investing

[lovingyoualways]

Okay I've finally decided to start off with scottrade. Since their account minimum is $500. I've mainly just been just researching index's. I own stock in my employer (Kroger) and I was also considering a few indiviual stocks besides the index's. Should I also look at bonds? I'm new to this and my new hubby will kill me if I just up and lose 500$. He's already not thrilled about entering the stock market. But the way I look at is there is no great timing for starting to invest/save. I have 200 set aside in my ING acount and 300 extra in my checking we can spare. My account at scottrade is ready to go. I just wanted to be safe before I dive in there.

TIA

[stone]

So you went with scottrade just for the minimum? Does it have any other benefits?

[jmjj215]

It has pretty low transaction costs also.

[lovingyoualways]

IT has many benefits that provide what I need now with as someone else stated low transaction costs. All we have right now that isn't my ING or Capitol One accounts is roughly 500$ so scottrade was about it at this time besides sharebuilder. I've done some research and I'm watching some stocks I'm intereted in and I will continue to research. I was just hoping for some other input. My husband has 401k, I have stock with my company already, I have two online savings accounts along with my hometown checking and savings. We have a good start. But now I want to start in some long term investments that I won't need to touch for ten years or more since I am only 23 and he is only 31 we won't be retiring anytime soon. I thought it would be safe to get in while I am still young so I can learn and have better chances at a better retirement. I know that there are a few individual stocks that I want and I'm interested in index's.

[TBH]

Somebody told me this when I was just learning about investing, and I didn't listen. You probably won't listen either. But if you're just starting out, and you only have a little bit of money to play with, avoid individual stocks. They're too risky. Stick to mutual funds.

I bought individual stocks in the late nineties, and I still have them even tho they're mostly below what I paid for them. I admit it's partly for sentimental reasons that I keep them. As I was just starting out in my career, just trying to get myself excited about saving and financial planning, it did help to buy stocks in companies I believed in, whose products I used. It made the whole thing more interesting.

With your first five hundred bucks, I'd just put it all in one fund (or at most, two funds) because otherwise you'll sacrifice a big percentage of your nest egg to the fees that you pay every time you buy shares in a different company or fund. Then, when you have a little more money to invest, you can buy a different fund, and so on, until you have a nice little group of four or five funds in different asset classes.

[TBH]

An article for you:
"Start Investing with just $100"

http://moneycentral.msn.com/content/...ng/P117785.asp

[lovingyoualways]

I've read that article twice, it is a good article. I should have stated this earlier. Eventually I intend to buy individual stocks. y main intention with this 500 is to build and later invest more and more and so on and so forth. I wasn't intending to go crazy and buy 50 different things making the whole idea of long term investing not work. I was really just curious which index's and mutual funds people have invested in. Out of the 15 stocks that I started watching only 2 dropped today so that's nice, at least I'm watching something decent. Of course this market changes day to day.

[TBH]

Ah. Sorry I assumed you were earlier in the learning process. Sounds like you know at least as much as I do about all this (and I've been trying to learn about it for 8 years).

Funds I like: I have a couple of Putnam funds, but I like to buy socially responsible funds when I can. The returns are not always as high but the guilt factor isn't worth it. I like the Calvert family.

Anyway. I don't know much about different types of funds.

C

[gakline]

I like the Fidelity funds, but I know that some have a higher minimum than $500. You might try calling up one of their advisers (for free) and see if you can avoid some minimums and fees by having a monthly amount debited from your account.

[Russell]

After reading about 5 or 6 of the highly recommended books I've come to the conclusion that the name of the game in investing is patience (and picking out quality funds/stocks/etfs), think long term! so with that in mind I'm assuming the $200+$300 you have are in addition to your emergency fund ?

[lovingyoualways]

oh yes we have 2 nest eggs that have 25$ going to one that is my down payment on a house egg and the other is my emergency fund that one only has 5$ going to it though. I add more to it when I can. I also have my hometown savings account. And now we just had a wedding rereception ad we deposited the checks and the cash is going into a emergency fund and I will use some of the money from the checks to invest. My hubby went to half price books and picked me up some more books to read they're having 20% off right now. I have some stocks I've been watching so now he and I've talked and I'm ready to go now. Thnks so much for all the help. But keep me posted if you have anything else helpfule to add.

[VJW]

Originally Posted by lovingyoualways

But now I want to start in some long term investments that I won't need to touch for ten years or more since I am only 23 and he is only 31 we won't be retiring anytime soon.

At that level of funds over that time horizon, I would look at Micro-Cap Index funds. Some of the companies the funds own will fail, and others will do well. But it’s likely one or two will skyrocket.

A high-tech stock I purchased last year for a $1 a share is now around $12, but individual stock picks can be very risky.

#

[stone]

What exactly is the emegency fund? Is it money sitting in a savings account or in property or such? Right now, I am too young to feasibley buy a hous ebut have a savings account and checking account. Are there other emergency funds that I can consider besides this?

[lovingyoualways]

there are many articles around better describing this. But yes it is money sitting in a savings account, CD, or money market account. Preferably somewhere not directly connected to your checking account and is accessible within 24 hours. If it in your savings account you have at your local bank there won't be much of a interest rate and you will be more likely to tap into it. I have two funds one is in a ING account and one is in a capitol one account both bearing good interest and easy to access in 24 hours if needed. Hope this helps. YOu can look at accounts like ING here:

http://www.bankrate.com/brm/rate/mmm...2&produ ct=33

[CRFSaver]

Nice thing about ScottTrade is they have no inactivity fees! Bonus! LOL

[jmjj215]

I don't think it would be good to have an emergency fund in a CD. One of the purposes of the efund is to have the money accessible w/in a reasonable amount of time. (For me that's 3-5 days).

[lovingyoualways]

I agree. Cd's are only really good if you need the money in 2-3 years and in some books they recommend this as a way to save for a down payment for a large purchase. But definately not for a emergency fund since the majority have a early withdrawl fee.

[baselle]

Originally Posted by lovingyoualways

I agree. Cd's are only really good if you need the money in 2-3 years and in some books they recommend this as a way to save for a down payment for a large purchase. But definately not for a emergency fund since the majority have a early withdrawl fee.

One of the tricks of investing with CDs, even to fund an emergency fund, is to ladder them up. Works best if you have most of the emergency fund. You put one month of living expenses in a 6 month CD. Do the same thing next month, then the next. By the 5th month, your 6th month CD can be taken out if needed or renewed if you don't have an emergency. Then you keep going, round and round.

When the long term rates start picking up, you lengthen the rungs of the ladder. Instead of 1 month every 6 months, stretch it to every two months to a year.

[rchiang]

Mark Cuban put up an excellent blog post on "What's an Investor?" at:

http://www.blogmaverick.com/entry/1234000660060351/

I think he sums it up far better than I ever could.

-Ray