| I am going to start investing. I need help. |
|
|
|
|
|
j4u_7
Member
Cash: $ 3.45
Posts: 15
Joined: 10 Feb 2006
|
| I am going to start investing. I need help. |
 |
|
I Just turn 18 and i am also working. I am planning on investing in stocks, real estate etc. But i don't know which is the best ones to start at my age. I only have a little knowledge about the stocks. I have read a lot of articles about investment opportunities in the developing countries like inida, china etc. but i don't know how to make a profit from those countries. CAN SOMEBODY HELP ME PEASE.
THANK YOU VERY MUCH
|
Fri Feb 10, 2006 3:15 pm |
|
|
Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
|
|
|
|
muneepenee wrote good advice, but sometimes I need a translator. muneepenee could you do me a favor and write once in your language and then once in Engish, please? "if em will" does that mean if they will? I would figure em means them, but then it wouldn't make sense, so I really do need a translator.
j4u_7
I would stay away from stocks at your age and your financial education level. Start out with just a savings account that earns at least 4% intrest, that's no risk except inflation and taxes. Then as it grows and you keep contributing to it, keep reading and educating yourself. Start out with easy books like investing for dummies, mutual funds for dummies and books. If you really feel you should invest in stocks look for stock investing for dummies.
If I was 18 years old and I had to start all over again, I would save 1k in my savings account and then open up a Roth IRA at vangaurd with just 1k and make automatic biweekly or mothly payments. I'm not sure what kind of job you have at 18 years of age, but I wasn't able to invest in a 401k plan.
It depends why you want to invest also, is it for income, retirement planning, fun...etc? Each one makes a huge difference. Stock investing can be fun, but that's about all I use it for, except for ETFs
|
|
Fri Feb 10, 2006 8:58 pm |
|
|
Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
|
|
|
|
At least you made it to number 5, I stopped reading after a few numbers.
emerging markets is a touchy subject. I personally am not a fan of emerging markets marekt. Recently it's done really well with a 5 year return of 18% give or take, but I consider it a high risk fund.
1997 = -17%
1998 = -18%
2000 = -28%
2001 = -3%
2002 = -7%
As you can see out of the past 10 years 5 of those years were negative and 5 were positve. If you only look at the past 5 year data the return like I said was 18% almost 19%, but the past 10 years the return has only been 8%. Something that has a 10 year history of being down 5 out of those 10 years is in my mind a high risk fund. I don't see anything wrong with investing in the emerging market, but I wouldn't put too much into this single fund.
Actually if you invest with vanguard, their total international index fund is not a single fund, but it's 3 funds that they invest in, so therefore 33% of this fund is invested in the emerging market index fund. It's a reason why vanguard's ETFs doesn't have an international ETF, but it has the 3 index funds that it's invested with.
Personally I do invest with the total intenrational stockmarket, so therefore I'm investing with emerging markets, but I wouldn't purchase emerging markets as a set allocation by itself personally.
|
|
Fri Feb 10, 2006 11:57 pm |
|
|
Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
|
|
|
|
Don't get me wrong coaster, I don't see anything wrong with people investing in these funds, but I just don't see it as having to be part of a retirement portfolio. As far as investing in funds outside of a retirement portfolio and when it's play money I don't see anything wrong with it as I don't see anything wrong with stocks either.
A person I know who has been investing for 40 years likes emerging markets and commodiites, but personally I'm not a fan. Honestly I'm not even a big fan of the total international stockmarket index, but I can understand putting a percentage in your porfolio as I do.
I see what you are saying about dollar cost averaging, but that's for investing with a porfolio that's low to take advantage of dollar cost averaging during the down years. If you have 100k in emerging markets and one year it goes down 30%, you're down to 70k. You lost the money on the holdings, you can keep dollar cost averaging, but your holdings is going to hurt you. If next year it goes up 10%, now your up to 77k. If it goes up another 10% the following year you're at about 85k, you're still down. My point is dollar cost averaging reduces risk for sure, but a fund with these returns is nothing I would put a retirement on. When you are 65 years old and you have a high allocation of emerging market funds like the The Aronson portfolio does with 20% and it goes down 28% in 2000 and at the sametime it's your retirement it's really going to hurt. The opposite effect of dollar cost averaging will happen as you are retired and when it goes down as we all know it's been down 5 years out of the past 10 years that's the time we want to buy more, but yet we are in retirement, so now it's down and we still need money to live. In retirement this could be the worst scenario. If somebody just seems to have faith in the emerging markets, then I wouldn't suggest anything over 10%. I really don't like the Aronson porfolio what so ever and I think it's crazy. The only other porfolio I know that directly has emerging markets as part of their investment is The No-brainer portfolio and they only hold 5% and if you look at the no-brainer porfolio it doesn't have international stockmarket index, but instead invests seperately in all three investments.
Basically the no-brainer believes in Slicing and dicing, so instead of doing 15% to the total international stockmarket it's split it up among the three with 5% a piece. Therefore I can only say The Aronson portfolio invests directly in the emerging market index fund and at 20%.
