Does anyone know of a good stock or fund for a beginning investor?

Question

I am a young professional and would like to begin investing part of my income in addition to my 401K. I have only $2000 to start with, but I since I recently paid off a debt, I expect to be able to contribute an additional $300 - $400 each month. If anyone knows of a stable stock or fund with a good return rate that fits my budget, please let me know. Thanks in advance!

Answer 1

I have the impression you're a responsible and thoughtful person who's opening the investment chapter of his or her lifetime. This can be a long and fascinating venture, one that will eventually reward you well in retirement.

There are some good suggestions here from other posters and some perfectly dreadful spamming from salesmen.

Do you see the suggestions about ETFs? These are ultra low-cost investment vehicles where you can accumulate your savings for a while without having to spend too much time on active management. I'd look for broad-based ETFs such as those based on the S&P 500, or the 100, or even the QQQQ. I'd avoid Vanguard's VOW (the emerging market fund) for now, as many believe these markets have rushed up too far and very fast and now require a breather. And I'd put some money in plain old money market deposits or funds, for the time being.

Meanwhile - and here begins the interesting part of the voyage or venture - I'd start learning about the stock market by researching the companies that are already in my life. Where do I bank, for example. Is this bank a good investment? Where do I work, what publicly-traded companies are associated with my employer, my business or my profession? Where do I go on holiday, and what businesses might be involved with my travels? Are there any factories or light industries in my neighborhood? Are their parking lots full, sometimes even on Saturdays? Are there any products or services I use everyday, whose quality I understand, that are manufactured or provided in China or in India? Are shares of these Asian companies traded here in the US?

It's the old buy-what-you-know story. As my knowledge grew, I'd start buying individual stocks. In the end, these will permit good control over taxation, something that is lost when you entrust management to a mutual fund. Remember, countless studies have shown that the median mutual fund underperforms the relevant index while charging a fee for this insult; and remember also, that an ETF cannot outperform its own index.

At the present time, I wouldn't accept or follow any specific stock tips from posters on Yahoo message boards. I might listen respectfully, but I'd learn to research and develop my own ideas.

Lastly, there are a couple of spammers right here who should be ignored. The Forex blatherers. It's an ugly trap for naiive newbies. And the top10traders. It's high time Yahoo put these posters, who get paid for trolling their ads, off the answer boards.

Good luck to you. I have a feeling you'll succeed, and your lifelong adventure in finance will turn out well.

Answer 2

Best Stocks For 2007 from what I like best first:

China Mobile (CHL). Growing earnings and gaining suscribers at a phenomenal clip. Stock will hit $60 before long. Has a nice 4% dividend yield to boot. Forward P/E of 17 makes this stock very attractive. Great play because you can buy an industry leader in one of the fastest-growing economies (China) on earth. Screaming buy.

Carnival Cruise (CCL). Cruises becoming more and more popular. Hurricane season just ended and stock was beaten down for no good reason. Earnings are growing. Stock is just plain cheap on a valuation basis.

Ebay (EBAY). An industry leader and great business. If you can grab it below $30, it's a good play. Watch out though, the stock is volitile.

Motorolla (MOT). You never really hear too much about this company, it sorta just glides right along. The gov't contracts it has makes it a ton of money and its phones are cool. It is just above it's 52-week low and seems too cheap right now. Earnings are growing.

I would also look into an oil play. The best one seems like ConocoPhillips (COP).

I would stay away from both Apple and Starbucks right now simply on valuation. Both had good runs. If I had to pick one though it would be Apple on valuation/earnings basis.

Happy New Year and Good Luck!!!

Answer 3

I would not play with Forex as you can loose all your money. Index Funds are the most likely way to increase your profit in the long term but ETF's (exchange traded funds) are very good-would suggest buying one's from Vanguard as they have very low "fees" I like VWO, VV, VB. I would suggest opening an account through Charles Schwab (or any convenient low cost broker) Do not use Full Service Brokers. Charles Schwab lets you buy stocks over the internet at low cost. There are cheaper brokers but often they are only cheaper if you do lots of trades. You are better off to buy one or two of the ETF's I mentioned and not touch the money for twenty years. So go to Charles Schwab's local office with your money, open an account and then go home to your computer and buy VV, VWO or VB. Do not ever let a broker sell you a stock or mutual fund. They will make you "broker". Broker's are used car salesmen with a little less slime. They are interested in making themselves richer-not you. There are no secret stocks on the market that only a few people know about. Don't believe that crap. If you go to Yahoo...Main pager) .then click finances, you will get to a page that will let you research stocks by symbol. If you are wanting to buy individual stocks rather than ETF's, try MO or BRK.B (sorry-over $2000 a share) or SHLD. These are all very safe. I won't make you a millionaire overnight with my advice, but I'll bet you do much better than most.

Answer 4

I'll give you 2 stocks - 1 safe stock and 1 that offers bigger gains and more risk. I own both of these.

The safe stock is Chesapeak Energy, CHK. This is a very well run natural gas company, that has not done well lately. It is very cheap.

The risky stock is Energy Conversion Devices, ENER. They make solar panels, and batteries for hybrid cars. Here is a link about their business:

http://www.top10traders.com/ViewPost.aspx?postID=197

This link is from http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks. The site ranks the best performing portfolios so you can see what the best investors are buying and selling.

Hope this helps.

Answer 5

seriously, these people saying to go to forex for a beginner should just be banned permanantly from the finance area, 20% a month? ok, so that 500 bucks turns in to 28 million after 5 years, yeah ok

as a beginner go to mutual funds, the easiest way to get a nice return is to pick one that goes off your retirement date, go to a no load fund company like vanguard,troweprice,or fidelity, start a roth ira if you dont have one, just call them or visit the sites

what i did was open one at troweprice for the 50 a month minimum, then you can transfer as much as you want,whenever you want, or the roth has a 1k minimum which ok for you, i think the taxable accounts are 2500

Answer 6

Given your experience & amt of $, your best bet would be index funds, since they outperform most of the actively managed mutual funds, and they have a much lower expense ratio than actively managed mutual funds. Look into Money or Kiplinger's magazine or search the net for index funds. And you can probably split that $2k between couple of different index funds (that track different indices or sectors) for diversification. You aren't likely to lose any sleep at night knowing that your investment is doing at least as well as the index it tracks.

Answer 7

Have you considered trading in FOREX (international currency exchange) instead of stocks?

With Stock trading with $500 to start with, you can trade on one stock out of 10,000 possible choices and if it goes up by pennies you make a little money but you pay trade commissions.

In forex, the same $500.00 lets you trade $50,000 worth of currency and only 5 major currency pairs to choose from and no trading commissions.

I am making about 20% per month trading forex. There is even software available that does all the trading for you and allows you to collect the profits even when your not there. You can even try it free for a month before you risk a cent of your own money.

For more information go to www.huttoinvestmentgroup.com and check it out.

Answer 8

Mutual funds...grow a nice base first before you start picking individual stocks.

Look at Vanguard or Janus.

Answer 9

Well, there are thousands. Look into GRMN, Garmin LTD.

Answer 10

I suggest Diamonds. (AMEX:DIA)