I am looking for some investment advice

[Saint Nick]

Hello everyone, I figure I'm asking this question when our economy is not doing so well.

However, I am interested to begin investing my money in something. I make about $1000 month during school semesters and then about $2000 during May-August. I am 22 and will be graduating college in December 2009.

Where do you all feel is the best place to put my money? I would like to begin my investing at the end of this December.

 

[Ns1]

put it all on black

 

[Epic Fail]

Originally posted by: Ns1
put it all on red

fixed

 

[Drakkon]

the best advice i ever got: buy low - sell high

 

[Ns1]

Originally posted by: Epic Fail

Originally posted by: Ns1
put it all on 00

fixed

fixed again?

 

[HardcoreRobot]

open roth ira, invest in a target or index fund, never look back

 

[Jeff7]

Buy low, sell high.


</thread>




Edit: Curses, beaten to it.

 

[PepePeru]

if i had it to do over again.
i'd have invested the money i put into my stock account in a CD ladder.

 

[darkxshade]

Originally posted by: Drakkon
the best advice i ever got: buy low - sell high

Yea, everytime I try to apply that strategery I end up doing the opposite so nowadays I tell people to buy high - sell low and see how that turns out.

 

[edro]

I am looking for some investment advice.

Well you have come to the right place!

 

[Scarpozzi]

Originally posted by: Epic Fail

Originally posted by: Ns1
put it all on red

fixed

Are you some kind of communist?


Answering the OP's question.....

You're 22. I'm going to give you my straight up advice that I follow.

Invest in funds rather than stocks. You gain a lot of diversity that helps hedge risk. Even if you buy funds that are losing money from day to day, keep buying. Open an account with ING or Fidelity. They will manage your money for you and take a lot of the guess work out of it. Just keep it in there and let the market work. My year to date performance on my account is -40% right now, but historically it's been around +17% on a good year. Despite the -40%, I'm still contributing the same amount every month and buying MORE stocks than ever with my dollar. When it starts to go up, I'll own more shares in the funds that I've purchased and will ultimately have high returns down the road.

Once the election year passes, things will most-likely stablize. Either way, the funds are designed to add and drop stocks without charging you anything. You'll be diversified and much safer from any one stock taking your money if a company goes under.

When you sit down with your investment advisor, they will ask you a bunch of questions and you can either lock your money up in retirement accounts or put in accounts with little or no penalty if you pull the money out early. Be sure to read the fine print.

-Scar

 

[Saint Nick]

Originally posted by: edro

I am looking for some investment advice.

Well you have come to the right place!

I am going to end up going to talk to other investors, regardless. I was just interested in what you guys thought.

 

[Saint Nick]

Originally posted by: Scarpozzi
Invest in funds rather than stocks. You gain a lot of diversity that helps hedge risk. Even if you buy funds that are losing money from day to day, keep buying. Open an account with ING or Fidelity. They will manage your money for you and take a lot of the guess work out of it. Just keep it in there and let the market work. My year to date performance on my account is -40% right now, but historically it's been around +17%.

Once the election year passes, things will most-likely stablize. Either way, the funds are designed to add and drop stocks without charging you anything. You'll be diversified and much safer from any one stock taking your money if a company goes under.

When you sit down with your investment advisor, they will ask you a bunch of questions and you can either lock your money up in retirement accounts or put in accounts with little or no penalty if you pull the money out early. Be sure to read the fine print.

-Scar

So, when I invest in funds, does that lock my money away until retirement, or does it solely depend on _how_ I invest in these funds? Stock prices have been dramatically decreasing over the past few months... should I still not buy?

 

[dullard]

Any real advisor will ask several questions. The two most important ones are:
1) How much do you have to invest? You said you made $1k/month, but that doesn't mean that you can invest it all. We need to know what you have left over before we can really help you.

2) When do you need the money? Yes, the stock market has many good buying opportunities right now. But, if you need your money in Dec 2009 you probably don't want to go for stocks. Lets say move and buy a house, or a vehicle, or funish an apartment, or have a graduation celebration to Europe, or whatever. What would you do if in that time the stock market was flat or even went down? Would you sell the stocks at a loss? Or would you postpone your big purchase(s)?

Originally posted by: NightDarker
So, when I invest in funds, does that lock my money away until retirement, or does it solely depend on _how_ I invest in these funds? Stock prices have been dramatically decreasing over the past few months... should I still not buy?

It depends. You can have a taxable account and you can get access to your money at any time you want. Or, you can have a retirement account where you really can't easilly get your money until you retire.