Actually if you've been following the porfolio like a lot of publications this past year it had a return of 13.77%. To be honest with you if you study the portfolio 40% of it is international. I would be willing to bet that if you compare any lazy porfolio that the Aronson will be the worst performing in 20 years from now. It's not that I'm so against international, but I would say even 40% invested in the total stockmarket is too high of a percentage. Even the couch potatoe portfolio only has it at 25%.
|
|
Sat Feb 11, 2006 10:32 am |
|
|
Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
|
You do make a strong point about a young investor and the year 1999 keeps looking me in the eyes 
Honestly I wouldn't mind having the fund in an ETF, but your advise about a young retirement isn't bad idea. I don't like much volatility to be honest also in my retirement account.
|
|
Sat Feb 11, 2006 4:57 pm |
|
|
efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
|
|
|
|
Admittedly 80-90% of mutual funds in any given market cap or sector may underperform their related index. But just because a fund is volitile is no reason to overlook it, if it outperforms its index or peers in the long run. If you make regular contributions (dollar cost average), cheap shares bought in the dips can make up for the ones you paid too much for. The hard part is weeding out the 80-90% that may underperform.
I started contributing to a widely diversified small co. international fund in my 401k when I saw it do 86% in one year. The next year it peaked and then tumbled 40% (asian crisis). But I kept plugging away at it while it was cheap, and it resumed its upward path.
Despite that +86%/-40% blip which dragged down its 5 yr return, and slipping a little this month from over 8% to 7.13% YTD 2006, its annual average returns have been 38.3% 1 yr, 42.7% 3 yr, 13.4% 5 yr, 18.5% 10 yr. It has had the same manager since 1994 and $10k in past 10 yrs would have more than doubled the return of MSCI EAFE NDTR_D or MSCI Wd xUSN (which I think are indexes).
When I first started investing IRA & Roth money 6 months ago, I wish I had picked EUROX (eastern Europe) instead of EUEYX (U.S. housing). My other pick ARTQX (mid-cap value) has done OK (closed to new investors). But I am just getting a handle on stock picking (offsetting up to 30% dips in some with 30%+ gains in others).
|
|
Sun Feb 12, 2006 2:41 am |
|
|
Kirby
Contributing Member
Cash: $ 5.40
Posts: 26
Joined: 25 Jan 2006
Location: Atlanta, GA
|
My short and sweet advice is to pick a solid ETF and keep adding to it. Also, maybe pick one or two speculative "cheap" stocks and see how it goes with that. When I say cheap, I don't mean penny stocks - just stocks that have low P/E's or are flying under the radar. You're young and can make mistakes.
|
|
Mon Feb 13, 2006 3:38 am |
|
|
j4u_7
Member
Cash: $ 3.45
Posts: 15
Joined: 10 Feb 2006
|
thank you all for the advise
|
|
Thu Feb 16, 2006 2:31 pm |
|
|
Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
|
|
|
|
The problem is that the high rates going up look so much better than when it goes down only half of that. Say you have 400k in an account and the fund goes up 80% like you said, then you're at 720k and you are thinking wow, I almost doubled my money. I went from 400k to 720k in just one year. Then it goes down 40%, so we're talking about bringing to down to 432k. So after two years you are at 432k, which is a not even 10%.
say I average 10% on the 400k for the next two years, I would be at 480k compared to the 432k. The downfalls hurt so much more than when it's up. People get too excited when they see their money double. I'd rather have a slow steady increase versus ups and downs that actually are worse off in the long run.
Like I said in retirement it's even worse. If you are retired and playing this game and it goes down 40% and you are in retirement, you aren't buying it cheap anymore, you are taking out money.
A lot of people only concentrate on buying cheap with dollar cost averaging, but what's more important is your holdings. When your holdings go down by half, but yet you are now buying a fund for 100 dollars a share instead of 200 dollars a share looks good, but you have a long time to wait for the rebound.
|
|
Thu Feb 16, 2006 2:56 pm |
|
|
marty12
Member
Cash: $ 2.30
Posts: 11
Joined: 31 Oct 2005
|
A good place to start might be well established companies. Buying such companies when they are undervalued for a long term position can be profitable. Long term positions help offset broker fees and realize more return before capital gains. Hope that helps.
|
|
Tue Feb 21, 2006 7:56 pm |
|
|
degarmo
Member
Cash: $ 2.70
Posts: 14
Joined: 22 Jun 2005
Location: Utah
|
While reading this thread, I noticed that there was no mention of Forex at all. Forex should be a part of any portfolio. If you have the right trader trading for you, like I ones I work with for example, you can make more faster in Forex than in any other market.
|
|
Sat Feb 25, 2006 4:03 am |
|
|
Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
|
I never recommended Forex, because I've never gotten into it. I also am not into any real kind of trading, most of my investing is buying and holding and even when I mention ETFs, I mean buying and holding.
|
|
Sat Feb 25, 2006 5:41 am |
|
|
lobsterlord
New Member
Cash: $ 1.65
Posts: 8
Joined: 19 Mar 2006
Location: Malaysia
|
Ya FOREX should be added. I am doing arbitrate trading which give me good return as well. I am doing sport arbitrate trading and will get into FOREX arbitrate trading soon. I dun like to invest in fund because my money is on other people pocket, trading myself i can keep my money under my control. If i loss money I had myself to blame.
|
|
Mon Mar 20, 2006 10:33 am |
|
|
|
