. Learn what you can about ETF's (Exchange Traded Funds). I think they are better than mutual funds. After you learn about ETF's. Study asset allocation. Then learn to balance your investment between various ETF's to get the reward/risk profile that suits your risk tolerance.

Here is the best piece of advice... Read a LOT of finance books, and do NOT trust the mutual fund industry with your money. Macro-economic and demographic trends suggest the US economy is headed for the pisser to BEGIN by year 2010. So you have 2-3 years to learn everything you can to take charge of your finances. The US dollar will become a think of the past and the "Amero" will become the new North American currency (Canada + USA + Mexico).

DO NOT INVEST IN REAL ESTATE (yet)!

To start off I would recomend the "Rich Dad, Poor Dad" audio programs from your local library to get you thinking like an investor. Then MAKE SURE you read and listen to "Buffettology" and "The New Buffettology" by Mary Buffett, which is about her multi-billionaire ex-father-in-law... A funny fella who goes by the name Warren Buffett.

If you had at least the some basic knowledge about the financial markets I would recommend options spread trading on indexes, blue chip securities, and index futures. It's how I make a consistent $2,000/month.

There are several options open to you. For the 5-10 yr range equity investments (stocks) have in the past returned about 8-13% annually. You know what cds return about 5%. Individual stocks offer the opportunity for the better returns but also the greater risk. Here are some examples of investment grade stocks returns over the past 5 and 10 years. Just a few.
JNJ 5 yr 10.1% 10 yr 9.2%
MMM 5yr 13% 10 yr 8.6%
GE 5yr 11.6% 10 yr 7.6%

greater but more inconsistant returns can be had by investing in 2nd tier companies.

BLL 5yr 25.6% 10 yr 23.1%
UNP 5yr 18.6% 10 yr 7.9%

You have sufficient capital so that you could create a sufficiently diverse portfoilio of individual stocks. It would require some work on your part and there is some risk that you might pick bad stocks. But that will offer you the opportunity for the best returns.

The second option open to you is to invest in mutual funds. These offer diversity of investments which reduces risk. And there are also index funds, which have become very popular in the last 5 years.

The most popular index fund is SPY indexed to the S&P 500.

SPY 5 yr 14.6% 10 yr 7.06%

I personally am not too keen on SPY because it is capitalization weighted. I prefer RSP which is equal weighted.

RSP 3yr 15.87% has not been around longer. SPY 3yr 13.29%

Mutual funds have recently gotten a bad rap because of their relatively poor overall showing against the index funds. But I think that some of the criticism though certainly valid is perhaps slightly unwarranted. The advantage of mutual funds is that you can taylor them to your needs to achieve good diversity and you can pick and choose among them to avoid those that have blemished track records.

Here are a couple of examples.

PENNX 5 yr 19.2% 10 yr 14.03% small cap fund
GAM 5 yr 16.58% 10 yr 15.32% closed end cap apprec

You can check out all of this data at Morningstar.com, but you will need to set up a log in to do so. It is free.

The main disadvantage of mutual funds is that the must distribute realized capital gains at year end on which you will have to pay taxes. A distinct disadvantage. Index funds do not have realized capital gains so over an extended period of time index funds on an after tax basis might out perform mutual funds.

Now a word of advice. Always have a cash reserve on hand. It can be in cds, t-bills, or money market. One never knows when the market might tank and a good buying opportunity might come along. The cash reserve might be 10% to 25% of your assets.

FOREX market all the way. Its the largest financial market. Its how banks make trillions of dollars each year. Its how bank of America made most of their profits last year. It is now available to the public and I know of a cutting edge program where people made 220% return on their money last year. If you could keep that up you would be a millionaire in no time. The way you can make so much is that your leveraged 400:1. Every dollar you invest is like 400 dollars because you have a broker. Dont settle for what everyone else settles for. Mutual funds will only give you 15% a year. Thats nothing. Demand more. Check out the video below. If you like it try the demo try it out for 2 weeks using fake money and then you will see how much money you will make following this strategy.

www.freedomrocks.com/freedemo

Think about what it is that you want. What are your goals for this money?

Do you know anything about investing, mutual funds or the stock market?

Diversify. Do not put all your eggs in one basket. Split your money between the following types of investment:
Low Risk - High Interest Bank A/c (4% - 6% p.a.)
Medium Risk - Mutual Fund / Index Fund (8% - 12%)
High Risk - Individual Stocks / Strategies (20%+)

Investing tends to only get exciting when you make money quickly or you see the end result of a good investment over a fairly long period of time 15 - 20 years or longer.

The more risk we are prepared to take, the more we can expect to make. That is why the stock market will generally return more than a savings account.

To be successful you will need patience, discipline, and wisdom. But most importantly you need a plan and you need to define your goals.

It may prove expensive to acquire that much needed wisdom on your own. Learn by other peoples mistakes. Learn from other peoples successes. Read some books. Visit your local book store and find a book that you like and feel comfortable with.

Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. O鈥橬eil (Founder of Investor鈥檚 Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco

Check out web sites like fool.com and yahoo finance.
Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years.

Pick something that you understand, find easy to use and will help you realise your goals. Pick a strategy where you can take responsibility for your investments and be in full control of your capital.

Systems like the Stocks Monthly system are definitely worth investigating once you are up to speed with the nuts and bolts of investing.

Don't hire an advisor. Educate yourself. If you're a novice, use mutual funds. Later, when you become more knowledgable, you can try individual stocks if you have the time to do the research.

Read The Only Guide to a Winning Investment Strategy You'll Ever Need: The Way Smart Money Invests Today by Larry E. Swedroe.

It's the first book I ever read on investing, and the best one.

Your time frame is what I would categorize as "intermediate-term". This is kind of tough. However, here are two good options, IMO:

1) An intermediate-term bond fund. This is the safer of the options. It will give you a higher return than a money market account, but will not expose your money to a stock market downturn. Try this fund if you are in the 25% tax bracket or lower: https://flagship.vanguard.com/VGApp/hnw/... or Try this fund if you are in the 28% tax bracket or higher: https://flagship.vanguard.com/VGApp/hnw/...

2) A balanced fund that invests in both stocks, bonds, and money market securities. This might provide a higher return than option #1, as long as the stock market cooporates. You will have a little higher risk than option #1, though. Try this: https://flagship.vanguard.com/VGApp/hnw/...