Need Help Investing
 

Hey guys. So random thread, but I have now graduated and been working for almost a year now. After expenses and crap I have saved a decent amount of dough.

Problem is that I dont know much about investing. I feel like an old granny just leaving it there in the bank. Any tips, suggestions, etc. just about where to start in terms of research?


We call out noobs all the time on this forum, but I am beyond noob when it comes to this field.

Re: Need Help Investing
 

Just spend it, didn't you hear the worlds gonna end in 2012?

Re: Need Help Investing
 

My area of expertise. I can help.

This is kind of a fun time for you, I remember thinking that way when I had just gotten a job. Being a finance major I knew how powerful saving and wise investing could be in the long haul. I enjoyed laying out my plan and executing it.

Here's the master plan:

Priority 1: If your employer offers a retirement program where they match your investments, contribute just enough to get the full match out of your employer. But don't yet contribute more until you work your way through the other priorities below. At your age, you should be 100% stocks. Choose mutual funds, or a mix of funds, that expose you to both international stocks and US stocks, small stocks and large stocks. PM me if you want details on selecting mutual funds.

Priority 2: Build a "nest egg" for emergency funding purposes. Everyone should have 6 months worth of basic living expenses saved. In case you get laid off or have some other sort of financial disaster, you save yourself a lot of money in the long run by using savings to cover those things, rather than going into debt to finance them. So tally up your basic living expenses (don't count video game money, going out money, etc. Just rent + utilities + food + car etc.) and figure out what you need socked away for "just in case." Store it in a money market fund (Vanguard) or a high interest savings account (ING) - you want this money to be very safe, after all it is for emergency purposes.

Priority 3: Reduce high-interest debt. Once you have your nest egg built up, start using excess income to pay down credit cards and any other high-interest loans. If you have student loan debt or a mortgage, just make the minimum payments. That stuff is tax deductible, let that float. Instead pay down the credit cards or other loans till they're gone.

Priority 4: Save for a home. Real estate is one of the best investments you can make in the long term, even if you're just buying a condo. The savings on taxes and the long-term buildup of home equity make it WAY better than renting. As you work towards piling your savings, I'd suggest socking it away in the same account as your "nest egg" fund. If you want to add a little more earning power, consider some lower risk bond funds.

Priority 5: Once the above are done and you're a home owner, it's time to get serious about retirement. While still taking advantage of the full match at your employer (if you have one), contribute to a Roth IRA if you qualify. The long-term tax advantage is most favorable. Open the Roth IRA with Fidelity or Vanguard, and select a mix of mutual funds (domestic & international, large & small). Go 100% stock and prepare to ride the roller-coaster. Combining your 401K and Roth IRA contributions, target a total annual contribution of 10% of your salary.

Priority 6: Once all of the above are going swimmingly, do something bad ass for yourself. Get that BMW. Move to a cooler house, whatever. You've earned it by now.

I'm happy to get into details if you wish. Good luck!

Re: Need Help Investing
 

My closest friend is a financial advisor. He works for a small asset management company in Gaithersburg (about $50M in managed assets). Their firm actually got audited recently because they did so well despite the recession. I'd be happy to PM you his info if you're interested.

Re: Need Help Investing
 

And listen to schneed. Great advice, very similar to what my buddy has been telling me.

Re: Need Help Investing
 

you're the UVA guy, shouldn't you be telling us? :silly:

Re: Need Help Investing
 

Solid advice from Schneed, not sure there's much more to add.

Re: Need Help Investing
 

[quote=Schneed10;672934]My area of expertise. I can help.

This is kind of a fun time for you, I remember thinking that way when I had just gotten a job. Being a finance major I knew how powerful saving and wise investing could be in the long haul. I enjoyed laying out my plan and executing it.

Here's the master plan:

Priority 1: If your employer offers a retirement program where they match your investments, contribute just enough to get the full match out of your employer. But don't yet contribute more until you work your way through the other priorities below. At your age, you should be 100% stocks. Choose mutual funds, or a mix of funds, that expose you to both international stocks and US stocks, small stocks and large stocks. PM me if you want details on selecting mutual funds.

Priority 2: Build a "nest egg" for emergency funding purposes. Everyone should have 6 months worth of basic living expenses saved. In case you get laid off or have some other sort of financial disaster, you save yourself a lot of money in the long run by using savings to cover those things, rather than going into debt to finance them. So tally up your basic living expenses (don't count video game money, going out money, etc. Just rent + utilities + food + car etc.) and figure out what you need socked away for "just in case." Store it in a money market fund (Vanguard) or a high interest savings account (ING) - you want this money to be very safe, after all it is for emergency purposes.

