how to start investment.

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how to start investment.

Postby twainerm » Sun Sep 01, 2013 7:55 pm

Hello,
I am completely new to investing. I am good at saving but never invested in anything more than employee stock purchase and 401k.
I would like to get started with investing. Investing sounds scary and I hear stories about how people lost their money. Is there anything I can do to avoid this other than not investing?
Please can anyone suggest how to get started with investment? What kind of investments I should make, how to make, is there anything I can read to get started?
Thanks so much,
Mark
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Re: how to start investment.

Postby Duckie » Sun Sep 01, 2013 8:32 pm

twainerm, start with Getting Started in the Wiki.

If you are contributing to a 401k plan and buying employee stock you are already investing.
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Re: how to start investment.

Postby JW Nearly Retired » Sun Sep 01, 2013 8:39 pm

twainerm wrote: Hello,
I am completely new to investing. I am good at saving but never invested in anything more than employee stock purchase and 401k.
I would like to get started with investing. Investing sounds scary and I hear stories about how people lost their money. Is there anything I can do to avoid this other than not investing?
Please can anyone suggest how to get started with investment? What kind of investments I should make, how to make, is there anything I can read to get started?
Thanks so much,
Mark

How to get started with investing? You have come to the right forum.... read the wiki on getting started. Then read a couple of books recommended there would be helpful. Come back with questions and plenty of folks here will offer advice.
http://www.bogleheads.org/wiki/Getting_Started

One thing I have to point out, if you have participated in employee stock purchases and your 401k that is "investing". You have already started doing it, so it would be best to learn more about it.

What funds to choose in their 401k and how to integrate the choices with other accounts like IRAs is possibly the most common investor question we address here.
Welcome to the forum.
JW
ps: I see Duckie already told you all this. I was too slow and wordy.
Retired Summer 2013
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Re: how to start investment.

Postby pennstater2005 » Sun Sep 01, 2013 10:03 pm

The recommendation of reading a good investment book shouldn't be taken lightly. I started with William Bernstein's "The Investor's Manifesto" and am glad I did. It was easy to understand and was a solid walkthrough from a brief history of investing, to possible ways to allocate your money in a low cost and diversified manner.
If U Cn Rd Ths U Cnt Spl Wrth a Dm
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Re: how to start investment.

Postby Jim180 » Sun Sep 01, 2013 10:16 pm

Yes, investing can seem scary at times and people can lose money in the short term. It requires patience. But if you do not invest you guarantee a loss. How? Because over time you lose 3% per year to inflation. $100 this year may only have the purchasing power of $97 next year.
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Re: how to start investment.

Postby twainerm » Thu Sep 12, 2013 1:26 am

Hi All,

Thank you all for your replies.

I went to "getting started wiki " and I read "The Bogleheads' Guide to Investing" and have several questions.

I would appreciate if anyone here can answer these:

1. Mostly the book is for investments towards retirement. What should I invest in, if I am looking for 2-3 years of duration? Say I want to save for trip to somewhere after 3 years.

2. What is "Money Market Fund"?

3. Based on what I understood, it seems to me that investing in index funds should be obvious choice of anyone as it mimics perfomance of given index. Then why do not people just invest in index funds and instead pick risky investments? Why invest in stock of a particular company and not in index funds which will mimic say SP500 - if SP500 is going down then it is likely that there are bigger problems in the economy and any other investment can be risky if SP500 itself is doing poorly. Am I missing something here?

4. If I buy a mutual fund - then when do I sell it?

5. How do I sell a mutual fund?

6. what quantity of index funds should I buy? Book does not mention about quantity?

7. Do I have open IRA at vanguard if I want to invest vanguard mutual funds? The chapter on "how to buy index funds" mentions I need to have an IRA.

8. I already have an IRA so can I open another one with vanguard if I have invest in their index fund?

9. Why does Vangurad ask for monthly payment if I want to buy index funds? can I just on buy them in one go and sell them when I want money?
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Re: how to start investment.

