Depends on when you are going to need the invested money again.
I would probably say get one of Vanguard's retirement funds for the year you are planning to retire.
The fund has one of the lowest management fees in the industry. The fund allocates your assets based on how close you are to retirement. So when you are younger and have more time until you retire the fund allocates your money mostly to stocks. Stocks over time have given greater returns but there prices tend to fluctuate more. When you are closer to retirement, the fund contains more bonds. Bonds offer lower returns but there prices tend to fluctuate less. The philosophy being that when you are younger, you can tolerate a more volatile portfolio because you have more time to earn lost money back. When you are older you will need the money soon so you can not tolerate losing a lot of money.
The retirement fund is an index fund. What this means is that it buys a set of stocks(bonds when you are older) that represents the whole stock market. The fund will not make the highest returns nor will it make the lowest returns. It will make returns that are slightly above average of most mutual funds.
There have been studies that show that most actively managed mutual funds do perform worse than index funds. I think about 65% of actively managed funds perform worse. The reason you will do slightly above average is that the fund has low management fees. A lot of mutual funds perform well/poorly simply from the fact that managers got lucky/unlucky. Plus, they require almost no monitoring on your part.
If you have any other questions I will try to answer them. Post edited by Friendo at 9/29/2011 7:35:10 PM
Nows the time to put money into Europe, both banking and large multinational corporations. Fear has oversold the markets there and the financials aren't as bad as they're made out to be. Ride it up 20% (probably around February), get out and get into commodities or small caps focused on emerging markets and infrastructure. Stay there for 5 years. Don't hang onto gold it's gonna pop...
Don't do index funds. The world economy is not in a growth spurt...friendo you dumbass.
Aren't you asian? How are you not good with money and numbers? What the fuck is going on here!?!?!?!?
Also... in all honesty. Go talk to an Investment Representative. I would plug the company I work for but frankly I'm not sure about Compliance and whatnot. Grant it I am logged in under an alias but meh... I'd just rather say talk to a professional when it comes to this. Not people in a gaming forum. ___________
I suggest you don't talk to an investment professional. They make money on your money whether you do or not. Plus, they are usually tied up in fund incentives to push money one way or another. Finally, much of the experience and traditional economic models they depend on no longer function in an upside down economy. Managers of large funds aren't nimble enough to take advantage of the micro-opportunities that are your primary chance to make money over the next 5 years.
This is a deep debt economy and the only way out is inflation, which the government well understands. Once you accept this fact, you will be able to move your money properly for the next 10 years to pump in and out of commodities and the few growth businesses there are.
Maybe the wrong forum for this question, but definitely the most intellectual thread that I've seen in years...
You need to take in a few factors into account:
1.) Your age (how much time did you want to invest; short or long term.
2.) Your goals/ambitions (what do you want to do with any dividends/pay-outs). Do you want quick, high-risk returns, or slow-growth, long term ones? What are you planning to do with any returns that you make? Reinvest or pull your money?
3.) Seriously, bone up on investing and talk to a *licensed* financial planner. A two-week course (or even a three day one) = lifetime of knowledge.
By the way kobe, you only invest money you have earned or been gifted or an inheritance.. if you got a big college loan check you don't invest capital you are paying interest on.
I would set up an emergency reserve, equal to about 1 year's income. I would put this money in a highly liquid(meaning you can sell it immediately without it losing it's value) investment, such as a money market fund. You can use this money in case you become unemployed, or a large unexpected bill comes up.
If you have any high interest debt, such as credit card debt, I would pay it off.
Once you do these 2 things you can start thinking about investing in more long term goals. Post edited by Friendo at 9/30/2011 1:18:55 PM
Originally posted by: Promethium- I suggest you don't talk to an investment professional. They make money on your money whether you do or not. Plus, they are usually tied up in fund incentives to push money one way or another.
You are wrong on this. There are some companies out there that have preferred funds yes because they have do good business with them. But some firms, including the one I work for, have no need to push specific funds. Some financial advisors do this, yes, because they have good dealings with certain investments. But they are not required to push anything and in the end. You have a say on what you want to invest in. They will not stop you and merely provide advice.
And no our Financial Advisors do not make money even though you lose it. That's ignorance talking and you should study more.
In the end. Just talk to a professional essence. You don't have to invest in them if you don't want to. But I would go to a local financial advisor's office and simply ask questions. ___________
Originally posted by: shyzter- By the way kobe, you only invest money you have earned or been gifted or an inheritance.. if you got a big college loan check you don't invest capital you are paying interest on.
Some of these loans can be 3-4 percent, plus the interest is tax deductible and the payments are easily deferred. In many cases, it might make a lot of sense to invest that money instead of paying it back.
Sorry Napkin, you seem like a nice guy and I know you truly believe what you're saying. But for clarity, where does the money investment professionals make come from? Oh yeah, its money they've taken from clients for doing jack shit. They're currently just an an necessary middle man at best, like a realtor. There was a day when you needed someone to manage you're money that had the pulse of the economy and a better understanding of the available tools. But face it, most of the training they have doesn't apply anymore or can be learned easily. ETF's have made it so you guys have no clue what's going to happen or what forces are at work, because it's not fiscals anymore. Media and corporate conglomerates are generating news and pumping in and out of markets before it goes to press. In short, the only money being made right now is people taking profit on others loss, most of which are riding on the long term investment wagon.
This is a no growth economy for the next decade and guess what, that means you're job is in deep trouble. Post edited by Promethium- at 10/3/2011 9:32:37 AM