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Started By
Message
Rookie Seeking Advice
Posted on 2/28/13 at 9:12 am
Posted on 2/28/13 at 9:12 am
I'm 24 and I have never truly sat down and researched the basics of investing, until the last few months. I have saved 3,500 since getting my first 'real job' and I really want to be able to do something with that besides put it into a savings acct at .9% 
My employer does not provide any retirement plan so I was leaning toward opening a Roth. I also want to open a regular account and try my hand at making a few monthly trades. However, my confidence level in our current economy is pretty low. I am very back and forth each time I go to open a Roth, after all, if everything is going to plummet what is the point in putting the money in now?
So, I'm turning to some folk's with experience. Any and all opinions are welcome and I greatly appreciate the help.
My employer does not provide any retirement plan so I was leaning toward opening a Roth. I also want to open a regular account and try my hand at making a few monthly trades. However, my confidence level in our current economy is pretty low. I am very back and forth each time I go to open a Roth, after all, if everything is going to plummet what is the point in putting the money in now?
So, I'm turning to some folk's with experience. Any and all opinions are welcome and I greatly appreciate the help.
7
Posted on 2/28/13 at 9:23 am to arcsaints42
The most important thing to know (and you're a perfect example of someone who can take advantage of this principle) is NOT timing the market. It's time IN the market.
Open your Roth, before congress outlaws them, buy a stock that has a history of revenue, profit and dividend increases and reinvest the dividends and go away for 40 years (unless news comes out detrimental to the company you've bought, in which case you sell and find another company).
Or if you think owning just one company carries too much risk for your risk appetite, buy a proven "Growth + Income" mutual fund and reinvest the dividends.
Open your Roth, before congress outlaws them, buy a stock that has a history of revenue, profit and dividend increases and reinvest the dividends and go away for 40 years (unless news comes out detrimental to the company you've bought, in which case you sell and find another company).
Or if you think owning just one company carries too much risk for your risk appetite, buy a proven "Growth + Income" mutual fund and reinvest the dividends.
Posted on 2/28/13 at 9:27 am to LSURussian
quote:
The most important thing to know (and you're a perfect example of someone who can take advantage of this principle) is NOT timing the market. It's time IN the market.
That is very nicely put. Never heard it like that before. You sir, are a gentleman and a scholar.
Posted on 2/28/13 at 9:35 am to arcsaints42
If you're hesitant to invest because you're scared the market will drop right after you buy, you're looking at investing the wrong way. You have no idea what the market is gonna do tomorrow, and neither do I, but I'm not worried about it.
You don't invest money in equities if you can't afford to leave it alone for at least 5 years.
If you're going to panic when the market crashes and 50% of your nest egg is gone, you're going to lose money every time you invest.
Good that you want to start young, and at 24, $3500 seems like a lot of money to risk. But even with a boring old Vanguard Index fund, if you didn't invest another penny the rest of your life, will grow to Approximately $390,340.86 at age 65*. You can do better than that though, But you have to get in the game, time is of the essence.
*Based on historical S&P averages.
You don't invest money in equities if you can't afford to leave it alone for at least 5 years.
If you're going to panic when the market crashes and 50% of your nest egg is gone, you're going to lose money every time you invest.
Good that you want to start young, and at 24, $3500 seems like a lot of money to risk. But even with a boring old Vanguard Index fund, if you didn't invest another penny the rest of your life, will grow to Approximately $390,340.86 at age 65*. You can do better than that though, But you have to get in the game, time is of the essence.
*Based on historical S&P averages.
This post was edited on 2/28/13 at 9:37 am
Posted on 2/28/13 at 10:11 am to arcsaints42
I'm sure they are well more qualified people on this board to give you advice but I would like to lend my thoughts:
I would open up the Roth with Fidelity. Check out the mutual funds. See how they are rated(I believe they use morningstar ratings) and how they have performed in the market over time. Vanguard and PIMCO funds are the ones I would highly suggest. If you want to invest in individual stocks, take Russians advice. If you want to invest in a pool of funds with less risk, look at mutual funds.
