Barrius
New Member
Cash: $ 0.85
Posts: 4
Joined: 06 Aug 2006
Location: Texas
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Hello!
This is my first post on the forum, looks like a great place.
I am a 20 year old who has about $3000 I am looking to invest in a Vanguard S&P 500 index fund, which I have heard great things about. When I look at the website I see at the bottom that there was a time 5 years ago where if someone invested they would get a little more than a 2% return, while at other times like 3 years ago and 1 year ago the returns were significantly higher.
I was wondering if now was a good time to invest. Looking at the chart at the bottom of this page it looks like I may be hitting another peak right before it drops.
Am I reading this wrong or should I maybe hold off a bit before I put money into this fund.
Thanks for any help or any other investing options you could provide!
Barry C.
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Sun Aug 06, 2006 3:58 pm |
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Barrius
New Member
Cash: $ 0.85
Posts: 4
Joined: 06 Aug 2006
Location: Texas
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Thanks for the response. Yeah, I am interested in buying and holding for the long term... I am just afraid of getting that 2% overall return by beginning at the wrong time (or, even maybe a loss) as opposed to that 10% return. But I guess that goes with the territory!
I have been surfing around the internet for investing information--I am a student who does not really have the time it takes to follow the stock market daily, but I do have money lying around that I would like to invest and the CD rates where I bank are pretty poor. I am not in debt and do not like to use credit cards except occasionally for small things just to build credit.
I read from websites like fool.com and others just surfing around that mutual funds are a way to invest for those who can't follow the market daily, but most managed funds actually underpreform the market and have a lot of fees. But I read most index funds have less fees since they basically just try to model themselves after the index. I heard the S&P 500 was a good market indicator and that a fund modeled after the S&P often "beats" other mutual funds.
So, that's why I thought I'd try to get some ideas about it. =)
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Sun Aug 06, 2006 5:05 pm |
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Barrius
New Member
Cash: $ 0.85
Posts: 4
Joined: 06 Aug 2006
Location: Texas
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I didn't really understand dollar-cost-averaging until you explained it, thanks!
Yeah, I think they have a fee too for if your balance drops below $2,500. I was just looking at that. Maybe I should stick to trying to shop around for a good rate on a CD until I have a bit more money to invest. Since I do not have a line of income that will allow me to dollar cost average on a regular basis, I probably wouldn't receive the benefits I could from doing that, either.
Thanks so much for taking the time to help me out with my question. I have a lot to think about now before I make a big commitment.
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Sun Aug 06, 2006 5:25 pm |
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Barrius
New Member
Cash: $ 0.85
Posts: 4
Joined: 06 Aug 2006
Location: Texas
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Thanks for the illustration, you've definitely made me a fan of dollar-cost-averaging. I will also look into T Rowe Price.
It looks like the whole point is to stick with it, even after two years of -15% returns, hoping that your investment will go back up instead of getting scared and pulling your money out. I am amazed that example 1 still came out better than example 2 waiting for a market bottom, but the spreadsheet doesn't lie.
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Sun Aug 06, 2006 6:09 pm |
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oldguy
Senior Member
Cash: $ 751.85
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Joined: 21 May 2006
Location: arizona
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The most useful data on 'this sheet' might be -
Since Inception (08/31/1976) 11.99%
An average of 12% per year for 30 years is a pretty good record. If you put in $10k, you would have about $300,000 now.
I've told my adult children to 'just forgo that first new car and put that $30k into an SP500 Fund and forget it, you'll have a million in 30". No such luck, both kids drive new cars - LOL
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Sun Aug 06, 2006 11:10 pm |
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