Priority 3: Reduce high-interest debt. Once you have your nest egg built up, start using excess income to pay down credit cards and any other high-interest loans. If you have student loan debt or a mortgage, just make the minimum payments. That stuff is tax deductible, let that float. Instead pay down the credit cards or other loans till they're gone.

Priority 4: Save for a home. Real estate is one of the best investments you can make in the long term, even if you're just buying a condo. The savings on taxes and the long-term buildup of home equity make it WAY better than renting. As you work towards piling your savings, I'd suggest socking it away in the same account as your "nest egg" fund. If you want to add a little more earning power, consider some lower risk bond funds.

Priority 5: Once the above are done and you're a home owner, it's time to get serious about retirement. While still taking advantage of the full match at your employer (if you have one), contribute to a Roth IRA if you qualify. The long-term tax advantage is most favorable. Open the Roth IRA with Fidelity or Vanguard, and select a mix of mutual funds (domestic & international, large & small). Go 100% stock and prepare to ride the roller-coaster. Combining your 401K and Roth IRA contributions, target a total annual contribution of 10% of your salary.

Priority 6: Once all of the above are going swimmingly, do something bad ass for yourself. Get that BMW. Move to a cooler house, whatever. You've earned it by now.

I'm happy to get into details if you wish. Good luck![/quote]
Boo your unsexy advice! Can't he just sink it all into gold and dance his way to the bank? I am sure I saw a guy on TV talking about that late one night. Forget Schneeds measured and long term approach. Go for the big play.

Re: Need Help Investing
 

[quote=Schneed10;672934]My area of expertise. I can help.

This is kind of a fun time for you, I remember thinking that way when I had just gotten a job. Being a finance major I knew how powerful saving and wise investing could be in the long haul. I enjoyed laying out my plan and executing it.

Here's the master plan:

Priority 1: If your employer offers a retirement program where they match your investments, contribute just enough to get the full match out of your employer. But don't yet contribute more until you work your way through the other priorities below. At your age, you should be 100% stocks. Choose mutual funds, or a mix of funds, that expose you to both international stocks and US stocks, small stocks and large stocks. PM me if you want details on selecting mutual funds.

Priority 2: Build a "nest egg" for emergency funding purposes. Everyone should have 6 months worth of basic living expenses saved. In case you get laid off or have some other sort of financial disaster, you save yourself a lot of money in the long run by using savings to cover those things, rather than going into debt to finance them. So tally up your basic living expenses (don't count video game money, going out money, etc. Just rent + utilities + food + car etc.) and figure out what you need socked away for "just in case." Store it in a money market fund (Vanguard) or a high interest savings account (ING) - you want this money to be very safe, after all it is for emergency purposes.

Priority 3: Reduce high-interest debt. Once you have your nest egg built up, start using excess income to pay down credit cards and any other high-interest loans. If you have student loan debt or a mortgage, just make the minimum payments. That stuff is tax deductible, let that float. Instead pay down the credit cards or other loans till they're gone.

Priority 4: Save for a home. Real estate is one of the best investments you can make in the long term, even if you're just buying a condo. The savings on taxes and the long-term buildup of home equity make it WAY better than renting. As you work towards piling your savings, I'd suggest socking it away in the same account as your "nest egg" fund. If you want to add a little more earning power, consider some lower risk bond funds.

Priority 5: Once the above are done and you're a home owner, it's time to get serious about retirement. While still taking advantage of the full match at your employer (if you have one), contribute to a Roth IRA if you qualify. The long-term tax advantage is most favorable. Open the Roth IRA with Fidelity or Vanguard, and select a mix of mutual funds (domestic & international, large & small). Go 100% stock and prepare to ride the roller-coaster. Combining your 401K and Roth IRA contributions, target a total annual contribution of 10% of your salary.

Priority 6: Once all of the above are going swimmingly, do something bad ass for yourself. Get that BMW. Move to a cooler house, whatever. You've earned it by now.

I'm happy to get into details if you wish. Good luck![/quote]

Very good info here. The only thing I would add is when investing in your employers retirement program do not put all you money into the companies stock. Think Enron not only did all those people loss their jobs they lost their retirement saving because they had all their money invested in Enron.

Re: Need Help Investing
 

One more thing regarding cash management of your standard checking account and your "emergency nest egg".

To maximize the return on your nest egg cash, you should allocate it properly between your regular checking account and your high-interest savings account or money market fund. At the same time, you want to keep your life simple in this aspect. So I suggest this:

- Figure out what 6 months of expenses amounts too. That's your "nest egg" amount.

- Keep a minimum of $500 - $1000 in your checking account at all times. It will fluctuate up and down based on when you get paid and when you pay your bills, but at its low point the checking account should have $500 in it.

- Keep the rest in your nest egg high interest savings account, so that if you added the balance of your checking account and the balance of your nest egg account, they'd equal 6 months of expenses.

