question about investing $2k

[zixxer]

Is 2k enough to invest into mutual funds or anything? if so, what?

 

[sygyzy]

Yes of course it is. You can invest $2000 in anything you want. With some funds there are minimums. Lower if you buy them with an IRA usually.

 

[slycat]

fidelity looks mighty good...

 

[ggavinmoss]

Well what kind of investment is this? Short term? Mid-term? Retirement?

-geoff

 

[marquee]

From what I hear, index funds are a much better investment than mutual funds. The cost of operating a mutual fund is higher (you're paying for active management) and as a result, your returns are usually 2% lower than the stock market average (which index funds pretty much emulate).

 

[dirtboy]

2k is plenty of money to buy a good mutual fund. Seek out a good mutual fund and don't be one of the many sheep who think index funds are all that -- a good mutual fund should have no trouble outperforming an index.

 

[Storm]

Originally posted by: dirtboy
2k is plenty of money to buy a good mutual fund. Seek out a good mutual fund and don't be one of the many sheep who think index funds are all that -- a good mutual fund should have no trouble outperforming an index.

Then what are the criteria for a good mutual fund as opposed to a good index fund?

 

[dirtboy]

Originally posted by: Storm
Then what are the criteria for a good mutual fund as opposed to a good index fund?

I look at the 10 year performance.

 

[Storm]

Originally posted by: dirtboy

Originally posted by: Storm
Then what are the criteria for a good mutual fund as opposed to a good index fund?

I look at the 10 year performance.

You're looking at the past 10 year's performance?

If you are thats what gets me... Past performance doesn't necessary dictate future performance?

 

[dirtboy]

Originally posted by: Storm
You're looking at the past 10 year's performance?

If you are thats what gets me... Past performance doesn't necessary dictate future performance?

You're right, past performance doesn't dictate future performance. Unfortunately I don't have a crystal ball to look at future performance with.

Look at it this way... Say you're assigned the task of hiring a new salesperson. You decide to interview three people. Their performance is as follows...

Salesperson A: Moved 10 million dollars worth of products per year for the past 10 years.
Salesperson B: Moved 1 million dollars worth of products per year for the past 10 years.
Salesperson C: Sold nothing.

Who are you going to hire? I'd think A would be a good person to start with.

Same with mutual funds. Find one with a good long term track record and you'll find a fund with a good investment philosophy and excellent fund managers.

 

[Hector13]

Originally posted by: dirtboy
2k is plenty of money to buy a good mutual fund. Seek out a good mutual fund and don't be one of the many sheep who think index funds are all that -- a good mutual fund should have no trouble outperforming an index.

is that why so many of them (more than half) lose to their benchmarks.

 

[dirtboy]

Originally posted by: Hector13

Originally posted by: dirtboy
2k is plenty of money to buy a good mutual fund. Seek out a good mutual fund and don't be one of the many sheep who think index funds are all that -- a good mutual fund should have no trouble outperforming an index.

is that why so many of them (more than half) lose to their benchmarks.

Maybe you should say, is that why more than half outperformed their benchmark.

 

[Kenazo]

you could always buy some Berkshire hathway shares. Or 1,

 

[sac19143]

 

[Hector13]

Originally posted by: dirtboy

Originally posted by: Hector13

Originally posted by: dirtboy
2k is plenty of money to buy a good mutual fund. Seek out a good mutual fund and don't be one of the many sheep who think index funds are all that -- a good mutual fund should have no trouble outperforming an index.

is that why so many of them (more than half) lose to their benchmarks.

Maybe you should say, is that why more than half outperformed their benchmark.

huh? why would I say that?

 

[Storm]

Originally posted by: dirtboy

Originally posted by: Storm
You're looking at the past 10 year's performance?

If you are thats what gets me... Past performance doesn't necessary dictate future performance?

You're right, past performance doesn't dictate future performance. Unfortunately I don't have a crystal ball to look at future performance with.

Look at it this way... Say you're assigned the task of hiring a new salesperson. You decide to interview three people. Their performance is as follows...

Salesperson A: Moved 10 million dollars worth of products per year for the past 10 years.
Salesperson B: Moved 1 million dollars worth of products per year for the past 10 years.
Salesperson C: Sold nothing.

Who are you going to hire? I'd think A would be a good person to start with.

Same with mutual funds. Find one with a good long term track record and you'll find a fund with a good investment philosophy and excellent fund managers.

Ok that makes sense but what would be the standard term for sales? Also what would be the term for debt. I suppose I would also want to consider a ciompany with low debt and not too many loans?

 

[dirtboy]

Originally posted by: Storm

Ok that makes sense but what would be the standard term for sales? Also what would be the term for debt. I suppose I would also want to consider a ciompany with low debt and not too many loans?

I'm not really sure I understand what you're trying to say.

 

[Storm]

Originally posted by: dirtboy

Originally posted by: Storm

Ok that makes sense but what would be the standard term for sales? Also what would be the term for debt. I suppose I would also want to consider a ciompany with low debt and not too many loans?

I'm not really sure I understand what you're trying to say.

Whats the official terminology they use in the industry is there another name of two I listed in the previous post?

 

[Hector13]

Originally posted by: dirtboy

Originally posted by: Storm
You're looking at the past 10 year's performance?

If you are thats what gets me... Past performance doesn't necessary dictate future performance?

You're right, past performance doesn't dictate future performance. Unfortunately I don't have a crystal ball to look at future performance with.

Look at it this way... Say you're assigned the task of hiring a new salesperson. You decide to interview three people. Their performance is as follows...

Salesperson A: Moved 10 million dollars worth of products per year for the past 10 years.
Salesperson B: Moved 1 million dollars worth of products per year for the past 10 years.
Salesperson C: Sold nothing.

you should also make sure that the portfolio manager at the fund is the same person who has been having the good returns. 10 years is a long track record for one fund manager at the same fund.
Who are you going to hire? I'd think A would be a good person to start with.

Same with mutual funds. Find one with a good long term track record and you'll find a fund with a good investment philosophy and excellent fund managers.

 

[anxman69]

I've got quite a bit of investing experience, and I've made a lot of the mistakes that beginners make. From my experience, I HIGHLY recommend that you read a book titled, "A Random Walk Down Wall Street" before you undertake any investing.

It will save you a lot of running around, and give you the best focus for investing. It is considered the bible of investing, and is on the reading list for many of the top bschools.

-Ankur