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Message
Crash Course On Small Investments
Posted on 7/11/14 at 10:41 pm
Posted on 7/11/14 at 10:41 pm
Brief background: I'm a recent LSU grad, have a new career, and graduated debt-free. My primary degree was not in business, but I have a business minor, which really only taught me the brief concepts of investment and finance and very little specifics. I'd like to make a first investment, say $1,000, just to sort of dip my feet into the water and begin learning the ropes of investing. I'm not looking for a quick moneymaking deal or for somebody to tell me where to put my money, I would just like your advice. I'm more interested in future returns than current gains.
Obviously, with only this small amount, I'm looking for a platform to invest with small trade fees (I'm not really looking to trade very much) and low commissions.
Do ya'll recommend opening an online account with E-Trade or something similar?
What types of resources (books, etc.) do ya'll recommend to familiarize myself with the market and how to begin investing?
How would you split up the $1000 between stock companies or bonds or whatever I choose? 50/50? 25/25/25/25? Is $1000 too little for diversification?
I'm sure you guys get these types of threads often, and I apologize if I'm redundant. Just looking for opinions and advice.
Obviously, with only this small amount, I'm looking for a platform to invest with small trade fees (I'm not really looking to trade very much) and low commissions.
Do ya'll recommend opening an online account with E-Trade or something similar?
What types of resources (books, etc.) do ya'll recommend to familiarize myself with the market and how to begin investing?
How would you split up the $1000 between stock companies or bonds or whatever I choose? 50/50? 25/25/25/25? Is $1000 too little for diversification?
I'm sure you guys get these types of threads often, and I apologize if I'm redundant. Just looking for opinions and advice.
This post was edited on 7/11/14 at 10:44 pm
6
Posted on 7/11/14 at 10:49 pm to TheBowhunter
quote:
What types of resources (books, etc.) do ya'll recommend to familiarize myself with the market and how to begin investing?
Bogleheads
quote:
How would you split up the $1000 between stock companies or bonds or whatever I choose? 50/50? 25/25/25/25? Is $1000 too little for diversification?
Considering bond returns, rumored FED QE pullback and lack of growth in that sector, I'd imagine most people would suggest stocks due to historical gains
quote:
Do ya'll recommend opening an online account with E-Trade or something similar?
Low comissions would mean setting up DRIPs with companies would be smartest and Blue chip drips historically are top performers
Posted on 7/11/14 at 10:55 pm to GenesChin
quote:
Low comissions would mean setting up DRIPs with companies would be smartest and Blue chip drips historically are top performers
What means would I go to to set this up? Directly to an individual company or through an online brokerage or broker?
Posted on 7/12/14 at 12:02 am to TheBowhunter
This is going into a Roth, right?
Posted on 7/12/14 at 6:15 am to TheBowhunter
Look into setting up an account with Charles Schwab and use one of their proprietarty mutual funds. There are no transaction fees on their funds.
Investigate their menu of funds for yourself but at your age and with your long term investment horizon, I suggest you consider a growth stock fund or an S&P 500 index fund. Reinvest the dividends.
Invest half your $1,000 now, wait 90 days and put the other $500 in.
You can send them a check for the $1,000 and the uninvested amount will be in a money market fund until you buy an investment.
You don't have enough $ now to pick individual stocks enough to properly diversify and that's why I suggest you go the mutual fund route.
Once you start investing don't panic and sell if the market pulls back. That's the time to buy, not sell.
Send in $50/month (or more if you can afford to do so) and you'll be amazed how much you will have 10 years from now.
Good luck!
Investigate their menu of funds for yourself but at your age and with your long term investment horizon, I suggest you consider a growth stock fund or an S&P 500 index fund. Reinvest the dividends.
Invest half your $1,000 now, wait 90 days and put the other $500 in.
You can send them a check for the $1,000 and the uninvested amount will be in a money market fund until you buy an investment.
You don't have enough $ now to pick individual stocks enough to properly diversify and that's why I suggest you go the mutual fund route.
Once you start investing don't panic and sell if the market pulls back. That's the time to buy, not sell.
Send in $50/month (or more if you can afford to do so) and you'll be amazed how much you will have 10 years from now.
Good luck!
This post was edited on 7/12/14 at 7:36 am
Posted on 7/12/14 at 12:34 pm to LSURussian
quote:
Look into setting up an account with Charles Schwab and use one of their proprietarty mutual funds. There are no transaction fees on their funds.
Investigate their menu of funds for yourself but at your age and with your long term investment horizon, I suggest you consider a growth stock fund or an S&P 500 index fund. Reinvest the dividends.
Invest half your $1,000 now, wait 90 days and put the other $500 in.
You can send them a check for the $1,000 and the uninvested amount will be in a money market fund until you buy an investment.
You don't have enough $ now to pick individual stocks enough to properly diversify and that's why I suggest you go the mutual fund route.
Once you start investing don't panic and sell if the market pulls back. That's the time to buy, not sell.
Send in $50/month (or more if you can afford to do so) and you'll be amazed how much you will have 10 years from now.
Good luck!
'Preciate the advice.
Let it be known that I have a pretty solid savings account already for somebody just finishing school. The $1000 isn't hurting me, I'm just starting with a small amount so I can learn before I begin to pour bigger money in.
Posted on 7/13/14 at 7:23 pm to TheBowhunter
If you are truly debt free and have an emergency fund of about 6 months pay set aside then I would invest the $1000 in a ROTH IRA. You can learn about different "investments" within the retirement account over the years. But getting money in early will be very valuable at retirement. This is assuming you don't need access to this $1000.
Posted on 7/14/14 at 1:17 pm to TheBowhunter
quote:
Do ya'll recommend opening an online account with E-Trade or something similar?
Merrill Edge, 300 free trades when you sign up and only $6.95 afterwards. Open a Roth IRA account.
quote:
What types of resources (books, etc.) do ya'll recommend to familiarize myself with the market and how to begin investing?
Merrill Edge also has an extensive library of primers to help you invest wisely and/or learn the ropes.
quote:
How would you split up the $1000 between stock companies or bonds or whatever I choose? 50/50? 25/25/25/25? Is $1000 too little for diversification?
All $1000 into a global flex fund. They'll handle the diversification.
2 good ones:
First Eagle Global Fund SGENX
Black Rock Global Allocation MDLOX
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