- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Brand new to Stock Market
Posted on 1/21/16 at 6:15 am
Posted on 1/21/16 at 6:15 am
So, my wife and I were left with a small inheritance(about $50,000) when her dad passed away. We have no debt(besides the house) and are looking to invest this.
We have talked with a friend that is a financial planner, and he gave us the advice to go ahead and invest into mutual funds. One of the one he suggested is The Income Fund of America (AMECX). I'm still wanting to do more research, and I'm still unsure as to how much to spread out the money. I know mutual funds are already doing that, but should you go over multiple mutual funds?? Are mutual funds the best way for us to even go, or should I look at index funds?? There is so much information out there, and while I trust this guy I want to get as many opinions as possible.
And and all help would be appreciated.
We have talked with a friend that is a financial planner, and he gave us the advice to go ahead and invest into mutual funds. One of the one he suggested is The Income Fund of America (AMECX). I'm still wanting to do more research, and I'm still unsure as to how much to spread out the money. I know mutual funds are already doing that, but should you go over multiple mutual funds?? Are mutual funds the best way for us to even go, or should I look at index funds?? There is so much information out there, and while I trust this guy I want to get as many opinions as possible.
And and all help would be appreciated.
This post was edited on 1/21/16 at 6:23 am
12
Posted on 1/21/16 at 6:43 am to DrewDawg13
Well, to start your friend suggested a loaded fund that will cost you over 5% up front (unless it is LW, which I doubt) so you will be in the hole from the get go. I would think with $50k you would want at least 4 funds.
Posted on 1/21/16 at 7:07 am to DrewDawg13
Your buddy is making money off of that fund specifically. That's why he recommended it.
Posted on 1/21/16 at 7:36 am to DrewDawg13
Check out Vanguard. Pick 3-4 index funds and dump it in.
Posted on 1/21/16 at 7:44 am to Delacroix
I would wait until the elections if you want to go the index route.. you could also dollar cost average every month to take some volatility out.
Posted on 1/21/16 at 7:58 am to DrewDawg13
quote:
We have talked with a friend that is a financial planner, and he gave us the advice to go ahead and invest into mutual funds. One of the one he suggested is The Income Fund of America (AMECX)
You might not really be "good" friends. He just saw you as easy money.
Posted on 1/21/16 at 8:34 am to Mr.Perfect
Use it as a great down-payment on a real estate investment.
Posted on 1/21/16 at 9:23 am to Mr.Perfect
Yes I'm well aware of the fee charged in the beginning. What I'm asking for is advice on the difference between mutual and index funds, and any suggestions ya'll have for investing for the first time.
Posted on 1/21/16 at 9:27 am to DrewDawg13
That mutual fund has a front load, expense ratio(albeit a fair one considering it's an active managed fund) and then likely some kind of management fee to the advisor each year. He also can't guarantee this fund or his advice would beat an index fund over the long term. That's why I and a lot of people prefer index funds with hardly any fees. Take the market gains and forget it.
Posted on 1/21/16 at 9:41 am to DrewDawg13
It looks like it is a fairly conservative fund with a number of good stocks and low duration bonds. However the 5.75% load is a deal breaker for me.
Posted on 1/21/16 at 9:43 am to jimbeam
quote:
Brand new to Stock Market by jimbeamThat mutual fund has a front load, expense ratio(albeit a fair one considering it's an active managed fund) and then likely some kind of management fee to the advisor each year
I highly doubt this is the case. If he was charging an annual fee then he would use a load waived A share if he used an A share. A typical A share will pay him .25% ongoing but he will not charge a management fee on top of a load.
At least one would hope not.
Posted on 1/21/16 at 9:54 am to Janky
I mean if his advisor does his reinvestments and such then he's going to charge him
Posted on 1/21/16 at 9:58 am to jimbeam
I must not be understanding what you are trying to explain. What do you mean by reinvestments?
Posted on 1/21/16 at 9:58 am to jimbeam
It doesn't appear, based on the OP, that the guy is his financial advisor, just that he talked to a friend that is a financial planner and that's what he suggested. Unless the guy has an acct opened with his investment firm or whatever, then I don't see how he would get the fees for it.
Posted on 1/21/16 at 10:00 am to AUtigerNOLA
If he buys AMECX he will have to pay the front load to someone.
Posted on 1/21/16 at 10:02 am to Janky
Someone, whoever the manager of that fund is, but him specifically? How would we know that?
Posted on 1/21/16 at 10:06 am to AUtigerNOLA
Who cares who he has to pay the load to. The fact is he will pay the load to someone and start in the hole.
Posted on 1/21/16 at 10:12 am to DrewDawg13
quote:
Yes I'm well aware of the fee charged in the beginning. What I'm asking for is advice on the difference between mutual and index funds, and any suggestions ya'll have for investing for the first time.
There isn't one. Most index funds are mutual funds. An index fund simply means it tracks an entire index (DJI, total US, etc). As you seem to know very little about investing (I don't mean this as an insult, just as a statement of fact), open a Roth IRA with Vanguard, set up an automatic investment plan into VTSMX, click the "maximize my contribution" button and set the frequency to weekly.
That way, you'll dollar cost average your way through the next clusterfrick of a year by buying into the entire US domestic stock market one week at a time. You have neither the knowledge nor expertise to complicate things beyond that.
This post was edited on 1/21/16 at 10:14 am
Posted on 1/21/16 at 10:17 am to Delacroix
I'm interested in this topic as well, thanks for all of the contributions from the knowledgeable posters. I have a few follow up questions.
VTSMX / VTSAX seems to be a popular index fund on here. Is that primarily due to its low expense ratio?
If you start out in VTSMX and build up a large enough holding to qualify for the $10K VTSAX minimum, how do you convert the account to VTSAX (sell and reinvest? automatic transfer?)?
If VTSMX/VTSAX covers the "total stock market", why would you want or need to pick 2 or 3 additional index funds to spread the money across?
With index funds in a Vanguard account can dividends automatically be set up to be re-invested?
Mutual funds are already going to be pretty diverse, right? Why do you suggest investing in 4 or more? Are you suggesting a variety of more narrowly focused funds?
ETA, I also fall into the "knows very little about investing" category joshjrn described
quote:
Check out Vanguard. Pick 3-4 index funds and dump it in.
VTSMX / VTSAX seems to be a popular index fund on here. Is that primarily due to its low expense ratio?
If you start out in VTSMX and build up a large enough holding to qualify for the $10K VTSAX minimum, how do you convert the account to VTSAX (sell and reinvest? automatic transfer?)?
If VTSMX/VTSAX covers the "total stock market", why would you want or need to pick 2 or 3 additional index funds to spread the money across?
With index funds in a Vanguard account can dividends automatically be set up to be re-invested?
quote:
I would think with $50k you would want at least 4 funds.
Mutual funds are already going to be pretty diverse, right? Why do you suggest investing in 4 or more? Are you suggesting a variety of more narrowly focused funds?
ETA, I also fall into the "knows very little about investing" category joshjrn described
This post was edited on 1/21/16 at 10:20 am
Posted on 1/21/16 at 10:20 am to Janky
Dividend reinvestments. I thought you could only get into these funds through an advisor?
Page 1 of 3
Popular
Back to top
Follow TigerDroppings for LSU Football News