Postby ab80 » Thu Sep 12, 2013 2:15 am

1. People will tell you to use CD ladders or I-bonds and to stay out of the stock market.
2. You can buy a money market fund with Vanguard as a temporary place to stick cash if you don't know what to invest in yet.
3. They're not sexy. People like to hit home runs. Most people strike out.
4. Depends on your time frame. People here will tell you not to try to buy and sell timing the market, but instead to buy and hold.
5. You log in to your account and click sell. Sometimes this will be listed under "trade." If you have your bank linked, you can send it to your checking account, or else you'll most likely get a check in the mail. Fidelity just lets it sit in your brokerage account and you can then transfer to your bank account from there. Make sure you keep track of your cost basis and any tax implications.
6. As in, how many? A three-fund portfolio works well (total stock + total international + total bond). Some people like to spice it up by throwing in REITs, small cap, emerging markets, etc.
7. You can set up a taxable account as well. You should invest in an IRA first (either Roth or traditional), but if you have extra money left to invest, you can put it in taxable.
8. Yes. Most of their funds have a 3k minimum, and the yearly contribution limit is 5.5k for all of your IRA accounts, not for each one, so don't invest 3k in a Fidelity IRA today and 3k in a Vanguard IRA tomorrow.
9. I don't recall being asked for that. You can certainly invest only as often as you'd like.

You should set up a plan for what you're investing the money for, what your time frame is, a good asset allocation plan, etc. before getting started. Also make sure to have a sizable emergency fund in something safe and liquid.
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Re: how to start investment.

Postby Johm221122 » Thu Sep 12, 2013 2:22 am

1. That is saving not investing (bank accounts)
2.it is a fund that holds money(currently very low rate)
3.some people don't know any better , some know more
4. When you need money or want to consider changing investment to another asset class
5. Call or online
6.you need to choose AA(asset allocation) cash, stock, bond, or other asssets you want to
7.do you want an ira? Is this money for retirement fund? Do you want just vanguard funds?
8. Yes as long as you have not maxed out this years contributions and you can transfer other ira if you want
9. It is not necessary
John
Last edited by Johm221122 on Thu Sep 12, 2013 2:25 am, edited 1 time in total.
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Re: how to start investment.

Postby The Wizard » Thu Sep 12, 2013 2:24 am

Yes, our main focus is on long term investment, so you want to keep that separate from short-term savings for a vacation or replacement vehicle.
A lot of questions you have, so as others said, LEARNING is job one for the next month or more.
Where do you stand with credit cards and other loans?
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Re: how to start investment.

Postby kwan2 » Thu Sep 12, 2013 2:35 am

......well, it's a process, learning, i think you need to do more homework, and answer the easier ones on your own, and then seek clarification on things. why don't you find out what fund your 401k is, and google it, then you have a reason to learn it , a fund is a collection of stock, a stock is a share of ownership in a company.......

twainerm wrote:Hi All,
Thank you all for your replies.
I went to "getting started wiki " and I read "The Bogleheads' Guide to Investing" and have several questions.
I would appreciate if anyone here can answer these:
1. Mostly the book is for investments towards retirement. What should I invest in, if I am looking for 2-3 years of duration? Say I want to save for trip to somewhere after 3 years.

2. What is "Money Market Fund"?

3. Based on what I understood, it seems to me that investing in index funds should be obvious choice of anyone as it mimics perfomance of given index. Then why do not people just invest in index funds and instead pick risky investments? Why invest in stock of a particular company and not in index funds which will mimic say SP500 - if SP500 is going down then it is likely that there are bigger problems in the economy and any other investment can be risky if SP500 itself is doing poorly. Am I missing something here?

4. If I buy a mutual fund - then when do I sell it?

5. How do I sell a mutual fund?

6. what quantity of index funds should I buy? Book does not mention about quantity?

7. Do I have open IRA at vanguard if I want to invest vanguard mutual funds? The chapter on "how to buy index funds" mentions I need to have an IRA.

8. I already have an IRA so can I open another one with vanguard if I have invest in their index fund?

9. Why does Vangurad ask for monthly payment if I want to buy index funds? can I just on buy them in one go and sell them when I want money?
The best lack all conviction, while the worst | Are full of passionate intensity-Yeats 1919;Out of every fruition of success,no matter what, comes forth something to make a new effort necessary -Whitman
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