I currently hold $500 in my Roth IRA as I made my first contribution last summer. I plan to put $500 (or more) in this summer.
So once I get a 401k, start concentrating on that more so than the Roth IRA
I currently hold $500 in my Roth IRA as I made my first contribution last summer. I plan to put $500 (or more) in this summer.
So once I get a 401k, start concentrating on that more so than the Roth IRA
Until you get a job that offers a 401k, max out your IRA every year. Once you get a job that offers a 401k, max out both the 401k and your IRA. If you can't afford to do both, contribute at least to the company match in the 401k first.
Assuming there are no penalties or cost to not investing more into AGTHX, I'd stop doing so and try to max the IRA. I don't know what type of investment you have in your current IRA. But from the amount you say you can contribute you generally want one mutual fund. In that case, you should consider a no load total stock market fund or a balanced fund. Try to avoid load funds. Get that Tyson book and go to the Morningstar site; read at least the Vanguard Diehards forum. Good luck on your financial future and if you can't pay off your credit card every month, don't use it.
Assuming there are no penalties or cost to not investing more into AGTHX, I'd stop doing so and try to max the IRA. I don't know what type of investment you have in your current IRA. But from the amount you say you can contribute you generally want one mutual fund. In that case, you should consider a no load total stock market fund or a balanced fund. Try to avoid load funds. Get that Tyson book and go to the Morningstar site; read at least the Vanguard Diehards forum. Good luck on your financial future and if you can't pay off your credit card every month, don't use it.
Well, here's my investing advice... take it for what it's worth. 
I started investing when I was 21 (just shy of 24 now), shortly after I had gotten a full-time job with a 403b while I was still a student. (I work at a university.) I did a ton of research and reading before I started (along with the other books already mentioned, check out the classic A Random Walk Down Wall Street), which helped me develop my index-only investment plan.
One of the most important things in investing is to not let your emotions become involved. Of course, this is also one of the most difficult things about it. Everybody hurts when they see their investments dropping in value. That's why developing a solid investment plan is so important. You have to understand your tolerance for risk, and then invest accordingly. This won't make the pain of seeing a declining asset base any less, but at least it won't give you a heart attack because you knew this was possible. Having a clearly dilineated plan promotes discipline -- that's why setting up auto-investing is so useful. It's a lot harder to write that check to buy more shares when you see your folio dropping every month.
I'm not a fan of any funds that have loads, so I don't like AGTHX. That said, I wouldn't pull out just because a fund has been declining. That's not a good reason to jump ship, tempting as it probably is. I think you should really pause and develop a clear investment plan with goals and risk tolerance before going any further. Doing so will probably help you answer your own question.
As for diversification: It's always good to be as diversified as possible, but given your limited funds, you can probably wait until you're working full-time before adding more diversification.
Have you ever looked into index investing btw?
As has already been mentioned by a few, checking out morningstar.com for a ton of good, helpful advice. It was an invaluable resource for me when I was first starting out.
I started investing when I was 21 (just shy of 24 now), shortly after I had gotten a full-time job with a 403b while I was still a student. (I work at a university.) I did a ton of research and reading before I started (along with the other books already mentioned, check out the classic A Random Walk Down Wall Street), which helped me develop my index-only investment plan.
One of the most important things in investing is to not let your emotions become involved. Of course, this is also one of the most difficult things about it. Everybody hurts when they see their investments dropping in value. That's why developing a solid investment plan is so important. You have to understand your tolerance for risk, and then invest accordingly. This won't make the pain of seeing a declining asset base any less, but at least it won't give you a heart attack because you knew this was possible. Having a clearly dilineated plan promotes discipline -- that's why setting up auto-investing is so useful. It's a lot harder to write that check to buy more shares when you see your folio dropping every month.
I'm not a fan of any funds that have loads, so I don't like AGTHX. That said, I wouldn't pull out just because a fund has been declining. That's not a good reason to jump ship, tempting as it probably is. I think you should really pause and develop a clear investment plan with goals and risk tolerance before going any further. Doing so will probably help you answer your own question.
As for diversification: It's always good to be as diversified as possible, but given your limited funds, you can probably wait until you're working full-time before adding more diversification.
Have you ever looked into index investing btw?
As has already been mentioned by a few, checking out morningstar.com for a ton of good, helpful advice. It was an invaluable resource for me when I was first starting out.
Spider (S&P500 Index Fund) = SPY
One of the best buy&hold stocks out there.
Incidentally there's an equally weighted S&P fund that came out just today which trades under RSP.
One of the best buy&hold stocks out there.