What I do is examine the funds that are available and pick the ones with a solid rate of return over their history and what industry/stocks/bonds these funds are invested in. You want to be able to see how these funds perform on market downturns and vice versa. Keep adding to this Roth monthly.
I would open up the Roth with Fidelity. Check out the mutual funds. See how they are rated(I believe they use morningstar ratings) and how they have performed in the market over time. Vanguard and PIMCO funds are the ones I would highly suggest. If you want to invest in individual stocks, take Russians advice. If you want to invest in a pool of funds with less risk, look at mutual funds.
What I do is examine the funds that are available and pick the ones with a solid rate of return over their history and what industry/stocks/bonds these funds are invested in. You want to be able to see how these funds perform on market downturns and vice versa. Keep adding to this Roth monthly.
Posted on 2/28/13 at 10:19 am to AUtigerNOLA
Plan the trade, trade the plan.
Posted on 2/28/13 at 10:25 am to raw dog
Do what and what now?
Posted on 2/28/13 at 11:25 am to LSURussian
This is exactly what I needed... Thanks fellas
Posted on 2/28/13 at 11:50 am to arcsaints42
I recommend opening an Roth IRA and having an emergency fund (4-6 months) salary saved up before hitting the market.
Posted on 2/28/13 at 3:38 pm to arcsaints42
I am in the same boat as you. I am 24 as well and about to open up a Roth IRA. Just have so many questions about it. I am truly a rookie indeed but want to put my money somewhere where it will grow instead of a regular worthless savings.
Posted on 2/28/13 at 3:45 pm to arcsaints42
Look into MLP's. Especially HCLP (great dividend) and EPD. Upside and high dividend. Im just a little bit older and got into investing at a young age.
Keep in mind that your time horizon is very different than the talking heads on CNBC.
The best thing about being young and investing is that you get to take advantage of disasters like the financial crisis, BP oil spill, Carnival cruise, etc. Those are great times to buy. If the market crashes, always have some cash ready to stick into an index fund. If it keeps going down, keep putting cash in (if you have it).
I made a great return when BAC got hammered in 2011. Still hold it.
Also, if you are into trading often look at SD. High volume, huge volatility. Fun to do, but don't risk a lot.
Keep in mind that your time horizon is very different than the talking heads on CNBC.
The best thing about being young and investing is that you get to take advantage of disasters like the financial crisis, BP oil spill, Carnival cruise, etc. Those are great times to buy. If the market crashes, always have some cash ready to stick into an index fund. If it keeps going down, keep putting cash in (if you have it).
I made a great return when BAC got hammered in 2011. Still hold it.
Also, if you are into trading often look at SD. High volume, huge volatility. Fun to do, but don't risk a lot.
Posted on 2/28/13 at 5:07 pm to arcsaints42
Good for you for thinking about these things and planning and educating yourself. I don't think you can go wrong with a Roth, even though you are very young and will not have access to the money for a long time. I opened one last year (I'm, ehem, a bit older than you 
) because I think it's the only financial tool that's still relatively safe and will be of most benefit when you most need it. But don't put all your eggs in one basket and diversify, based on your tolerance for risk. Learning about the stock market is always a good idea! Good luck!
) because I think it's the only financial tool that's still relatively safe and will be of most benefit when you most need it. But don't put all your eggs in one basket and diversify, based on your tolerance for risk. Learning about the stock market is always a good idea! Good luck!Posted on 2/28/13 at 5:09 pm to conservativewifeymom
Still trying to learn about the stock market. So new to this as well. How much do you put in it a month?
Posted on 2/28/13 at 6:09 pm to Too Frat To Care
We can only afford to put in $150. We're a one-income family, and we are also trying to save for college, pay a mortgage, etc. There are annual contribution limits for Roth, based on your age.
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