What in the world should I invest in?

[jane78]

What in the world should I invest in?

I ask myself this question because of many exterior influences: the floundering stock market, a conversation I had with a former Merill Lynch higher-up about investing in commodities, radio commercials touting the price of gold in a volatile economy etc. *However,*Cracked.com assures me that investing in mutual funds has always been, and will remain, the safest way to invest your money, but it leaves me with other questions- mainly “what is a Mutual Fund?”. *Easily answerable questions aside, it’s still intimidating to look at the Finance page of the newspaper and see all of the companies and their corresponding values.* Choosing which companies to invest in seems like a guessing game to me. *In the days of downgraded credit ratings and mass bailouts, investing in any formerly financially stable company seems impossible. *Investing in other things, such as commodities or foreign currency, is even more foreign to me than stocks. *These investment decisions will continue to bother me until I figure out a way to master them, if I ever do.

[lorraineb]

Start with a stock index fund. it's easy to follow, has small fees and does better than most funds -- nothing to stress about or learn.

[bjl584]

You may want to seek the advice of a professional.

[Petunia 100]

What in the world should I invest in?

I ask myself this question because of many exterior influences: the floundering stock market, a conversation I had with a former Merill Lynch higher-up about investing in commodities, radio commercials touting the price of gold in a volatile economy etc. *However,*Cracked.com assures me that investing in mutual funds has always been, and will remain, the safest way to invest your money, but it leaves me with other questions- mainly “what is a Mutual Fund?”. *Easily answerable questions aside, it’s still intimidating to look at the Finance page of the newspaper and see all of the companies and their corresponding values.* Choosing which companies to invest in seems like a guessing game to me. *In the days of downgraded credit ratings and mass bailouts, investing in any formerly financially stable company seems impossible. *Investing in other things, such as commodities or foreign currency, is even more foreign to me than stocks. *These investment decisions will continue to bother me until I figure out a way to master them, if I ever do.

It absolutely is a guessing game. For this reason, many choose to invest in broad market index funds and avoid individual securities completely. Are you familiar with the term "index fund"? It is a mutual fund which mimics an index, such as the S & P 500.

[smk]

rule #1 in investing is if you don't know what you are doing, don't do anything. this should give you some space to learn.

start with your objective, what you need the money for. that is your target. learn about the instruments - start with stocks and bonds. commodities and foreign currencies are sidelines unless you live in another country. mutual funds are nothing but baskets of the underlying instruments i mentioned above. larry swedroe is a good author of technical materials like this to get you started.

[feh]

Start here: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

Stop reading/watching financially-themed media. Their purpose is to sell advertising, not to help you.

[snafu]

Jane, a great many of us started out understanding that we needed 'savings' but were bewildered, confused and unsure of how to start. I suggest you start with a retirement plan offered by your employer, particularly if you can capture any matching sums. If they offer a list of Mutual Funds, please list any 'Index' or 'Dividend' funds listed. All important are the fees or Management Expenses they are required to list.

A Mutual Fund is merely a collection of stock/equity bought by a well paid manager as a 'collection' to hopefully meet a target. If you do not have access to an employer program, it is a simple procedure to set up a personal account. We often suggest Vanguard because it is a well established investment company with a good track record, easy, uncomplicated to use, low fees and best of all - customer friendly. My preference is Dollar Cost Averaging [DCA]. It means once you've set up an account and paid the opening cost, you can arrange to have a sum automatically buy more units. The number of units purchased varies by the cost of the stocks. They go up and they go down but over many years the sum is awesome.

[jori]

Start with a stock index fund. it's easy to follow, has small fees and does better than most funds -- nothing to stress about or learn.

I would go with this option. It is nice and easy investment and you can go further when you feel you can handle bigger investments.

[amarowsky]

the advice given above seems correct.

If you don't know, read a few basic books to get knowledge about what is what i.e. bond/stock/etf/cod/mutual fund/futures/commodity. then research the company/sector/resource/industry you want to invest in that you think will be the safest return on investment that your willing to risk and go for it.

Two easiest and quickest ways I would say to make a snap judgement investment would be though and index fund or a mutual fund, because with a mutual fund your hedging your bet that the managers will do good with the fund because their money is YOUR money.

[fortiva]

A number of special plans are designed to create retirement savings, and many of these plans allow you to deposit money directly from your paycheck before taxes are taken out. Employers occasionally will match the amount you have withheld from your paycheck up to a certain percentage of your salary. Some of these plans let you withdraw money early without a penalty if you want to buy a home or pay for education. If early withdrawals are not permitted, you may be able to borrow money from the account, or take out low-interest secured loans with your retirement savings as collateral. Rates of return vary on these plans, depending on what you invest in, since you can invest in stocks, bonds, mutual funds, or any combination.

[CandaceKroslak]

Re:What in the world should I invest in?

I think real estate is one of the best investment because rate of interest is high and one will never regret after investing in it.But before investing in it one must know various facts related with it.

[AlfieHam]

Real estate investment is really good option, because it can generate income source and its cash value increase with the time.

[MatthewC]

Hi jane78,

Firstly, it is not as easy to invest in real estate (successfully) as some people think.

Secondly, indexing is for the stock-investing newbie. It's not the best choice, but on the flip side most people make worse choices in investing than indexing. Yes, most investors are stock-investing newbies. A lot of them just don't know it or won't admit to it. Stocks is a subject where tons of people are either uneducated, or just as bad (maybe worse) mis-educated.

If you want to learn about a better way to invest, read "What Works on Wall Street" (Fourth Edition) by James P. O'Shaughnessy. This book will take the guesswork out of investing in stocks, so long as you are investing for the long-term.

Anyone who tells you that stocks are a guessing game has not read the above book. It is the equivalent of someone telling you that when you roll two 6-sided dice, that there is the same chance of rolling a 5, a 6, or a 7. There's not, but the person telling you might not know that.