Should I Invest?

Question

I have some money in the bank, about 25K, how can i invest this money? My problem is i don't know much about stocks.

Answer 1

Start with mutual funds. You'll get a more diversified investment than a single stock. You could also invest just a portion of then money to start with to see how you like it and then invest more as you become more comfortable. Try an S&P 500 index fund.

Answer 2

There are three general directions. Do you (1) want to speculate, as in buying stock to wait a short time for the price to go up (for tax purposes, it is anything less than a year)? Do you (2) want to put your money into a business and expect the value of your investment to go up because the company's business value has grown. There are also income stocks (3), things like preferred stocks that are sort of a middle ground between stocks and bonds and they pay you dividends (which are usually taxed at a lower rate). For the long term, simply check into companies that you like, companies that do well what you might be interested in. If you are more fond of Lowes than Home Depot, or Target instead of Wal-Mart, vice versa, that could give you an idea of something to invest in for the long term. If you loved your Ipod or Apple computer a few years ago, for instance, your money would be worth a good deal more today (because Apple stock has gone up a lot). Shopping for speculations, short-term trading positions, is a good deal trickier, more complicated to research, and with an enormous dollop of luck involved. Some folks may recommend a mutual fund, which essentially buys a big basket of stocks, so some of your money is into several things and you shop for mutual funds based on the kind of strategy and range of things they invest in (and often with an eye to how well they've done before).

May I suggest the Ishares link below as a replacement for mutual funds in the event that you don't have any one or two companies that you are interested in. Ishares are bought and sold just like stocks (so there is no sales "load" like you will find in most mutual fuinds). For instance, the stock symbol NY buys you into the top 100 companies on the New York Stock Exchange. If you think, for instance, that they got to where they are by doing something consistently good and you want a piece of that, then buy NY. If, say, instead you want to buy into a basket of relatively small companies, figuring they have more room to grow (sometimes they do and sometimes they don't), then consider IJT, which is the Standard & Poors Smallcap 600, as in 600 companies. There is a wide range of possibilities.

Good luck. No rush, explore what interests you, and step into it in the degree you feel comfortable. And if you want to do something fun and risky, make sure you only sink a little into the risky things. If they pan out they can be great, but they can also cost you dearly if things don't, so only risk what you feel like you can lose if you go for some of the weird stuff (like LBTS, lots of mining claims, but no mine or NVPM, NevStar Precious Metals is a tin mine that was once a Voice Over Internet Protocol business to business sales company, imagine how that change took place).

Answer 3

First, I would make sure you have at least 3 months salary saved up in the bank or in a money market fund for an emergency fund. (Some people say 6 months.) Financial disasters like getting layed off or sick happen to all of us.

Second, I would pay off all high interest debt. Pay off everything you can except the house mortgage and student loans. Paying off debt is one of the best investments you can make. You will have more money in the future because you won't have credit card bills to pay. (Depending on the rates, you may want to pay off the mortgage and student loans as well.)

Third, start investing in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money conservatively, in money market funds and bond funds, and part aggressively in stock funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.

Investing in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser. You may also be able to invest in a stock mutual fund via a 401K plan at work. Buying a house instead of renting will make you a lot of money in the long run.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Answer 4

A great site to look at if you are looking to test your investing skills and learn more about stock market is http://www.top10traders.com This is a totally free site. You can create your own portfolio of stocks with $100,000 in 'play' money, and then watch how your stocks compare against over traders. The site also lists out which investors are doing the best and what stocks they have bought. Just click on the portfolio of the best investors and you can see the stocks they like. When you feel comfortable with a stock that you have in your 'play' portfolio at http:www.top10traders.com then you can go out and buy the real thing. Good Luck!

Answer 5

1 - ask around for a financial adviser that people trust.

2 - you need to open up a Roth IRA and invest the maximum. ($4,000 this year and next.)
>>>A good index fund or a mutual fund made for GROWTH. It should have a LOW expense ratio, try to avoid Front or Back End Load (commission) if possible, manager should have a good tack record.

3 - Do NOT buy individual stocks. It is too risky with money you really need.

Got to trust your adviser and ask others if they like the mutual funds they own and if it has performed well, most people would likely be willing to tell you.
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Answer 6

of course you should invest but to what you will invest depends on when you are planning to use the money and how much risk you can take.... if you are planning to use the money within a year or to ,put the funds into a money market account or a CD depending on which will yield a better rate...if you are not planning to use the funds for longer than 1 to 2 years you can start to invest with some low cost index mutual funds and some low cost bond funds , typically , lets say you are 25 years old , you should invest 25 percent to low cost bond funds and the rest 75 percent to several index funds , i keep saying index funds because most of the time they have lower cost than the actively managed funds , which is good for you ....try to diversify your holdings in your porfolio by investing several funds from large cap to small mid cap to some international ....the allocation percentages also depends on your risk taste , but typically stick with large caps , i say about 40 to 50 percent of your stock portfolio and distribute the rest between small cap mid cap and international ...... open an account with an on line broker and you can buy most of the funds without paying any commission , no load no fee funds....and they also provide a lot of research on stocks and funds ...good luck

Answer 7

if u have time to follow the markets then start reading
in a few months u'll learn all about it..
read: a random walk down wall street
websites: investopedia.com
if ur investing for the long term u don't need to do research..buy microsoft stocks u'll get a steady income..like 10 to 15 % annual return..its better then money markets
if u want to trade stocks its a lot of work

Answer 8

You should invest your money into stocks.
Get a hold of a Priamerica Investor and find out, what is your best option? Also if you want to invest for a short or long time?

Answer 9

There are lots of things to invest in beside stocks. All with different risk factors.

You should talk to some Financial Advisors for your particular situation before you invest in anything.

Answer 10

Ahhh those are the word every finacial advisor want to hear.

Of course you need to invest. What 25K, oh and you have no idea about stocks? Well I'll be glad to take, err, help you invest. First you need to ..........