Where should I start out with building an investment portfolio?

Question

I think mutual funds would be best and safest for me right now. Do you have any other, possibly better suggestions? Is it better and/or cheaper to do it online? Where's a good place to start? I'm looking for low fees, low minimum balances, but good returns. (Of course!)

Can you suggest a good, reputable online discount broker to handle the transactions?

Answer 1

What do consider low minimum balance? Most mutual funds have about $2,000 to 3,000 if they are no load.

You do not require a broker to invest in them. You can go directly to the mutual fund internet sites and print out the necessary forms and send them in with a check.

Fidelity, T Rowe Price both have a very wide selection. Vanguard also but with higher minimums. Royce funds specializes in small cap stocks.

If $2000 is a higher minimum than you had in mind, then take a peak at American Funds--$250 minimum but the have a front end load of 5.75%. Despite the load they have excellent funds.

You can open an on line brokerage account and invest in ETFs, both index and closed end. There are hundres of each. Scottrade has a $7.00 transaction fee. Actually, many of the closed end funds sell at discounts to net assets. Like buying stocks on sale.

We would all like good returns, but there is no guarantee. Darn it.

Answer 2

Read about ETF (Exchange Traded Funds) there are plenty of those right now. I would go with ETFs that mirror some sort of indexes. The reason I like ETF is that they are so called non-managed portfolios. Basically you have SPY (Spiders) that simply mirror S&P500 or QQQQ that mirror NASDAQ 100 or many others. In mutual fund you have a manager that charges a fee for managing the fund, but in the end most of them can not beat the performance of S&P500, so why pay someone else to throw a dart.
Doing it online with a discount broker is just fine, I see nothing wrong with it. Now, as far as performance thing, noone can guarantee anything, what you want to do is come up with a strategy and stick with it, in a long run stock market goes up.
I personaly invest in these 4 ETFs:
EEM, EFA, QQQQ, SPY -- check them out. You can trade them just like a stock, yet you're well diversified.

Good luck.

Answer 3

Mutual Funds is a great place to start. (that doesn't mean they are safe- there is no guarantee in investing) but they are as safe as you want to make them. (how much money into Stock mutual funds VS how much money in Bond mutual funds.)

A very cost effective company is Vanguard. They only sell the no- load mutual funds ( no charge) and they have probably the best (lowest) expense ratio's on their funds.

But before you invest with any of these companies go to there free promotional programs they put on all the time. (trying to rope in new customers) But don't buy anything just keep learning until you see the best opportunity for you. And read the latest financial books at your local bookstores.

Answer 4

Safe always scares me. It is safe to say will lose purchasing power in a bank - that's why you have to get your $$ out of there. Schwab.com has hundreds of funds from multiple families with no upfront fees. Even so etfs often better although must pay broker free of 12.95-19.95 to buy. Closed end investment cos definitley better than mutual funds as sell for less than asset value unlike MFs. ADX PEO GAM for the latter. EFA & EWA 2 nice etfs now. Performance more importnat than <$20 in broker fess long term. Feel free to contact for more info.

Answer 5

start up with a small blend of sturdy mutual money which aren't any-load money ... examine out constancy Investments or the forefront team. Diversify, diversify, diversify. upon getting a most suitable portfolio of mutual money, you may start attending to understand and making an investment in human being stocks for the destiny. do not ignore to have 4-6 months of living expenditures in a money market account on your emergency fund.

Answer 6

One note on the above advice: While it's good, if you're starting with a small sum, the commission on ETFs can be too much. Generally you want to stay below 2% expenses, better to be closer to or below 1%. If ETF commissions would put you above that, look into no load/no transaction fee mutual funds.

Here's some brokers:
http://www.fool.com/dbc/dbc.htm?source=LN (4 compared)
scottrade.com