Investing with 10% annual return?! Too good to be true????

Question

Ok,I'm just starting to think about investing some money for real. I've heard about if you put X amount of money away for so many years at a 7-10% annual return you can have a huge nest egg for when you retire. Where do I find a high interst rate like that? If it has that high of an interest rate is it the kind of thing like a CD where you don't risk loosing your money? Or how much risk is involved? Can I do this through my bank? What do I ask them about? I'm so clueless! Where do I start????

I'd like to invest a few thousand but don't want to risk loosing it!

Answer 1

generally speaking, sound investments in stock normally over the long term yield about 10% annually. Some mutual funds have yielded much better than 10%. Others have not. The key to getting a 10% yield is to have a portfolio of sound, diversified investments.

A mutual fund or better yet several mutual funds can provide the diversity with only a relatively small investment. The main problem is that not all mutual funds are created equal. Some are good and some not so good. You must do some research to find ones that have a good track record and you must periodically check up on their results to make sure that they are performing up to expectations and if not replace them.

It is not uncommon for a good mutual fund to return better than 15% annually over a long period of time. For example Pennsylvania Fund has returned 15.62% annually over a 30 year period. I picked that fund because it has been around that long and has a track record. Its 20 year record is not quite so impressive, only 12.16% annual return.

Answer 2

Go get the book "The Only Investment Guide You'll Ever Need" by Tobias. It's a great little primer on the basics of investing.

As for you specific question, over the very long term an annual return of about 10% is a reasonable expectation for US stocks. But this is not a CD and you do have risk of a decline in any given year. With stocks you're not talking about an "interest rate" but rather, the rate of return you get from price appreciation and from dividend payments (which are kind of like an interest payment, but also very different.) Bottom line: you have to be willing to accept some risk for long term returns.

Answer 3

Start by educating yourself at places like the Motley fool. Most investments carry some risk. Some of the more stable investments with good track records are things like the Abbey Bank and the Templeton Dragon fund.

When a company has a proven good track record they become what is commonly referred to as a Blue Chip company. The name Blue Chip comes from gambling actually, as the blue chips on a gaming table were the highest denomination on the table.(now days a purple chip is often the highest denomination depending on the gaming establishment.)

Answer 4

The stock market has averaged a 10% annual return since it's inception, so that is where you should put your money. Stick it in an index fund.

Banks rarely yield more than 4% per year, which is actually no growth at all since inflation also runs at about 4%.

Answer 5

When you say "safe" investment, you eliminate a number of options. If you don't want bank products or treasury bonds, I don't have much advice. Rental properties are risky. Investor's bought rental properties during the real estate boom thinking the rent money would cover loan payments. Many were wrong. If you give us a better idea of your risk tolerance, you may get some ideas.

Answer 6

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Answer 7

I suggest you try this, ETF (Exchange Traded Fund) of REIT (Real Estate Investment Trust). ETF is index fund with much lower cost than mutual fund. REIT typically returns higher than the stock average.

Below is the list of ETFs and look for ones with REIT.

http://news.morningstar.com/etf/Lists/ETFReturns.html?topNum=All&lastRecNum=1000&curField=8&category=0

Answer 8

It achievable, It is true, but you have to be patient and learn how to invest the right way.
First check this book out first, must read
Stock Traders Almanac by JEFF HIRSCH

Yes you could learn invest by yourself. it is your money, you should know how to do with it. for starter check this site out.

http://www.pathtoinvesting.org/index_fla...
http://www.stockcharts.com
http://www.streettalklive.com>... university. a lot amount of information. It will serve you well
I accumulate in good amount in 401k at the young age.I could share with you. when consider invest in stock market. you should consider basic 3 things:

fundamental analysis==(economic data,finincial health, management, business model, competetion)>>what to buy

technical analysis==(chart+indicator)>> when to buy

Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of your live

At the age of 32. my 401k is amassed 74,000.00 and 30000.00 in taxble account. by follow simple rule

Answer 9

this is an off the wall answer most people have a credit card with a ball. at10% intrest and some much higher, if you are one that is in that group pay it off and you have made 10% or more.