Help me invest $2000

[VanTheMan]

Originally posted by: BoldAsLove

Originally posted by: VanTheMan

Originally posted by: puffff
why go with a fund. learn a little bit about the stock market and make your own decisions.

I'd rather not have the stress and risk of buying individual stocks. If I was going to do that, I would want to study the market for several years and I'm looking to get something started right away.

believe me...buy a Cramer stock of the year...just hold it til year end and sell. Cramer says NYX is going to $240...believe it. Anything he says will push stocks up like crazy. Buy at the $100...sell some at $150...sell some at $200...then sell the rest at $240...easy money.

I could only buy like 20 shares, so that translates to a maximum profit of $2800 at the end of the year. It just seems like too big a risk for me to be taking right now.

 

[Vegitto]

Normally, I'd say 'spread', but $2000 isn't enough to spread.. Now, if it was $20.000..
To be honest, I suggest you save up a bit more before you start investing.

 

[VanTheMan]

Originally posted by: Vegitto
Normally, I'd say 'spread', but $2000 isn't enough to spread.. Now, if it was $20.000..
To be honest, I suggest you save up a bit more before you start investing.

How much do you think I should save before investing? What advantage would I gain by waiting when I can buy into a Vanguard index fund for $3000?

 

[Vegitto]

Originally posted by: VanTheMan

Originally posted by: Vegitto
Normally, I'd say 'spread', but $2000 isn't enough to spread.. Now, if it was $20.000..
To be honest, I suggest you save up a bit more before you start investing.

How much do you think I should save before investing? What advantage would I gain by waiting when I can buy into a Vanguard index fund for $3000?

During the saving, you COULD study the market, minimalizing any possible loss, and that can never hurt. You could also spread your possible losses or profits by either buying multiple separate stocks or multiple funds, or even funds and stocks. If I were to invest, personally, I wouldn't start until I knew what I was getting into.

If I were you, I'd start saving and learning, and when you think you've got it, you probably have enough money. Otherwise, I suggest starting when you have $5000-$7500. Please note that this must be money that can be lost, so that if you made a mistake or stocks would crash for some unknown reason, you aren't reduced to poverty .

 

[poncherelli2]

If you have or open a brokerage account you can buy a vanguard (or any other) ETF with as little or as much as you want. ETFs are nice because they trade like stocks, the only downside is that you will pay a commision every time you buy/sell. With the cost of places like scottrade being 7 bucks a trade its not a big deal unless you want to do a monthly savings plan or something, then you should look into a mutual fund to avoid getting hit with commisions every time.

VTI is vanguard's total stock market ETF, VBR is a small cap value, VV is a large cap. These would be a good place to start looking, but there are plenty of other fund families to check out. ETFs are a good way to track an index or get into a sector without picking and buying individual stocks.

 

[VanTheMan]

Originally posted by: Vegitto

Originally posted by: VanTheMan

Originally posted by: Vegitto
Normally, I'd say 'spread', but $2000 isn't enough to spread.. Now, if it was $20.000..
To be honest, I suggest you save up a bit more before you start investing.

How much do you think I should save before investing? What advantage would I gain by waiting when I can buy into a Vanguard index fund for $3000?

During the saving, you COULD study the market, minimalizing any possible loss, and that can never hurt. You could also spread your possible losses or profits by either buying multiple separate stocks or multiple funds, or even funds and stocks. If I were to invest, personally, I wouldn't start until I knew what I was getting into.

If I were you, I'd start saving and learning, and when you think you've got it, you probably have enough money. Otherwise, I suggest starting when you have $5000-$7500. Please note that this must be money that can be lost, so that if you made a mistake or stocks would crash for some unknown reason, you aren't reduced to poverty .

I guess I really just want something that's got lower maintenance and more security than stocks right now. Plus, I'm not in a position where I'll have $5-7k disposable income anytime soon. I'm mainly looking to put something away that will grow while I continue school. From what I understand, mutual funds are much safer than stocks. I could continue saving money and buy multiple funds or I could buy one fund now and another later this year.

 

[mithrandir2001]

Do not buy individual stocks. You need a portfolio of at least 15 stocks to be "properly" diversified and you cannot do that with $2,000 (or perhaps even $20,000). Do not let anyone convince you otherwise.

Vanguard requires at least a $3,000 minimum investment for nearly all of their funds. However, the Vanguard STAR fund has a minimum of $1,000. This is a balanced fund and currently has an allocation of 63% stocks, 25% bonds and 12% cash. This may be an option if you can let the money sit for 3 years or more....anything less and I would stick to a money-market fund.