Incidentally there's an equally weighted S&P fund that came out just today which trades under RSP.
should be SPY, I believe. The S&P is only 500 stocks though (and all obviously large cap names). You might want to look at a Russel 1 or 3 fund as well. Also, unless you are planning on day trading (bad idea), you might be better off with a fund over an ETF (transaction costs wise).
Am currently in the ending of my thirds year in college. My management teach suggest that at this stage in life(College Student) that we should invest in ROTH IRAs. I was planning to sit down at Washington Mutal Bank and speak to them about the IRA accts. Can someone please give me some more info?
thank you
thank you
Get <U>Mutual Funds for Dummies</U> by Eric Tyson. Read the forums at Morningstar.com, Vanguard Diehards. Read the online book at: www.fee-only-advisor.com/book.cfm ; look at Portfolio 5 in Ch. 12. You want to max your ROTH IRA every year (currently $3000) and max out your company retirement plan. WM has load funds. You should try to avoid load funds. One fund, a no load total stock market index fund or a balance fund is a good place to start for most anyone
why is spy a good buy... because it wont go down?
i mean, at that share price though... you'd only realize tangible gains if you buy a few hundred shares...
which you cannot do unless you plan to have around 10k to put in that... and you would want to diversify... meaning you would have another 30k to put into other things... meaning you have to want to have around 40k to play with....
i mean, at that share price though... you'd only realize tangible gains if you buy a few hundred shares...
which you cannot do unless you plan to have around 10k to put in that... and you would want to diversify... meaning you would have another 30k to put into other things... meaning you have to want to have around 40k to play with....
whoah... I think I'm gonna agree with alrocky here and suggest you get a basic investment book before you do anything. There are no risk free investments in the stock market (other than some sort of synthetic treasury or something). Do not buy SPY or any other stock/ETF becuse someone tells you it "wont go down".
As for share price, it has nothing to do with realizing "tangible gains". If a $20 stock goes up 10% ($2), it the same thing as a $4000 stock going up 10% ($40). In each case, no matter how much you invested, you will gain 10% on it.
As for deversifying, SPY was suggested above because it represents the gains/losses (yes there can be losses) of the S&P 500 (a weighted index of 500 stocks). So it is like buying into 500 stocks. It is a good idea, but I still think you should look into a broader market index (like a russell 1 or even the whilshire 5000). Also, unless you specifically want an ETF, you should really consider getting a mutual fund. You will find a lot bigger selection of different index funds vs. ETFs.
first, i would not speak about diversifying if I did not know stocks come with risk.
no no, you're missing the whole point.
if you only had 900bucks to invest, then you can only buy about 10 shares of SPY, at its current price of about 90 per share.
brokerage fees could be around 20bucks on top of that.
also, you will need to wait till the share price of SPY gains 2bucks ea. share above your purchase price of each share
to recover your transaction cost.
if you take the same 900 bucks and buy say a 30dollar per share stock instead, you're going to be able to buy what, 30 shares.
all you need here is for this 30dollar stock to rise to 31dollars per share, just 1 dollar, and your bucket will be worth 930, already covering your transaction cost and gaining 10bucks of profit.
Even if I had 3k or 5k, I feel it's not enough money to buy SPY or any stock that is 90 pershare to get enough kick. i rather try to research a stock that hovers in the 20-50 dollar range where i can acquire more shares.
no no, you're missing the whole point.
if you only had 900bucks to invest, then you can only buy about 10 shares of SPY, at its current price of about 90 per share.
brokerage fees could be around 20bucks on top of that.
also, you will need to wait till the share price of SPY gains 2bucks ea. share above your purchase price of each share
to recover your transaction cost.
if you take the same 900 bucks and buy say a 30dollar per share stock instead, you're going to be able to buy what, 30 shares.
all you need here is for this 30dollar stock to rise to 31dollars per share, just 1 dollar, and your bucket will be worth 930, already covering your transaction cost and gaining 10bucks of profit.
Even if I had 3k or 5k, I feel it's not enough money to buy SPY or any stock that is 90 pershare to get enough kick. i rather try to research a stock that hovers in the 20-50 dollar range where i can acquire more shares.
I still don't follow. Don't think of things in terms of "dollar gains", think in terms of percentages. A $1 gain on a $30 stock is about 3.33%. A 3.33% gain on a $90 stock is $3 (more than the $2 in your example above). So, if we assume both stocks go up 3.33%, and your commission in each case is the same, you will end up making the same amount of money whether the stock's price starts at $30, $90, or $4000.
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