Lux Investing
Where is a good place to start for beginner investors?
I have some extra money that I wanna invest to make more money. Where should I start? What kind of investing is good for beginners. Thankyou for your answers!
Public Comments
- Go to Investopedia.com and read the tutorials.
- I am also a beginner and after researching from days have came to a conclusion: that stock market is the best option, but its very risky for beginners like us so in order to learn about this big game of making money..we have to start from basics, which are mutual funds. Some people have suggested with some useful websites. I am working on them and you can also have a look. most imp. source is vanguard for mutual funds http://www.vanguard.com http://www.lucky-dog-investing.com... http://www.investopedia.com http://www.motleyfool.com
- I would suggest you to open an account at Scottrade, and buy a few shares of SPY and GLD. Two months later, repeat. Buy again. If you continually invest some money in these two funds, your money will grow. Just remember, don't sell your shares no matter how terrible catastrophy or disaster happens. If you sell your shares in a panic, you'll lose your money. You'll have more money if you do not sell your shares. SPY is the S&P500 index fund. When you invest in SPY, you are buying the 500 best American companies. GLD is the gold index fund. Ten shares of GLD = 1 oz of pure gold. In the past 20 years, the S&P 500 index appreciated 400%: http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?style=320&size=2&freq=1&symb=SPX&startdate=01/01/1987&type=128 In the past 20 years, gold appreciated about 70%. In other words: In the past 20 years, the US dollar lost almost half of its value compared to gold. This chart shows the price of gold in the past 20 years: http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?style=320&size=2&freq=1&symb=38099902&startdate=01/01/1987&type=128 If you turn the chart upside down, you'll see how the dollar has lost its value against gold.
- First of all, Congratulations!!! Investing is a big and responsible step that will help secure your future. The first thing you want to do is figure out how much risk you are willing to take. Higher risk investments can have hefty gains, but you can also lose it all. Is this a game you are willing to play? Or, would you like to earn a guaranteed income that might not pay so much but will definitely net you a profit in the end? Savings accounts with interest are the safest of all, but the interest rates are so low these days, its hardly worth it. I found CD's and Money Market accounts to be good to start with... higher interest rates than savings, but fairly certain gains (usually definite with CD's.) Then there are riskier propositions like stocks, etc. These can be difficult to get started in because you often have to have a broker or pay a fee to use an online investment company. Also, it truly is gambling. If you do want to give stocks a go, a solid blue chip might be a good way to start. (A solid company that's been around for years and has a steady history of turning a profit.) Even if you can only afford say... 2 shares, its a good ground floor to get in on. In my opinion, be sure to re-invest your dividends. Otherwise you'll get a random check every now and then for a few dollars that you'll be tempted to forget about and not ever cash. If you re-invest, the money will automatically go to buying you more stock. It will compound your earnings faster. I would highly recommend signing up for Motley Fool. (motleyfool.com) I was totally intimidated when I first started investing, and the website helped a lot. The website is all about investing. They update constantly and send out monthly newsletters (electronic). Its one place that I found that spoke about money in a way that I understood (slightly dumbed down and it felt like a person was writing the articles, not a calculator.) Whatever you do, ALWAYS read the fine print. Find out if the investment opportunity is insured. Get all of the information and never feel like you can't ask questions. If anyone tries to put you off, or won't answer your questions. Walk away. If it seems to good to be true. It is. Walk away. Make a list of questions to yourself before you begin so you know what you need, too. What level of risk am I willing to take? Is this a long term or a short term investment? Do I need to have access to this money? Am I ok with being locked into terms for X amount of time? etc. Good luck to you.
- If you are interested in small caps, try: http://finance.groups.yahoo.com/group/TradingZoom/ - check out the books listed on the front page and learn the rest from people who are doing it right now.
- Here are some principals to maximize your investments: 1) Educate: Learn about stocks, bonds and mutual funds Here is a place to start http://www.bobbrinker.com/pitopics.asp?tpgs=6&sub=-1313657161&tut=950141844&pg=2 2) Diversify: Spread your risk among many companies or bond funds. Index funds are best...As an example vanguards total stock market index fund invests in every stock in the US market. There is no commission, No load(or upfront or back end charge) and .25 % management fee. That is $2.50 cents per thousand you invest per year.... 3) Be frugal:: Buy only no load low expense funds. paying commissions reduces your returns. Total expense on the fund is key...there are all types of fees companies charge...avoid all of them! Buy from a no load, low expense mutual company! 4) Use a low cost mutual fund company -True mutual fund companies are low expense, no commission and are owned mutually by investors...The best of the best is Vanguard, but Fidelity is also good. check this https://flagship.vanguard.com/VGApp/hnw/faces/JSP/Funds/fundexpress/fundshortlistContent.jsp Midigate timing risk: Dollar cost average: Invest small amounts on a monthly basis into the mutual fund Lastly: Use a low tax approach: Open an Roth IRA with Vanguard -This will be tax free upon retirement
- First, open a brokerage account. Once you have the account number you can fund it by writing a check and mailing it to the brokerage, set up automatic transfers from you checking account, or drop in and deposit directly. I have/had accounts with Fidelity, Schwab, Scottrade, and eTrade and have had no problems with any. Next, I would recommend reading William O'Neil's "The Successful Investor" as a good starting point. Follow that up with Peter Lynch's "Beating the Street". That should provide you with two strategies that you can learn from in building your own investment strategy. Other good books include "The Motley Fool Investment Guide" by Tom and Dave Gardner or "Real Money" by James Cramer. I have read all these books and many others and devised a strategy that adopts a bit from each one. Another thing you can do is invest using a fictional portfolio. Let that run for a few months to see if you are ready to start trading with real money. In the meantime, invest in mutual funds. Once you are ready, sell the fund and invest on your own. Remember, the time spend learning about investing is far less then the money lost by not being prepared. ---
- The best place to start is education, read some books etc, or try this cousre very easy to understand and follow a great base to start trading in any form and to see if trading is for you
- Mutual funds are an easy way to invest in stocks and bonds. However, to specifically answer your question, we will need two important pieces of information: 1) Your goal for this money? 2) Your time horizon? For example, if you want to invest for college in 3 years, our answer will be dramatically different than if you want to invest for retirement in 30 years. Check the following books for more info: 1) Mutual Funds for Dummies, by Eric Tyson. This is the quintessential beginner's book. 2) I have a free downloadable book at http://www.invest-for-retirement.com 3) http://www.investopedia.com has excellent tutorials