 

[VanTheMan]

I would be willing to invest $3000 in a few months. I'm definitely planning on letting the money sit for more than 3 years.

 

[Gibson486]

Originally posted by: VanTheMan

Originally posted by: Vegitto
Normally, I'd say 'spread', but $2000 isn't enough to spread.. Now, if it was $20.000..
To be honest, I suggest you save up a bit more before you start investing.

How much do you think I should save before investing? What advantage would I gain by waiting when I can buy into a Vanguard index fund for $3000?

when you have enough money to actually back up a loss.

 

[JEDI]

Originally posted by: VanTheMan
I know these threads pop up every once in awhile, but I figured I'd start my own so I could get some current information.

I know very little about investing, but I want to start. I have several thousand dollars saved, so I'm thinking I could start with $2000 right now. From the research I've done, I'm thinking I want to go with a Vanguard or Fidelity index fund. I just don't know enough about them to make a decision on what fund to invest in. Any advice is welcome and appreciated.

all $2000 into Cree. (thats the symbol too.) it's a LED company. LED flashlights are going to be BIG in 2007.

LED

 

[mithrandir2001]

If you will have $3,000 in a few months then you could wait and invest in something like Vanguard LifeStrategy Conservative Growth Fund. Its stock allocation varies between 25-50% (depending on the opinion of the fund managers, it's at 50% currently) so it is a nice way to get started in investing without taking undue risks. It even has a 5% allocation to international stocks so you really get broad exposure to the markets.

 

[her209]

Originally posted by: bennylong

Originally posted by: BoldAsLove
put it in cramers stock of the year...and let it just ride for the year....NYX.

HUH?I thought the stock of the year was RICK

http://finance.yahoo.com/q/pr?s=RICK

HAHAHA... nice!

 

[IHateMyJob2004]

With $2K .. jsut make sure that your broker doesn't say it's under their minimum amount. Some will charge you a monthly fee if you have less than $XXXX in your account.

 

[SOONER]

Pay off any debt you might have first.

 

[bctbct]

Why not just put it in an online savings account and draw 5%. Easier, safer, and still liquid.

 

[Al Neri]

yeah like SOONER said... make sure these things are in line:

* Any debt that has an APR/APY of > 6% (I use that as a rule of thumb)
* The worst thing of it all is having 6 months of living expenses in an account like ING direct. (i know that sucks to have ...but it comes in handy trust me, wait for your brakes to go, or you need a new alternator in your car... or you have some other emergency)

then if you wish max out your RothIRA or other IRAs


then invest.

 

[jfall]

Buying lower priced stocks is the exact same as higher priced stocks, people don't seem to realize this.

I started investing earlier this year, I put $1,000 into one stock, and $1,000 into another and made a little over $600 in less than 2 months. Of course, you can't always expect these returns, however it's definitely possible to make a decent return off of $2,000

If you are looking for something on the safer side I would look into putting the money into a savings account with a 4-5% interest rate or a lower cost mutual fund

 

[AtlantaBob]

Lots of good ideas here. First step would probably be to have an emergency fund of 3 months living expenses if you loose your job/have medical bills/need car repair. That should go in a money market account or high-interest savings fund (not CD's--you can't pull the money out quickly enough there).

After you get that done, max out your employer-matched contributions for a 401K plan if you have access to that. Then it's a good thing to start investing in a Roth IRA (you have to pay taxes now, but won't have to pay them when you take the money out). That can be up to $4,000 a year. Then, it might be good to start putting some money towards a mutual fund -- probably since you're young, something invested in stocks, and perhaps a more aggressive fund than something that just invests in old blue chip companies. Vanguard's a great place with very low fees for both IRAs and mutual funds.

 

[gotsmack]

Just open a Roth or traditional IRA depending on how much your gross income is.

NYX is a monster along with the CME and NMX. Exchanges are going to do extremely well for the long term. Natural gas stocks are low right now like CHK and now until summer will be a good time to get in. I made an Energy and Natural gas play with DUK before their spin off of SE with my 2006 Roth contribution, I believe it to offer a good dividend and have excellent future growth.

 

[BigJelly]

7 months ago I was in your shoes--still in school and no retirement accounts or any investing. My money was just in Guaranty Bank's money market savings account (4.31% interest). Now that I have a job, chemist for Sigma-Aldrich, and my company's 401(k) plan is with Fidelity. So naturally I opened my roth IRA from Fidelity and this year opened my own investing account with them. So I know where you are coming from--still new to this but learning. I love Fidelity's website and couldn't go to another company given Fidelity's ease. Maybe you should check it out https://www.fidelity.com/">Fidelity's Link</a>. Check out the "Research" and "Retirement and Guidance" sections.

