Yes you are at a good age to start investing, assuming you have money to invest. If you have money to invest, keep saving. Your money will really grow in amazing ways that way. If you have no money to invest start saving. After a few years, your money will really grow in amazing ways.
Now, onto actual investments. Seeing as you're asking for advice on Yahoo! Answers, you probably don't know all that much about investments. Don't take that as a criticism, you're young and I think you're definitely smarter than other people your age just for starting to think about investing. Anyways, at this point you probably shouldn't be putting tons of money into individual stocks. If your interest continues, then you can start trading stocks, but not yet. However, the best place for your money is the stock market. You can buy either mutual funds or index funds. With mutual funds, you are telling a person who picks stocks for a living to invest your money in a way that that particular expert sees fit. For their services, you pay that person;s company a percentage of your money (usually 1-2%). There are thousands of mutual funds and each has its own style of investing. Some invest in only companies that are socially responsible, some invest only in small companies with big growth prospects, some invest in medium size companies that an expert considers to cost less than their values, some invest in only real estate, and some invest only in developing countries. There are tons of choices. If you pick the mutual fund route, don't buy anything too specific or risky. Each fund requires that you invest a minimum of about $2500-$10000, so if you don't have enough money to invest in AT LEAST 4 or 5 different funds, then mutual funds are not for you. Each year, different types of funds will do better than others, so you need to have a variety to ensure that you won't miss out on big gains and to cover yourself from big losses. If you buy mutual funds, invest 20% in small-cap value, 20% in midcap growth, 20% in largecap growth, 20% in largecap value, and 20% in international stocks, but sticking with any of the big categories (so probably small cap growth or micap growth will suit you just fine).
Now, there are drawbacks to mutual funds. As stated, they take away 1-2% of your money. Also, you might read that 75% of stockpickers lose to the market. That means that only 25% of all mutual funds actually do better than a hypothetical investment that simply buys each stock that exists in proportion to how big the companies are (so you'd buy more Microsoft than No-Name inc.). And each mutual fund has ups and downs, so chances are that you won't choose a mutual fund that does better than this hypothetical stock market consistently. Fortunately, investing in the stock market is not hypothetical. With mutual funds and exchange traded funds, you can simply buy each stock in the stock market and your money will grow with the overall market. Moreover, you aren't paying for someone to actively pick stocks for you, so you pay less. Vanguard's total stock market index only charges about .15%. Pretty good huh? The only drawback, of course, is that your returns will always be lower than those of a top notch stock picker, but in my opinion the difference is negligible.
If this interests you, you should really start to read about buying your own stocks. The best way to truly make lots of money in the stock market, as opposed to simply growing your money, is choosing your own stocks. This is a pretty complicated process, however. You need to understand all sorts of things about the economy, the industry, and the business model of a stock. Just thinking, "oh that's a good company" will likely screw you over. So read up, it isn't that complicated and after reading some good books (read Graham, Lynch, and Buffet) you will be on your way to making great earnings in a controlled situation.
So for now, buy either mutual funds or index funds. Do your research on finance.yahoo.com and check out yahoo's fund screener. Make sure you always reinvest your dividends to make sure that your money really grows (this will not only make your investment grow but it will magically give you more of what you invested in). Open an account with a low cost brokerage (free for mutual and index funds) like firstrade.com . Buy funds from vanguard and t. rowe price because they are the cheapest. Good luck!
2007-01-05 07:04:44
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answer #1
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answered by chronic-what-cles of narnia 2
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This depends on what risks you want to take, you can take high risks and offcourse high profit rewards. Or rather low risks and also lower profits. But the key is to find the best possible combination of the two. I don't think annybody can say that you'll have to invest in this or that, because people have to little background information about you. For exmple what is your intrestfield (stock market, forex market, futures, investing in bussineses that are starting up, etc) another key factor to your investment is moneymanagement, is it money you'll need the next years or is this an investment on the long term? Is it money you got from a loan or is it money you saved up? The best you can do with this amount is to split it up (diversify), so you have different options. I would suggest: One cut is for safe investments ( like banks, etc) = not allot of profits One cut for medium investments (like giving out a small loan or investing in bonds, etc) = a bit more risk and also a bit more profits And last but ot least something that gives you a higher return but what also has a higher risk (so moneymanagement is the key here) Examples for this are: forex managed accounts, investing in stocks, futures, options, etc = a higher risk but also a way higher profitpotential.
2016-05-23 06:26:12
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answer #2
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answered by Anonymous
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It is a great idea to start investing while you are young. Once you start investing and saving, you become more motivated to save more. Stay away from credit card debt. Plan on buying a car without a car loan.
Read the following book to learn the fundamentals of investing: "The Little Book that Beats the Market".
Check out the following site http:/www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. There is also a charting feature , so you can see how your portfolio performs compared to the S&P 500.
Here are this month's best traders:
http://www.top10traders.com/Top10Standings.aspx
Good luck.
2007-01-05 11:54:18
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answer #3
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answered by Anonymous
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You are so fortunate to be young! Good for you!
There's something called The Rule of 72. Money doubles at the rate of interest divided into 72. So, if you can make 8% on your money, every nine years it will double. Thus, $100 invested at 18 will be $1,600 when you're 54. How cool is that!?!
I would suggest looking into Dividend Reinvestment. You can buy one share of a stock and then register it with a company. All the dividends go to buying more shares, and you can add more money each month. You can buy partial shares, too. So, if you put in the same amount each month, when the stock price is higher you get less but when it's lower you get more stock for the same money. It automatically means you buy more at lower prices, which is great. So you don't have to ever worry if the price is good.
Try Carlson's How to Buy Stocks Without A Broker for more details, or see www.dripinvestor.com or www.moneypaper.com.
Good luck! Congratulations on thinking ahead!
2007-01-05 06:38:34
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answer #4
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answered by Katherine W 7
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the best thing to invest in is a good mutual fund, when you do that you are buying shares in hundreds of companies at one time, and you have professional money manages with years of experience working on your account each day. you can start with a small amount of money. call vanguard and they can help you get started.......the name of the game when it comes to investing is taking advantage of time, and if you can get started at such a young age, you can make yourself very rich. they have examples to show you........get started right away, best thing you can ever do for yourself.
2007-01-05 07:21:06
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answer #5
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answered by besthusbandever 4
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Good for you. Start be investing in a book called My Own Story by Bernard Baruch and read it three times.
2007-01-05 06:46:03
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answer #6
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answered by Ivar 4
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The guaranteed way to double your money is to fold it in half and stick it back in your pocket.
2007-01-05 06:35:56
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answer #7
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answered by b4_999 5
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