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    lennyd's Avatar
    lennyd Posts: 26, Reputation: 1
    New Member

    Jul 5, 2007, 02:41 PM
    College Student Looking to Invest - Where to Put My Money?
    Like the title says, I'm a 19 year old college student looking to invest what money I've saved over the last year or so. I've managed to save roughly $10,000 to put towards investing (planning to eventually use it for a down-payment on a home), but my question lies in where to put my money.

    I know CD's are the safest bet, but I have no problem investing my money in something a little more aggressive for the chance at a higher return. I would love to achieve 10% return on my investment each year, which CD's won't give me. I can open a CD with my bank (Bank of America) with an APY of 5.05% (8 month short term CD), but would really like something more.

    Where should I be looking? One option I thought about was self-directed investing using Bank of America. They allow $0 stock/equity trades online for self-directed investors if you have a certain account with them (which I do). While I know this would require me doing my own research, I think I could wind up with a decent return if I do my own research and come up with a balanced portfolio of companies to buy stock in (stick with some big names like GM and such, while also purchasing stock in young up-and-comers). Would this be a smart idea? Or would I be better off handing my money to one of the big-name investment companies to manage and invest for me?

    I'm new to this whole investing thing! HELP!
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
    Uber Member

    Jul 6, 2007, 06:18 PM
    Hello Lenny:

    You have a lot to learn. In the meantime, you should let somebody else manage it for you. I don't disagree with your plan. You CAN learn to invest and beat the market - but you're not there yet.

    lennyd's Avatar
    lennyd Posts: 26, Reputation: 1
    New Member

    Jul 6, 2007, 06:24 PM
    Quote Originally Posted by excon
    Hello Lenny:

    You have a lot to learn. In the meantime, you should let somebody else manage it for you. I don't disagree with your plan. You CAN learn to invest and beat the market - but you're not there yet.

    Hm - not as in-depth an answer as I was looking for, but thanks none-the-less. Can anyone give me a little more specific advice as to where I should be looking to put this money? Even investing IRA's with Fidelity, Vanguard, or TRowePrice requires me to pick what Mutual Funds and such I want the money to be invested in.

    Would it really be best if I just hand my money over to a financial adviser and have them manage it? With the small amount of money I'd be investing ($10,000), wouldn't their fee's basically offset any gain I would be looking at short term (3-5 years)?
    ordinaryguy's Avatar
    ordinaryguy Posts: 1,790, Reputation: 596
    Ultra Member

    Jul 6, 2007, 08:09 PM
    Given that it will be a few years before you need to buy a house, you might consider a broad stock market index mutual fund. Index funds attempt to match the return of whatever market index they're set up to follow, e.g. Standard & Poors 500 or whatever. Expense ratios are typically lower than for actively managed funds because less trading is required. Vanguard has several to choose from, and I like them because of their relatively low overhead, no frills style. Very few actively managed funds end up beating the broad market indexes over the long haul.

    As far as being a stock picker yourself and trying to manage your own portfolio, I guess it depends mostly on how much time and effort and attention you're willing to devote to it. If you think it's something you'd be willing to devote A LOT of energy and focus to, I wouldn't tell you it's impossible to hold your money together and get a decent return, but it's a pretty big gamble, and realistically, your chances of doing better than a market index are slim, especially while you're learning. Most college students have more interesting things to do than pore over company financial statements and follow the business press. There'll be plenty of time for that later. I'd say study hard, have fun, and let the market float your boat without having to pay too much attention to it.

    You're absolutely right about giving your money to a manager to invest for you. If you're going to take that big of a risk and incur those kind of expenses, you at least ought to get some education for yourself out of it.
    nicespringgirl's Avatar
    nicespringgirl Posts: 1,237, Reputation: 187
    Ultra Member

    Aug 2, 2007, 06:56 AM
    Hey there,
    First of all, congrats on your savings!
    If you are interested in long-term gains, take about 50% of your investment and place it in an index fund. These are managed funds which do not place their stake on a few stocks, but rather the whole market. An example is an index fund that follows the growth of the S & P 500. This way, you are guaranteed to make money in the long run. Despite the fact that the market may crash, historically it has always rebounded. If you placed money in an index fund in 1900, despite the Great Depression and Black Monday (in 1987), you still would have made 7% (inflation-adjusted) per year. Indexing is a safe bet. Make sure to choose a fund with low expenses. And, most importantly, once you put your money in the fund, do not touch it.
    izhammm's Avatar
    izhammm Posts: 1, Reputation: 0
    New Member

    Jul 4, 2011, 06:48 PM
    Why not you invest in Malaysia. Especially residential land. You can call my mobile 0192171360. Investment return 200% or more
    MasterK's Avatar
    MasterK Posts: 1, Reputation: 1
    New Member

    Feb 29, 2012, 03:35 AM
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    4xallday's Avatar
    4xallday Posts: 1, Reputation: 1
    New Member

    Apr 24, 2012, 03:06 PM
    I invest in the Forex market and it has done very well for me. This is where I learned everything I know, check it out I think you will like it.
    gagagogo's Avatar
    gagagogo Posts: 1, Reputation: 1
    New Member

    Aug 30, 2012, 08:51 PM
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    kevinl4270's Avatar
    kevinl4270 Posts: 4, Reputation: 1
    New Member

    Oct 21, 2012, 02:40 AM
    Hopefully these answers have taught you a lot about seeking investment advice. I think Nicespringgirl nailed it. Congrats on saving the money, but in the grand scheme of things 10 G is not enough money to really build a well diversified portfolio of bonds and individual stocks, as well as non conventionals like REITs and maybe even some precious metals.
    Go for the lowest cost index funds with the lowest trading costs available. Once you build up a solid portfolio of index funds that cover growth, value, small and large cap, you can move on to internationol indexes and some of the other more exotics. Plus you want some bond funds as well.
    You are young enough that you can still recover from early mistakes as long as you learn from them.
    Good luck and investing should be a life long process that you should re-evalute at least yearly.

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