What are some good ways to invest for starters (ie stocks, cd, mutual funds, t-bills)?

Question

Hi, I want to explore and learn about investing my money. What are some good ways to start with a small amount of money (ie $1000 -- beginners gotta start somewhere).

I've only researched about t-bills. From my understanding, it seems like you earn about 5% by buying a discounted t-bill. Are there any better options?

Websites, info, tips, and explanations are appreciated.

Answer 1

You do not find too many potential investors that have actually taken the time to some research. You are exactly correct. t-bills pay about 5%, a little under right at the moment. The main problem is that there is a $1000 minimum, but since you have $1000, that is of no concern to you. T-bills are considered one of the safest investments. Another advantage is that the interest is tax free from state and local taxes, making the after tax return even more favorable.

What I suggest you do, is take a trip over to your local library and check out a couple of books on investing. They should have dozens.

In my opinion, actually not shared by many responders, is investing in mutual funds. The main problem with this approach is that 70% of mutual funds underperform the market in general. That is the main critique. However, there are some good ones out there that have excellent long term records. Others recommend index funds. The main advantage of these is that they have low expenses and do not churn their holdings as many mutual funds do.

With only $1000 as a beginning, investing in a particular stock is somewhat risky. All eggs in one basket so to speak.

Answer 2

Alright where do I start. Well its the same place you should.
I don't know your age and that is important when defining your investing tolerance and objectives. If you are young and making a decent salary, I would recommend individual stocks they will provide great returns are can be relatively safe. If you are older and heading towards retirement you could stay in individual stocks but be more careful, more into bonds and perrfered stock as well. In conclusion of that part Young= Aggressive Growth Stocks, Older= Safe, Dividend Yielding Stocks but more bonds than stocks.
Mutual Funds are a good way to get involved if you don't want to spend your time doing hours of research. Some good things to look into are also ETF which are like a group of stocks that are put together, they trade just like stocks themselves but provide a little more diversification. I would suggest emerging market mutual funds and ETFs if you are younger and more bond based mutual funds if you are older. The problem with mutual funds is the initial fee sometimes around 10k bonds are the same way. However I just bought into a mutual fund for my company that is focused on Russian Stocks for just $1000. Examples: LETRX, that is the fund I just bought. TKF, IF are the Turkish and Indonesian ETFs respectively. But if you are going that route stay in emerging markets because they have the most potential for big gains.
T-bills and other government bonds are nice but they won't give you incredible returns maybe look into some corporate bonds or junk bonds although sometimes they cost around 10k.
CD's are nice way to get 5% no matter what but kinda boring if you ask me.
Investment clubs can be a way to go. You pool your money with other people's which gives you more buying power and can lead to better profits. In fact I run an investment club and will discuss it with you if you would like to get involved just email me.
Research: finance.yahoo.com, investopedia.com is great, thestreet.com is awesome.
Just make sure you do your due diligence before you buy a stock, check out their financials, look at their competitors their evaluations etc.
Jim Cramer's book is very very insightful. It is one of the best resources I have found.

Answer 3

It's really good your are out exploring investment options. There really are a lot of options available: ranging from simple time deposite, tbills, common trust funds, etc.

Right you are: you gotta start somewhere: i suggest you start by defining your investment objective (regular cashflow, retirment, education plan, etc) and risk tolerance (averse, neutral, tolerant). Once you are clear about these two, you should be able to narrow down your investment alternatives.

There are investments that pay out periodically, some lump sum. You should find an investment that will match your cashflow needs. Another thing, keep this in mind: the higher the risk, the higher the reward. Consider this: investing stocks of a new company where default probability is high will promise a higher yield than investing in a government bond where default is virtually none.

Hope this helps. Goodluck!

Answer 4

Mutual Funds might be a good investment for you if you are not a risk taker and you have a long time horizon to let your money compound for you. Get yourself educated first before putting in the money. Here is a wealth of resources for you

Yours Sincerely
Sean Toh
http://creditplushealth.org/

Answer 5

Think mutual funds... and be prepared to be a long-term investor. When you invest, it should be money you do not need in the foreseeable future. Yahoo! Finance gives you more than enough information to get started... read and enjoy.

Answer 6

Hi, i know what your question is.

i suggest a great site with plenty of Issues related to your Investing and everything around it. it also provide clear and accurate answer to many common questions.

I am sure that your Investing will benefit greatly from this website.

http://investing.sitesled.com/

Good Luck and Best Wishes!