how should a new investor with little money invest their money?
Posted by admin in Finance Sunday, 16 October 2011 01:17 6 Comments
an investor that has never invested before and has less than $1000 to use.
Posted by admin in Finance Sunday, 16 October 2011 01:17 6 Comments
an investor that has never invested before and has less than $1000 to use.
If you have little money you should invest for long term in equity related mutual fund because only one investment beat inflation in longer term.
You need to ask yourself several important questions on what you are planning to do. What are you investing for? For how long? And how much risk are you comfortable with? How soon are you til retirement?
Without answers to those questions, nobody can suggest good investments for you. Not that several reckless types won’t try; suggesting high risk or flim-flam schemes where you can easily lose your shirt.
If you’re new to investing, study first. Read some good books like The Complete Idiot’s Guide to Investing, and Investing for Dummies. You can probably find them in your local library. Before doing anything, make sure you have enough in savings in case things go south for at least 6 months if you’re on your own. Also make sure you have bad debt like credit cards paid off first.
You need to learn also some important concepts in investing, such as dollar-cost averaging and compound interest – two of your best friends to make money for the future.
If you earned the money, and are planning for retirement, consider a Roth IRA. Your money grows tax free, and when you retire you can withdraw it tax free as well.
If you don’t want to spend a lot of time on choosing investments, than you might look at various Target Retirement Funds – many places have them, and they offer a broad diversification in the market that automatically adjusts to a more conservative investment as you get older in your working career.
You then need to pick a company to invest through. Some of the best are Vanguard, T. Rowe Price, Fidelity, and Schwab. Avoid the big banks like the plague. Don’t let them rip you off with loads (sales charges) and fees. Check how much the company charges you as an expense ratio. A good one might charge you 0.2-0.8 %. If they charge more than 1% than go somewhere else. And if they charge any kind of 12b-1 fee, hold on to your wallet and RUN.
For more information, try looking at
https://personal.vanguard.com/us/funds/vanguard/all?sort=name&sortorder=asc
and play with it, comparing funds with more or less risk.
Do some reading online such as
http://www.vanguard.com/us/insights
for some important investment truths.
Never take more risk for your harden money invest in very safe mode like bank FD
I would diversify your portfolio with 70% Blue Chip stocks like Mcdonalds, Walmart, Starbucks etc., and let your money grow. Those stocks are proven and yield about 8% a year, also GE is ridiculously low BUY NOW.
With the other 30% of your income I would go with some Small Cap Stock, if you do your research you can find the next Google or Apple.
Also open a Roth IRA account NOW!
Contribute the most which is $5,000, you will have over $2.5 Mil, by the time you withdraw it at 65.
1. Open an E*Trade account (My broker of choice, other options out there)
2. I would suggest to find an affordable pink sheet stock to invest in, your investing a small amount of money in a penny stock company.
3. My suggestion: JCOF.PK, Look it up and check it out. I’m up 280% in this stock and will continue to be long in it until it reaches $10.00.
you can invest as little as few hundred of dollars with the platform in my link.
don’t open a LIVE account at first, make sure you open a DEMO and test it for some time