How should I invest my money?

Question

I am 20 years old, with about 10,000 dollars saved in the bank. I know the golden rule for all investors is "the younger you are the bigger the risk you should take" since you have all the years ahead of you to make up for any losses, if any. I want to know how to make the most of my money instead of just letting it sit in the bank and let it go to waste. I was thinking of diversifying my money in the stock market but I don't know enough about it to take that risk....

Answer 1

While you are young and inexperienced, keep it simple. Open an IRA (Roth or Traditional) and invest in mutual funds. At your age, you will want a combination of US and international investments. You will want a combination of funds that have strong performance of the short-term (3 year) and long term (10 year). Stay away from the volatile sector funds (health care, gold, energy, Russia, China, etc) until you have more experience in the market. Those funds should never make up more than 10% of your holdings (but wait 10 year until you become more comfortable with the market).

My best advice for you is after you make a decision and invest your money, DON"T MOVE IT. The market will fluctuate up and down, just let your investments grow. Making adjustments once per year or once every 3 years is fine.

If you have any questions, feel free to email them to me.

Answer 2

If you don't know the stock market, don't play it. Instead use a portion of it to invest in opening a Roth IRA. You can contribute about 4k a year into it. Starting at your age and contributing to it early will make it grow much faster. Keep in mind however putting the money into an account like a Roth IRA you cannot touch the money for about 45 years!!!! with out massive penalties. With the remaining money, look into the purchase of a home or money market accounts. If you have a job that offers 401(k) you could start putting money into that from your paycheck and live off the money you have in your bank.

Answer 3

Hi ,

I have what I think is a great trading system for you.
Unfortunately this system comes with so many problems that you probably won't be interested in it....

First, you don't ever have any losing days with this system and we never use stops so there are no losing trades.

Second, you don't use any charts and I know how much most folks love charts....as much as I used to love them.

Third, it only takes 30 minutes a week to trade. I know that you guys devote your lives to trading so this system "just won't do it."

Fourth, it only makes about 20% a month in profit so it will double your money every 3 or 4 months.

Fifth, it's not a directional trading system so it makes money in all markets whether the price goes up or down.

I was going to tell you about it but because it has all these problems, I won't bother you with it. I'm sure you wouldn't pay any attention to it even if you knew about it.

Paul Upp
http://www.15daytrial.com

Answer 4

No need to know much & can manage the risk. The stock market is not inherently risky. Market includes everything from Reits to Foreigh stocks. Key is to not think too much or read too much. Invest - don't speculate. If were complicated few could do it. Etfs & index funds cover all possible areas of investment simply. ADX PEO EWA EFA DBP all good starting points. Feel free to contact via answers for more detail.

Answer 5

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.

http://www.vanguard.com/VGApp/hnw/planningeducation
http://finance.yahoo.com/funds
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2007/vitindex.html
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
https://flagship.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education

Answer 6

note: i don't know if this could affect your opinion but this is coming from a 15 year old kid. i have about $50000 and have made about 11% profit in the past 2 months.
i've been in investing in a stocks and the q1 (1st quarter report which reports revenue, net equity, cash flow etc.) for rhwc is expected to be high which could boost stock prices. you can check it out. *i recommend going to this site*
www.undervaluedpennystock.com
and discussion board at
http://finance.google.com/group/google.finance.1834925/browse_thread/thread/c56f9a2fb8bdee4c
it's only at 0.155 per share and lots of people expect it to get to at least $1. personally, i believe in this stock and have about 100,000 shares, so if it goes up to a buck, then its a huge profit.
Note:there is still quite a bit of risk involved.
they just released a letter to shareholders if you want to see that
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070205005635&newsLang=en
you can invest however you like but i don't recommend you putting too much in. you never know what could happen.
hope this helps. feel free to e-mail me at [e-mail]

Answer 7

GO to vegas and bet alot of money
no im just playing

first buy a house that is real cheap

second remodel it

third sell it for double what its worth

Answer 8

Survey says............the best and safest way to go is saving bonds and certificates of deposit (CD). Both of these investments have guarnteed returns and are virtually safe.