[disneysteve]

Originally Posted by jasonl417

alot of fund companies have minimums that are $500, so find maybe three domestic large cap funds(butual funds that invest primarily in large companies located in the US) it is believed that these are little safer because we the strongest country in the world, then maybe take the other two $500 and find a couple of international funds that are down.

Jason, I have to disagree with some of what you suggested.

1. While some fund companies do offer low minimum investments, they also may impose account maintenance fees on funds with balances below a certain amount, so by spreading the money over 5 funds, you may find yourself paying 5 annual fees. Until the balance is higher, it may make more sense to stick to just 1 or 2 funds.

2. There is no point in selecting 3 funds in the same asset category: domestic large cap. All that would give you is duplication, not diversification. Diversification means investing in different asset classes: large cap growth, large cap value, small cap growth, international, etc. Same goes for picking 2 international funds.

I'd rather see you do just 1 or 2 funds to start. The simplest route with maximum diversification would be a target date retirement fund. That would expose you to a broad range of investments for a small amount of money and minimal fees.