 

[SearchMaster]

Originally posted by: dullard
Any real advisor will ask several questions. The two most important ones are:
1) How much do you have to invest? You said you made $1k/month, but that doesn't mean that you can invest it all. We need to know what you have left over before we can really help you.

2) When do you need the money? Yes, the stock market has many good buying opportunities right now. But, if you need your money in Dec 2009 you probably don't want to go for stocks. Lets say move and buy a house, or a vehicle, or funish an apartment, or have a graduation celebration to Europe, or whatever. What would you do if in that time the stock market was flat or even went down? Would you sell the stocks at a loss? Or would you postpone your big purchase(s)?

Originally posted by: NightDarker
So, when I invest in funds, does that lock my money away until retirement, or does it solely depend on _how_ I invest in these funds? Stock prices have been dramatically decreasing over the past few months... should I still not buy?

It depends. You can have a taxable account and you can get access to your money at any time you want. Or, you can have a retirement account where you really can't easilly get your money until you retire.

This is the most important question. If it's >5 years, now is most likely an outstanding time to buy stocks. If you're going to need it sooner than that, it's hard to say what the market will do in the short term.

And you can invest in mutual funds that are not tied to an IRA (retirement).

 

[Saint Nick]

I have probably about $400 a month to invest right now until May, at that point I'll be able to invest probably $1000 a month until August, where it will go back to probably $400 monthly. I will not necessarily need to access my money in December 2009. And, I suppose, when I _need_ to use the money is subjective -- I might need it in a couple years to buy a car, or a house, or something along those lines.

 

[Special K]

Originally posted by: HardcoreRobot
open roth ira, invest in a target or index fund, never look back

Agreed. Go here for more information on this approach:

Bogleheads Forum

 

[rudeguy]

This is a great time to invest!

I just got my 401k statement and it was blank.

No joke.

 

[dullard]

Originally posted by: NightDarker
I have probably about $400 a month to invest right now until May, at that point I'll be able to invest probably $1000 a month until August, where it will go back to probably $400 monthly. I will not necessarily need to access my money in December 2009. And, I suppose, when I _need_ to use the money is subjective -- I might need it in a couple years to buy a car, or a house, or something along those lines.

Honestly, with that little amount, I'd save up the $400/month in a high yield savings account or money market account until May. Then come back and ask again.

Yes, it is possible to buy stocks or funds with only $400 at a time. But, you either have limited selection of funds or you have massive fees. For example, the Vanguard funds are popular since they have good selection and low fees, but you need $3000 minimum to invest. In May you'll have a few thousand dollars to open a good stock market account and a sizable amount each month to add it it.

Yes, until then, you may lose the great buying opportunity that you have with stocks. But, lets face it. Even if the stock market rebounded on January 1st, doubling people's money, you'd only have $400 that doubled. In the game of life, that is peanuts. Hopefully by May, you'll have enough money to make a real difference and we'll have this recent stock market crash better understood.

 

[Scarpozzi]

Originally posted by: NightDarker
So, when I invest in funds, does that lock my money away until retirement, or does it solely depend on _how_ I invest in these funds? Stock prices have been dramatically decreasing over the past few months... should I still not buy?

It depends on how you invest. Your advisor will give you your account options and penalties for withdrawing (if any). They have many different kinds of accounts and options. They can help you manage CDs, bonds, etc... Just ask your advisor what gives you the best risk/reward ratio. For your age, you're better off investing long-term and not pulling your money for a long time. If you start now, you'll be sitting on a lot of money later. If you wait, it will take much more up-front investment to 'catch up'.

My wife is 25 and about to start work next year. We're going to setup an account for her that will pay out in 20+ years. The idea is to have that money setup to supplement our incomes to dampen salary compression that we'll be dealing with in our 40's and 50's.

As for stocks and quick money...The biggest myth in investments is that they pay off overnight with zero risk. It's rare that you'll invest in a startup company or tech stock that will actually be sold off for millions without high risk that the company or stock with fail. Go for a agressive, moderate risk approach for now and switch to a balanced plan when you reach your late 30's/early 40's. As you get older, move more and more of your money into bonds and low risk.

 

[Special K]

Originally posted by: Scarpozzi
My wife is 25 and about to start work next year. We're going to setup an account for her that will pay out in 20+ years. The idea is to have that money setup to supplement our incomes to dampen salary compression that we'll be dealing with in our 40's and 50's.

What exactly do you mean by "salary compression"? Are you saying you expect a pay cut around that age or what?