Just Starting Out HELP!

[stoney508]

I have posted a few things but this is something I want to gain knowledge in so I can make a informed start when I do get to that point.

Currently I have a 401(k) that im contributing 6% increasing 1% each year to max out my employer match right now. I have about 1k in something my parents set up for me called american funds through edward jones. As well as a RothIRA through Fidelity that I have 1,200 in and contribute 100 each month to.

I think I have my "safe" investment with my 401(k) doing the lifepath where I can take a look at it ever year or so and maybe move some stuff around but ill be able to let this sit for many years(30+). The Roth I may take a little more aggressive approach with but as of right now im sticking with international funds waiting for them to start increasing down the road from now while still waiting to have an appropriate amount of money to start shuffeling the money around if that makes sense.

Now my questions come about because that is all really for my retirement but I want to invest to possibly use as an increase to my wealth or help pay for a car, a house, or other unexpected things in the future.

Im looking to get into Scottrade but dont know where to start. Im looking at picking up a few stocks, options, mutual funds, or ETF's but don't know what to look at? As well as how much is a good amount to invest with? Is there a way that I can diversify my portfolio in a better way? And possibly if there is any wisdom you could pass along I would appreciate it.

I am 26yr old paying off my student loans right now but want to take advantage of the markets going down when QE starts to slow. Thanks in advance for all comments.

[feh]

I suggest you read the various "startup kits" on this page:

http://www.bogleheads.org/wiki/Getting_Started

[FrugalSensei]

I suggest you read the various "startup kits" on this page:

http://www.bogleheads.org/wiki/Getting_Started

Thanks for the link feh. I came here to see if I could add some helpful hints but I think that bogleheads site is great even though I am far from starting out. I second your advice to stoney508

[MatthewC]

stoney508,

Hi there! Safe investments aren't actually all that safe. In fact, they can cost you a lot of money in the long-run. Safe investments should only be used when you are planning to spend the money in the short-term and need someplace to park the money in order to get a small return on it while you get to where you want to be.

About your retirement : It is not enough - If you want to get to retirement, I would recommend putting in $400 a month (minimum) if you have a good plan on how to get there.

Here are two thoughts on improving results in investing and the diversification issue.

1. You can try diversifying by putting in equal amounts into each stock. That way, it is how the portfolio performs on average, not how individual stocks perform on average.

2. You can diversify by sector. This helps to minimize the impact that a single large sector (the financial sector for instance during the great recession) can impact your portfolio.

Options are often like buying lottery tickets. Don't do it.

I also don't like mutual funds or ETF's. For one, you lose control over your investments. Secondly, my own system for stocks is fairly consistent in beating a ton of these (check out my forum above for stats). And, even if I didn't have my system, would I know how they were selecting their stocks and that they would continue to do so with discipline? I can't control how they invest or even enforce making them invest the way that they will say they invest. And besides that, the history of mutual funds when comparing them against the long-term returns of the S&P 500 can get you really depressed when you realize the low % of them that have historically been doing better than that and the high rate of those that have done worse.

A good amount to start investing with is whatever will get you started. Personally, I would be willing to start as low as $700 or so. If I were to start there, I would simply buy another stock every time I had saved up another $700. It's okay to build your portfolio up over time. You don't need $10k or $20k to start investing.