What would be the best way to invest my money?

**disneysteve** · 09-02-2009, 09:46 AM

Welcome. Good for you for thinking about saving and investing at such a young age.

Tell us more about this money. What might it be used for and when? Will you need it for your education? Will you be wanting to buy a car in a couple of years? Knowing when you might need this money makes a big difference in suggesting how to invest it.

**Johns1031** · 09-02-2009, 09:51 AM

A car will be a hand-me-down. My parents invested money a long while ago for school expenses, so chances are I won't need it for school.

Its just a sum of money that I have saved since I was a little kid, and now I would much rather have it growing than just sitting in my room. I just don't know what to do with it.

**Scanner** · 09-02-2009, 09:56 AM

"I don't know" is a fair answer and probaby the most correct one at 15 years old.

If you don't know, I would put it in a 90 day CD at your bank and if and when you do decide to earmark it for something, feel free to approach the forum again.

**Johns1031** · 09-02-2009, 10:04 AM

I was thinking about buying gold with it. But after I researched the closing prices over the last 100 years I realized that gold is almost always at it's highest during a recession and almost always at it's lowest during economic stability. So perhaps there would be a way to invest it for maybe 10 years until the economy is stable once again, and then invest in gold?

**disneysteve** · 09-02-2009, 10:07 AM

One thing to keep in mind: At 15, you cannot open an account, buy a CD or invest money on your own. Your parent will have to do it as custodian of the account in your name. So whatever you decide to do, your parent will need to approve of.

**Johns1031** · 09-02-2009, 10:09 AM

My parents will have no problem with that. I've talked to my mom about it. She wants me to invest it somehow but doesn't know what would be the best way either.

**disneysteve** · 09-02-2009, 10:18 AM

Forget gold. That is gambling, not investing (though many will disagree with me). It is something you can dabble in once you have a solid, diversified investment portfolio. It is not where you start your investing life.

I tend to agree with Scanner that if you aren't sure what this money might be needed for, or when, a cash account is probably best, like a CD. I don't think you need to go as short as 90 days. I'd be fine with 12 months at this point.

If you really want to start investing, there are numerous mutual funds with low minimums. Exchange traded funds are another option. You could open an account with a discount brokerage like Scottrade and put the money into an ETF like an S&P 500 fund or a total stock market fund.

**Broken Arrow** · 09-02-2009, 11:43 AM

I know this is a tangent, but I too have argued that commodities (such as precious metals) are speculations, not an investment. Of course, I too speculate in my own way, but I fully agree that that is not a way to start out. Invest first. Speculate on the side later if you want.

By chance, I stumbled upon ole Jack Bogle talking about this topic as well.

**Scanner** · 09-02-2009, 11:55 AM

As much as I am a silver bug, I agree too that buying gold isn't really the appropriate investment, espeically if he is not sure of his time horizon.

One thing for sure, unlike a stock in let's say ENRON or MCI, gold will never be worth zero, Broken Arrow

But I am sure those were "investments"

**disneysteve** · 09-02-2009, 12:00 PM

Originally posted by Scanner View Post

One thing for sure, unlike a stock in let's say ENRON or MCI, gold will never be worth zero, Broken Arrow

But I am sure those were "investments"

True, but I would also never recommend that someone just starting out put all his money into a single stock.

There is nothing wrong with speculating. Heck, there is nothing wrong with gambling. I do both of those things myself. They just aren't the basis of a portfolio. They are the fringe part of the portfolio.

**Scanner** · 09-02-2009, 12:07 PM

Another thing for Broken Arrow - how are your "investments" doing since the crash? My silver tanked but has since recovered to where I bought it and then some.

Not bad for a non-investment, huh

?

**Broken Arrow** · 09-02-2009, 12:31 PM

Well, we've been through this and I don't want to derail the thread because we're trying to help someone here.

As for my investments, my 401(k) and my Rollover IRA have both posted about 15% gain so far this year. That does not include dividends, because they're my passive investments, so I don't look at those accounts.

For the record though, although I greatly respect what Jack Bogle has to say, I do speculate. For that matter, I don't even have a problem with commodities. To me, it's not what you get into that matters, but whether you think there's a trade that presents enough upside versus the downside to make a viable speculative trade. Stocks, bonds, commodities, options, forex, it doesn't matter. I'll go anywhere and everywhere. In fact, I already have a position in oil since the bubble burst, and now I'm contemplating sugar. Yes... sugar.

But yeah, that's definitely not something to start out with in the world of investing....

**maat55** · 09-02-2009, 02:09 PM

IMO, you should just put it in an high yield savings account and read a few books on investing. Mutual funds are the most common investment for those who do not invest a lot of time into researching and learning investing.

I've actually chosen to park my portfolio into an money market fund for the time being.

**KTP** · 09-02-2009, 06:16 PM

Hmmm, $1600 you say?

Lets see...ok, take a look around the back of the school after hours or during a break. See all those kids smoking? Recession? What recession?

$1600 buys you roughly 87 shares of Altria Group (stock symbol MO). It has a foward PE ratio of 9.83, a profit margin of 18.97% and to top it all off, it pays a dividend of 7.4%

People are just dying to get their products too!

(ok I was a bit tongue in cheek here, but in actuality, he probably would be thanking me in about 5 years when he has doubled his cash)

What would be the best way to invest my money?