Find solution
Theme parks that have stocks on the NYSE or Mutual Funds?

23 years old, planning to save $10k a year. Stocks or Mutual funds?

  • I am 23 years old, work in Research/Development at a financial firm, also bartend on TH/F/S. I could possbily save up to $20k a year, but will realistically set my goal at $10k. Should I invest in Mutual Funds or Stocks? Stocks take a lot of work/time to research that maybe I don't have... But will Mutual funds score me lower % gains? Should i hire a professional or read books/buy an online e-letter like Zack's Elite, and try to figure it out myself?

  • Answer:

    You should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund. 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. 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. 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. Sources: http://www.vanguard.com/VGApp/hnw/planningeducation http://www.fool.com/school.htm http://sec.gov/investor/pubs/assetallocation.htm http://www.diehards.org/readsites.htm http://finance.yahoo.com/education/begin_investing http://finance.yahoo.com/funds/basics Asset Allocation Calculators (Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.) https://flagship.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 http://www.ifa.com/SurveyNET/index.aspx Web forum: http://www.diehards.org/ (Many investment web forums are overrun by scam artists. This one seems the most legitimate site.) 529 plans: http://www.savingforcollege.com

scm4158 at Yahoo! Answers Visit the source

Was this solution helpful to you?

Other answers

wow thats great....I would go with mutual funds...hire an advisor they will figure what funds to put u in

pickles

Mutual funds is what I would pick. You can choose some very aggressive growth funds and do well. I would also consider a Roth IRA. This protects your money from being taxed but allows some control over how you invest. Stocks are great if you pick a winner but remember the income from this is taxable and perhaps not as a great of deal as one would think. I'm sure there are a lot of opinions out there, this is just from my own experience as an average joe : )

George H

Go with mutual funds. The majority of mutual funds don't beat the index, however, so I'd go with a low cost - Vanguard is great at low cost- index fund of the whole market. Dollar cost avg. your way in. Vanguard.com. You've got a great position being 23 y.o. & having the income & discipline to do that.

Chris N

you want a business loan learn about to getting quick business loan see the information you are exited http://www.quickbusinessloan.blogspot.com

karnan c

I wouldn't invest in either right now. The market is going to take dramatic hits as the "strong economy" the experts are touting is shown to be a recession. Keep in mind these "experts" are the same guys who a year ago continued to tell people to buy more home than they could afford and kept the builders building. They said the downturn in sales was a "glitch". In some areas home values have dropped over 20% in this past year. Great advice "experts". Yet, here we are a year later listening to the "everything is fine, the stock market is strong" BS they are touting now. Fools. Overpaid, under thinking, government dupes and fools. Invest in bonds for the next year or so and see what happens, then when the market crashes, buy low when everyone else is panicking and selling. If I had an extra $10k that is what I would do. As a matter of fact I am thinking about cashing out my 401(k) and taking the penalties while they are still worth something. I have a feeling that the losses I take in taxes will be less than the losses I take in the stocks & mutual funds my plan invests in.

Gem

I recommend to start with Mutual funds .. and then take on stocks once you are familiar with investing .. Read more on this here .. http://creating-wealth.blogspot.com/

Nidhi

Well I first have congratulate you. Good for you. You are being smart about starting your savings for the future now. But first lets get the ideals that have been toted around the web out of here. 1) you are young enough to invest in some risky ventures. So first if you have 10k to invest you want atleast 25% of that in mutual funds. That is ata minimum. 2) you need to put about 10-15% into bonds. They will be a stable source to keep some money in. 3) Stocks a great way to make your portfolio grow. Split up the rest amongst long term and short term stocks. Long term being companies that have consistently perfomed well. Not too many that don't get affected by market ups and downs. But there are a few, but use your head, if everyone uses it and it has been around for a while check it out. 4) the short term investments are the new companies that look good and have not been around too long. Like for example I bought moviegallery in 06' for 1.85 and sold this year for 2.35 before the bottom dropped out and did good. It means you will have to have an active roll in your investments but it is worth it. So do your homework. This is by no means exactly what you should do but it is a good starting point you are young enough to take some risks with your money, but don't be fooled by a temporary up swing in the market. DO YOUR HOMEWORK! look at how the stocks have performed and their trends over the last year or so. Then make sure you setup your investments so that you have control of your money. Don't let someone else run it for you. Because then if you make the mistake you are at fault not some schmuck who should have been looking out for you but didn't stay on the ball. Wealth is not made by those who turn controll over to someone else it is created by those who have the control. Also, ask questions, don't be affraid to ask for help, just ask from everyone like you have done here. You are on the right path! Good luck! May you retire young!

thumpsterally

try commodity future ith chart

dinu_pawar

Mutual funds are definitely the easy way to go. Investing is a very interesting and challenging hobby, but if you don't find it enjoyable you'll probably just do a lot of work to get the same return you'd get from putting your money into an index fund and walking away. I invest directly (I enjoy it a lot) but I advise others to put their money into no load index or exchange traded funds (note--most pros just shoot for about the market average from what I can tell, so there's no point in paying them) and just let the money ride.

Adam J

Load more

Related Q & A:

Just Added Q & A:

Find solution

For every problem there is a solution! Proved by Solucija.

  • Got an issue and looking for advice?

  • Ask Solucija to search every corner of the Web for help.

  • Get workable solutions and helpful tips in a moment.

Just ask Solucija about an issue you face and immediately get a list of ready solutions, answers and tips from other Internet users. We always provide the most suitable and complete answer to your question at the top, along with a few good alternatives below.