I am young and I want to start investing my money although I don’t really know where exactly to get started. Can anyone give me some good tips or books to read to become more informed.
Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. The links below have on-line questionnaires which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of investment.
You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual Funds should have expense ratios of less than 0.5%.
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. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be good all-in-one stock and bond funds for an IRA. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.
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.
I will warn you that there is a tremendous amount of stock Investing books and websites that teach stock investing strategies that don’t work. Particularly bad are people that teach "technical analysis" systems that sound impressive, but don’t work.
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.
(all links are to non-profit groups or to Yahoo sites. None are solicitation)
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics
http://www.vanguard.com/VGApp/hnw/planningeducation
http://sec.gov/investor/pubs/assetallocation.htm
http://www.bogleheads.org/wiki/Main_Page
Asset Allocation Calculators:
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
Head to the public library where there will be a section on money management and investing. Pick up two or three basic investment books. Read them to understand how the market works. Then head back to the library and get two or three books on stock analysis which will help you learn how to pick stocks for investment.
Remember, invest only money that you can afford to never see again.
References :
Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. The links below have on-line questionnaires which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of investment.
You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.5%.
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. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be good all-in-one stock and bond funds for an IRA. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.
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.
I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don’t work. Particularly bad are people that teach "technical analysis" systems that sound impressive, but don’t work.
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.
(all links are to non-profit groups or to Yahoo sites. None are solicitation)
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics
http://www.vanguard.com/VGApp/hnw/planningeducation
http://sec.gov/investor/pubs/assetallocation.htm
http://www.bogleheads.org/wiki/Main_Page
Asset Allocation Calculators:
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
References :
(all links are to non-profit groups or to Yahoo sites. None are solicitation)
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics
http://www.vanguard.com/VGApp/hnw/planningeducation
http://sec.gov/investor/pubs/assetallocation.htm
http://www.bogleheads.org/wiki/Main_Page
Asset Allocation Calculators:
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
watch for some time .slowly learn , then invest.do not barrow and invest.
References :
Hey, why don’t you try stock newsletters?
Their stock picks are usually picked by professional stock traders or ex-stock brokers.
They do the fundamental and technical analysis to pick the right stock.
And I SWEAR it’s the BEST investment I ever made! I’ve made $47350 so far since I subscribed to their stock newsletter a few months ago.
The best part was I threw my resignation letter at my boss’s face and showed him the middle finger.
Check it out here: http://alturl.com/8erb
It’s guarantee to work! If you don’t believe me, read this official report:
http://www.pennystockprophetreviews.com/
References :
yea, you want to diversify, but you also want to find someone that is qualified to give you advice. Something tells me that Yahoo answers is not the place to look.
Search for a mentor, is the best advice I can give you. Someone who has proven to be successful in trading stocks.
References :
http://www.goodstockstoinvestin.org