My niece is 25 yrs old and she want to invest. What is the best plan to invest money?

Answer 1

Doofuss has a good answer. I would add to #1 Learn all you can about investing. (good starter book "Investing for Dummies" by Eric Tyson). Is your niece "on her own," has a job, apt.? Or student, living at home etc. If on her own, does she have an emergency fund in case she loses her job? The emergency fund should equal the estimated time it takes to find a new job and replace that income. After establishing the emergency fund, she is ready to save/invest. What is the goal for the money? Retirement 40+ years from now? Or buying a house, car, getting married, having kids etc less than 10 years from now. Realize that if she invested in mutual funds in Feb. 2000, just 7 years ago, the S&P 500 stock index was at 1527.46. Now it is still under that at about 1450. As Doofuss said: you could lose money, so don't sell as it will go up, but it may take a long time.
CDs, high yield savings bank accounts (see: www.bankrate.com) may be right for your niece. You did not give us enough information.

Answer 2

Since you're still very young and seems to want to do long-term investing, I would suggest you put $3000 of your savings in a Roth IRA investing in T. Rowe Price 2040 Target Fund, which would automatically allocate your money to stocks, bonds, and short-term supersafe investment according to years until retirement. I would then put another $3000 in stock account and buy SPY (maybe 30 shares or so). SPY is the symbol for a ETF that tracks S&P 500 index, which consists of the best 500 companies in US. I would then wait until next year to put another $3000 into the Roth IRA and invest in a global mutual fund. Make sure you specify this $3000 to 2009 contribution. I would put the rest in a savings or short-term CD account as emergency money. The good thing about Roth IRA is that any gains in the account are tax-free.

Answer 3

The best plan is
1) To learn all she can about the stock market and mutual funds
2) To Invest in high quality "No-Load" mutual funds and high quality stocks.
3) To diversify.
4) To be patient and disciplined.
5) To avoid selling if the investments go down. They'll go up again.
6) find good stocks that have "DRIPS" ( Dividend Reinvestment Plans) You will get a Compounding benefit.


A word of caution: Do not invest in a mutual fund right before it declares a dividend. Reason: The net asset value per share will drop according to the amount of the dividend. You will pay taxes on the dividend. and the value of your investment will be lower by the amount of the dividend per share that they paid out.

That dividend is not "Working" for you or for the fund any more.Let all of the net asset value work for you for the full period between dividends.

Answer 4

Select a no-load mutual fund. She can select from: long term growth, current income, Christian Values, Green Earth, Morally Responsible, Catholic Values, etc. Just google (or yahoo) the above terms with the words stock fund.

While I like individual stocks (from discount stock brokers, listed below) [ as I can decide for myself how much I value each company's actions in the above areas ] they are not for people that don't want to take the time & effort to follow a company's every action.

Answer 5

I suggest to invest in a fund like Fidelity. Low risk with good return.

Answer 6

If you are ready to face the risk it is better to invest in shares mutual funds etc.Higher the risk higher the profit. Risk diversification is main advantage of mutual funds.

Answer 7

Good for her for wanting to start saving early. Look into index funds through Fidelity of Vanguard.

Answer 8

there all very good plans, tell her to start studying all of them, so she can make her own decisions. [ anything above bank interest rates is the reason to invest ]

Answer 9

Open a brokerage account at Zecco and drop me a line.

I will help her for FREE.

Top 4 Answerer.

Answer 10

Buy land...they arent making any more of it.