Beginning to Invest Money

[dgtal36]

Hello mustang community,

So I decided to put a hold on modifying my ecoboost.

I want to start putting money away and start investing for a large short term return. My option is to invest in mutual funds but I also want to diversify my investments.

I was wondering if any of you do this already and wouldn't mind helping me learn the ways of investing? I'm completely new to this but I did do some research and just need pointers for information or personal advice.

By the way, I'm 21 and was thinking of using the money for a GT350 or a down payment for a house.
Also, I started investing with an app called Acorns but this is only for a very small return.

Thanks! :cheers:

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[Nylesw]

I started something a long time ago. Deposit my paycheck in another account and transfer what I can live on. Over the years I have earned much more money and still live in the amount I set. This enables me at first to start saving about 10% of my paycheck. Nowadays it's about 40%. Saving is the first step. Then you should start to look at long term investments with low fees and no hidden charges. There are many options. A good handful are in the favor of the place you invest with and not in your best interest. I trade stocks but I trade them long term and avoid options and slow bonds. Find something in stocks you enjoy and understand and get some long term evaluations on them. Most investment places have a feature to do this and will look at financials. Take a few classes there is many things to learn. Invest wisely and more important save wisely.

 

[cosmo]

Aggressive investing. I did this for about 2 and a half years. I came out about 6.5% above where I started, as I had beginner mistakes that I had to recuperate. I probably wouldn't do it again and instead would've paid off more on my house.

Before you jump into this, make sure this is money you can absolutely stand to lose. That you won't lose sleep over it if your choices tank, and that won't alter your current living state at all. Pay off ALL debts apart from your house (if you have one) first, as paying off debt which has >3% in interest is a guaranteed "return" of that %. Once you've done this, then start looking into aggressive short term investing.

 

[MikeD1]

1st off, don't invest based on stock tips from your buddies or Uncle Bob - the info is probably as reliable as getting tips @ the track from the guy in line in front of you.

Next, avoid stuff you really don't fully understand or are wicked complicated and/or volatile (commodities, precious metals, derivatives etc.). Plenty of time to fool with that stuff once you are more established & can weather something cratering overnight without looking to jump off a bridge.

DO max out (or as much as you can) your companies TDSP if they offer one, especially if they have any sort of "match". DON'T put all your TDSP $$ into company stock - research the crap out of the plans they offer (basically mutual funds) and pick something you are comfortable with.

If they offer a stock plan & it's a solid company, consider enrolling & buying at least a little.

Mutual funds can be way more complicated than they appear to be. I suggest you sign up for a MorningStar account and read, read, read. http://www.morningstar.com/
You can start with the basic access (free) and buy a subscription to all their data when you are ready to do some actual buying. If you are into commercial real estate at all, you might want to read up on REIT's.

Just getting started tho, you are probably better off with a discount brokerage account (ScottTrade etc.) and buying solid bluechip stocks. Don't get fooled into thinking you can flip stocks and make a quick buck (i.e. day trade). Yeah there are guys that got rich doing it but for everyone that made it, 100,000 others lost their asses. Ditto penny stocks !

Lastly, don't panic - more ppl lose $$ because they panic when the market drops (and it will) and dump their holdings. Forget timing the market, even the pros can't do it & being off by a day or 2 in any given market can make a HUGE difference. Do review your holdings from time to time and if they are under performing peer companies sell & move on.

And pat yourself on the back - you are WAY ahead of most of your peers !! The time you spend now learning about the market, funds etc. will pay huge dividends as you progress thru life. You are taking the 1st steps to being able to retire well (and early) and do what you really want with your time

 

[Nylesw]

Of all things short term get rich quick high risk is the most tempting as I already see suggestions above. But I will tell you the average person looses much more than gained in that category. You really need to be on your game to play with the Wall Street guys and honestly that's not a game you want to try. It's setup for you to lose.. Longer term safe investments will make you money on a more consistent basis. Good diversification helps if a few dive you should have winners that play to offset. Ya if you want to gamble 500 bucks go for it but when you buying 20-70 k in a stock it better be something with some backbone. If you save right that should be in your grasp with a half decent job and keep your eye on what's important and not blow all your dough.

 

[NowInSixth]

At 21 if you invest right, you'll retire with tons of $$$. I invested in beer. Lots of beer. :/

 

[ForTehNguyen]

max out 401k and Health Savings Account

 

[Shouldhavegotthegt]

Mutual funds are already diversified. I've got money in my IRA and my 401k. What I've done is put 50% in a S&P 500 fund, 25% in small cap, and 25% in international. Rebalance every quarter. Pretty simple. Accumulating wealth through investing and saving is a long term goal. It's not a short term scheme. That's how you go broke.

Read Money Makeover and Automatic Millionaire to get you started. You can open an IRA at Schwab or Vanguard.

 

[MagneticA]

Short term gains are fun to think about. But quick gains are dependent on what you are willing to lose. And it can be easy to get caught up in emotion that will cloud wise choices. For example, a person who is willing to lose $1,000 may put that in a stock and see an immediate 10% gain. 10% overnight is nice and easy... what if it were on $10,000...

You find yourself emboldened and willing to put up more than you might be comfortable with. And if it takes a dive you'll be stuck with the stock until it turns around, or you get impatient and sell at a loss to try to get into something else.

I suggest finding a company you like - someone who does something you believe in or someone who sells products that you enjoy. Study their stock history for a while. Determine a good price to get in on.

If you want to play the ultimate short game, go to Vegas.

 

[dgtal36]

Thank you all for the help! You all brought up some interesting points I should consider..except the beer investment ;)

 

[stang305]

Invest in Cldx you thank me later. Trades on Nasdaq. Bought at 3.80 making over 25% gain in less than month that stock will fly in less than year

 

[stang305]

I average about 100% return on stocks each year

 

[stang305]

If your scared in losing just set a stop loss at 4.50 to secure loss. Should be good

 

[dogiebitt]

Invest in Cldx you thank me later. Trades on Nasdaq. Bought at 3.80 making over 25% gain in less than month that stock will fly in less than year

It was at $174 in 2000, now it's at $4.12. 2003 through 2007 it was under $3 per share. That doesn't look like good long term investment.

 

[NHMustang]

Understand the companies that you own. If you cannot explain to someone what the company that you own does/produces then you should not own it.

I only I own dividend paying stocks and I do not speculate nor do I day trade.

Some of the stocks I own are:

ATT (T)
Apple (APPL)
DIsney (DIS)
GE (GE)
Verizon (VZ)
Glaxo Smith Kline (GSK)
Starbucks (SBX)

Solid companies with growth! Also deversified, well, except att & Verizon

Research!

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