Hello. I'm just wondering if anyone here know's anything about stocks and bonds and investing. I am considering opening up a investment account. I have looked around and considering my limited money and such, I'm going to open a high yeild savings account and then a Brokerage account with the investment firm "Charles Schwab". I have been and I am continously looking around for more info. have looking and learning about different investments and bonds and funds. I'm thinking about putting the majority of my funds in a Growth-and-income, equity-income, and balanced funds, mutual fund. their supposed to be good for long term returns as well as dividend based income and well balanced to tax purposes.
Of course you realize that I'm talking out of my ass right now.
Anyone who know's where to find some good info please let me know.
Thank you.
Jessica Marie
Comments
School of Hard Knocks
Scott Burns (a syndicated financial columnist) is a long time advocate of low cost (primarily index) investing. These links have sample do it yourself low cost portfolios and lots of advice from Mr. Burns (archived columns). If you don't want to do it yourself, his company will put a sophisticated risk index low cost portfolio together for you and manage it for a small (compared to anyone else) fee provided you meet their minimum portfolio size.
Some "free" advice from me (learned the hard way):
* Avoid individual stocks unless you really plan to spend lots of time researching what you buy and then watching the company carefully after you own it.
* Low cost index investing is the way to go. Typically only 30% of fund managers beat the index they are measured against. The odds that the managers you pick will continue to beat their index is even worse.
* If you do buy a managed fund: Look at how long the fund manager has been on the job. Look at what happened with the fund's values during the last couple of downturns. Watch for changes in fund management after you own it.
* Morningstar is an excellent resource.
* Be careful of employer 40lK's. Many still have high fees (especially an issue for smaller companies).
* If you plan to get serious and really save for retirement, think Roth rather than regular IRA's. If you do a good job (with the investing) it's very unlikely that your tax rate will be lower later. Pay the taxes on the money now so that you won't have to later and won't have to worry about minimum distributions from a regular IRA.
* The more equities (stocks and stock funds) you have in your portfolio, the higher the risk. My investments dropped over 30% 4th qtr 2008. You have to have the stomach for the volatility.
Good luck to you.
Thank you.
These accounts that I want to get are completely separate from my works 401K. That is what I have now. my 401k uses a lot of Vanguard funds. I took mine out of that and put it in a more aggressive mix. I looked over several sites and compared funds. This is what I got. 66% large cap, 16% mid/small cap, 14% international, 3% bond,1% stable.
JPMorgan Stable Value Fund
PIMCO Total Return Fund
NTGI S&P 500 Index Fund
Vanguard Extended Market Index Fund (VIEIX)
Dreyfus International Stock Fund (DISRX)
Just doing the best I can. Still trying to learn.
Thanks for the advice.
Jessica Marie
Investing
It appears that what you are considering is a class of investments known as mutual funds. You and a number of other investors invest in "shares" in the mutual fund. A professional manager takes the pooled funds and decides which stocks or bonds to buy, sell or hold for the fund. The fund objective determines what type of stocks or bonds the fund will hold and in what proportion. Most funds have a minimum investment requirement (I believe $2,500 is somewhat common).
It is not necessary to have a brokerage account to invest in mutual funds. A brokerage account is normally used when you wish to buy and sell individual stocks and bonds for yourself. With a brokerage account you decide what to buy and what to sell.
There is a particular type of brokerage account called a margin account where you have the ability to borrow from the firm holding your brokerage account in order to purchase more of a stock than you could ordinarily afford. I would only advise this type of account for experienced investors.
I have worked in the financial services industry for many years on the software used to support these systems.
Michelle B