Question for all the investors out there?

Question

Hey there people, here is little background on me. I am 25, single and ready to take chances in financial world. With that said, I have about 40k saved up so far. Considered my age factor, I want to invest around 30k and get high return. What will be some of the good options? I narrow it down to below, please let me know if there are other options outside of that.
(1) Stocks
(2) CD

If I go for stocks, how do I begin?

Answer 1

Well as you know people will first tell you the lecture about due diligence, do your own homework, blah blah blah. No one else can tell you what stocks to buy, blah blah blah.

Now that that's out of the way, I think you should take your 30K and put 5K into CDs at your local bank. Here is how to split up the other 25K into my "dream portfolio" of ETFs:

I call this the "dream portfolio":

The first one should be 25% of your money in XLG: an index fund that consists of the common stocks of the 50 largest U.S. companies: http://finance.yahoo.com/q/hl?s=xlg

The next (25%) is my personal favorite, the PEY. This Fund invests its assets in common stocks of companies that have a consistent record of dividend increases:
http://finance.yahoo.com/q?s=pey

The next one (25%) helps with diversification because it is NOT made of stocks. It invests in world currency and always returns better than bank interest:
http://finance.yahoo.com/q?s=dbv

The last one (25%) I like is a buy & hold for the long-term because it is an investment in water. The PHO holds companies worldwide dealing with the provision of potable water, the treatment of water and the technology and service that are directly related to water consumption:
http://finance.yahoo.com/q?s=pho

If you don't have a brokerage account then you can start with an online discount brokerage. Here is a list:
http://www.investorguide.com/links-dir-brokerlist.html

Your return could easily look like 15% per year with the above. Good luck to you!

Answer 2

ok. first of all, stocks and CD's are two completely different investments. You being younger and wanting a higher return, lets just scratch CD's out completely. (If you want a fixed income security, go with bonds, they will do well in the next year). Second, are you going to need this money in the near future or is this 30k invested going to stay invested for the next 5 plus years or even longer. Investing at 25, i believe this should be money you will not need to touch at all in the future, and let it grow. If you are unsure what stocks you might want, you can invest in mutual funds, which already predetermines what stocks are picked, combining this with bonds can help diversify your risk. Although, mutual funds do carry loads (fees) that wouldnt be there if you just bought stocks, I wouldjt recommend just picking stocks you want, there are programs that professionals use to determine the volitility of each potential investment and choose which works best for you. Your not going to get the advice you need on Yahoo!, i recommend contacting an advisor and let them know your situation. Make it clear that you want to know the fee structure of each potential investment, and do research, (contact multiple investment companies and determine the cheapest for you). If you want to start a small portfolio and invest lets say 5-8k yourself in stocks that you beleive will do well, i suggest going to etrade.com. Many of these stock trading sites will allow you to trade, manage, update and recieve vital info on your portfolio. This is an interesting way to invest and only cost about $8-$10 per trade. So you will want to make perminate decisions, you dont want to be trading every day or week, or even month. So for example take 8k, Do some research and find 10-15 stocks you find that may be profitable, all over the board if you want to. Meaning Large Cap, Mid-Cap, Small-Cap. If you want to make a replica portfolio and watch how your potential picks will go you can do it at yahoo finance, morningstar, msn.com, just about any site and build a portfolio. If you want some specific advice or example, here is my latest portfolio that i purchased in October 2006.
-Apple -Bristol-Meyers Squibb -DivX -Johnson & Johnson -Oceaneering Internat -PepsiCo -Mariott International -Genetech

My next investment will most likely hold...
-eBay -Mercury General -Versun Energy -Armor Holdings -AES... these are a variety of stocks, do some research, and put them into a replica, see how they do for a few weeks, Also none of these stocks are goign under all together, they should do well over the next year. G'luck

Answer 3

Before you invest in anything riskier than a small cap, or emerging growth mutual fund, read some basic books on how things work. Disregard the "experts", they almost always have an agenda different, if not opposed , to yours.

Sadly, the way brokers make their money is on the investment transactions, not your return on investment. Always fully understand the risk before you get into anything.

I suggest a novice, start out with a well-known mutual fund and take the risks only after you have research the vehicle where you are to invest your money.

Adult learning classes, college courses, on line investing universities and no-agenda web sites, not seminars and salesmen should be you first choice.

Answer 4

He didn't exactly say they were better investors, he pointed out some areas he thinks they're better at and then left it at they may very well be better investors. Let's not also forget this is solely his opinion. My guess is also this guy wouldn't be employed much longer if he came out saying men were better investors than women, espeically someplace like CNBC. Look at what happened to that Ivy League professor who made the comments women aren't likely to be as good in math or science as men. He created a firestorm with those comments. Comments like the ones you posted are just another article in the newspaper/magazine/etc.

Answer 5

If you want high returns, CDs are out of the question.

Besides stocks a good alternative is mutual funds. Check out Fidelity, T Rowe Price, Vangurade, and also check out closed end funds which are traded like stocks including index funds.

But for a beginner, mutual funds are an excellent investment vehicle.

Answer 6

First of all, i would suggest that you reconsider the break up. Invest only a maximum of 10 to 20 percent of your total capital in high risk investments. Do not risk as high as 75 percent, as you intend to do. Nevertheless, its your decision.

Second, if you are interested in investing in high risk, invest with some insight. Do not invest blindly on other people's advice. Remember, no one can care about your money than you yourself do. Investing just one or two percent of the amount that you are intending to invest will give you a lot of insight and help you take your owon decisions. For example, if I advise you to buy gold, at the next pull back, you should not only be able to determine the pull back but also be in a position to analyze my advise in the light of your own knowledge.

Thirdly, i'd suggest adding spot metals and Forex to your list. Infact, in the light of the ultimate level of continuity of the market as well as because of lack of commissions, I personally prefer forex over all else.

Finally, for stocks and CFD's you may consider optionsexpress.com, besides those mentioned above. For spot gold and silver, saxobank.com may be a good option and for forex you can try forex.com and gftforex.com. These are all good and reliable places.

Answer 7

Best idea to start with is to open a Roth IRA, contribute the maximum every year, which is 4000.
I would talk to a financial advisor, about the rest. CD's are safe, but wont yield much more than 4.5% now, but you wont lose anything.
Look into emerging markets to make a investment play into. Especially if you are going to tie your money up for a long time. Just invest it now, and forget about it.

Compound interest is the worlds greatest force. Einstien.

Answer 8

Open up a brokerage account with E-Trade or Ameritrade and start doing research on Yahoo Finance or other websites on stocks.

You can also look into Mutual Funds. T.Rowe Price is a good company. I read the book Mutual Funds for Dummies to learn how to set up my portfolio. It helps to diversify or invest in different types of companies (retail, manufacturing, high-tech).

Try to read books by Peter Lynch about investing. He has some good books out.

Answer 9

congratulations, stocks are riskier but they will give you amazingly large returns if done right. CD's give you less, but they are a lot safer and they give you more than bonds. Research stocks carefully before investing, on that note, check out companies that produce energy (solar, wind, ethanol, etc) since the market is looking for alternatives to petroleum. Good luck.

Answer 10

Buying individual stocks is very risky for the beginner but can be very rewarding at the same time (if you luck out).

Personally, just beginning for you, I would invest it in a no load low fee growth mutual fund. Maybe 40% in Large US cap growth fund, 30% US small/mid cap growth fund, 30% in an International growth fund......Still risk involved but you have financial managers looking after your money who study this stuff day after day. Pick up latest MONEY magazine and it lists all the mutual funds with track records for each one.