First and foremost, if this money is for retirement then I strongly suggest opening a Roth IRA (NO TAXES--except what the government took from you to get your $2k). On the down side, you can't touch it till your 59.5 years old (10% fine for taking it out before then). So make sure you won't need this money any time soon (I have a 5-6 month emergency fund so I should never have the need to touch my roth account). See the affects of roth vs non-roth IRA here: taxes suck--roth good.

If you are looking for a constant growth and stable investment check out FNMIX its a high yield bond from fidelity. $2500 to start (with $250 minimum additional investments). Its had a constant 11-15% annual return over the last 10 years. Last year it was 11.89% before taxes. Which gives you 7.83% after taxes from distributions and final sale of stock--note you don't pay taxes if its in a roth account. After taxes: 3-years it would be 8.33% (return per year) and 5-year 11.65% (return per year). This fund pays a monthly dividend of ~7.1 cents per share and a capital gain of ~45cents per share per year so don't let the stock price history fool you. Seems like something that would really work for you; good return and great security. I put my last years roth ira money here so I could spend more time researching and had a 4.732% return--not bad for 108 days (~16% annual return). Also check out Fidelity Capital & Income Fund (FAGIX) like FNMIX but with more growth/risk potential.

My ira money is now in much more risk/growth mutual funds but half of my emergency money is in FAGIX (other half in mutual funds). I do not see me chasing shooting star stocks--I'll stick to mutual funds.

Just my 2 cents.

EDITED: Bolded the edited parts.

 

[Engineer]

Originally posted by: BoldAsLove
put it in cramers stock of the year...and let it just ride for the year....NYX.

I watched that. I looked it up earlier and the P/E ratio of nearly 115 scared the crap out of me. Cramer said earning were going from $0.89 per share to $2.40 per share in just over 2 years. I'm not so sure about that one.....hehe!

To the OP: If you open an IRA account (regular or Roth), you can buy some mutual funds at a lower opening. I think you can buy into a Schwab S&P 500 index fund for an opening of $1,000 if you open their ROTH or regular IRA. Also, with a Roth, you can take your contributions (not earnings) out whenever you want since you have already paid taxes on the money.

 

[AnonymouseUser]

Originally posted by: Engineer

Originally posted by: BoldAsLove
put it in cramers stock of the year...and let it just ride for the year....NYX.

I watched that. I looked it up earlier and the P/E ratio of nearly 115 scared the crap out of me. Cramer said earning were going from $0.89 per share to $2.40 per share in just over 2 years. I'm not so sure about that one.....hehe!

Trailing P/E ratios are worthless, unless forward P/E is actually higher. Forward P/E (1 yr) for NYX is 43. As long as NYX keeps beating estimates and raising guidance (and the overall market is healthy) the stock will continue to go up.

 

[udonoogen]

if you really want to risk it, i'd buy stock in boston scientific. they bottomed out after purchasing guidant and after much scrutiny into the drug eluding stent market. however, the stents are safe and very effective (millions have been distributed) and the company is releasing taxus ii "soon." i think the company will come up to at least the 25 dollar range. but that's just speculation.

 

[ultimatebob]

Originally posted by: Engineer

Originally posted by: BoldAsLove
put it in cramers stock of the year...and let it just ride for the year....NYX.

I watched that. I looked it up earlier and the P/E ratio of nearly 115 scared the crap out of me. Cramer said earning were going from $0.89 per share to $2.40 per share in just over 2 years. I'm not so sure about that one.....hehe!

To the OP: If you open an IRA account (regular or Roth), you can buy some mutual funds at a lower opening. I think you can buy into a Schwab S&P 500 index fund for an opening of $1,000 if you open their ROTH or regular IRA. Also, with a Roth, you can take your contributions (not earnings) out whenever you want since you have already paid taxes on the money.

Some of Jim Cramer's picks are good, but some of them are BAD. The worst one that I've seen him pick was an Southern property insurance company right before hurricane Katrina. No, seriously.

That's why diversification is key.

 

[iversonyin]

Originally posted by: her209

Originally posted by: sjwaste
$2k isn't enough to diversify into invidivual stocks, and index funds have good returns in the long run.

I say screw diversification... all or nothing@!@@@!@

4 shares of GOOG!