This does not need to be an exact science. But this basic rule of thumb will keep you from having to constantly transfer funds back and forth from nest egg account to checking account. At the same time, you'll be keeping most of your money in the high interest savings account, earning interest on the majority of your emergency stash.

Re: Need Help Investing
 

[quote=firstdown;673014]Very good info here. The only thing I would add is when investing in your employers retirement program do not put all you money into the companies stock. Think Enron not only did all those people loss their jobs they lost their retirement saving because they had all their money invested in Enron.[/quote]

Great point, diversification is important. Don't put all your money in one company or even one mutual fund, spread it around so you're invested in US stock funds, international stock funds, small company funds and large company funds.

My favorites for retirement accounts:

Fidelity Contra Fund (large cap US)
Fidelity International Discovery (international stock)
Vanguard Small Cap Index Fund (small cap US stock)

I do a mix of these three. I'm 30, and am about 50% Contra Fund, 25% International Discovery, and 25% VG Small Cap Index. You're young too, so a similar mix is in order for you.

They all keep expense ratios fairly small, which means more money stays in your account. There are lots of other great fund options out there though, you can research on Morningstar to learn more about them. The most important things to look for are the expense ratio (target funds with less than 0.5%), and make sure it's a no-load fund (which is a fee to make the initial investment).

Re: Need Help Investing
 

And one last thing, when you invest in stock, be prepared to ride the roller coaster. You will see your balance go up and down, sometimes drastically, from year to year. In 2008 my account lost 45%. In 2009 it gained 35%. Over the long haul, these big swings tend to even out in your favor, and you end up earning more with stock than you would with bonds.

Stocks are generally a bad idea for any money which you will possibly need to use within 10 years. Once you get within that time horizon, it's time to add some bonds to the mix. That's why you choose very safe investments for your emergency nest egg, and aggressive ones for retirement funds.

You've got a long way towards retirement, so get the earning power of stocks on your side:

A 25 year old investing $3000 per year in stocks, at an average of 8.5% return, will have a balance of [B]$965,000[/B] upon retirement at age 65.

A 25 year old investing the same $3000 per year in bonds, at an average of 6.5% return, will have a balance of [B]$565,000[/B] upon retirement at age 65.

The extra 2% earning power is worth nearly double the $ over a 40-year period.

Re: Need Help Investing
 

Thanks guys for all the feedback. I will send you back responses if i need a bit more information.

I will also go over the specifics this weekend, when i get a breather from work.


As for my UVA background, I am an economics and foreign affairs major. So I know a decent amount economic cycles, consumer behavior, economic theory, etc. I have also taken a couple financial classes in college, but not a ton. Most of my financial classes divulged into discussion of the current financial situation and potential causes. So I do have a general understanding of concepts such as diversification, how i should be 100 stocks now, getting my employer to match my contributions. I am good in terms of the macro, but i need to work on the micro, to put in econ major terms.

Re: Need Help Investing
 

Hoo, good luck. its a crazy world we live in

Re: Need Help Investing
 

do what i did. build up a nice 401k over 5 years or so. have the stock market take a nose dive cutting your 401k in half. then when money gets tight and you need to pay the bills, you can take a loan out against your own 401k with penalties and all!!

i have a real question thoo. should i be putting money back into my 401k now? ive been putting money in my money market account (easier to access if you need some cash) and CDs.

Re: Need Help Investing
 

My 401k has bounced back pretty strong after the '08 dive it took.

Re: Need Help Investing
 

[quote=over the mountain;673038]do what i did. build up a nice 401k over 5 years or so. have the stock market take a nose dive cutting your 401k in half. then when money gets tight and you need to pay the bills, you can take a loan out against your own 401k with penalties and all!!

i have a real question thoo. should i be putting money back into my 401k now? ive been putting money in my money market account (easier to access if you need some cash) and CDs.[/quote]

Yes, you should be contributing to your 401K, especially if your company matches contributions.

If they match, and you don't take advantage of it, it's like walking right on by a table with a pile of money and a sign that says "free".

I know this is too late now, but never tap into your 401K before retirement, this is extraordinarily costly. Instead build an emergency fund to tap into when emergency strikes. Once the emergency fund is sufficiently established, increase your contributions to your 401K.

Re: Need Help Investing
 

[quote=Mattyk;673045]My 401k has bounced back pretty strong after the '08 dive it took.[/quote]

Mine did too, because I didn't panic, didn't pull my money out or switch it to bonds. Instead I rode the rollercoaster down and then back up again, when the stock market bounced in 09. Now I'm not too much worse for the wear, because I kept a level head.

Re: Need Help Investing
 

Oh, and it goes without saying, live within your means! Don't spend more than you earn. In fact, spend less than you earn, save the rest.

Re: Need Help Investing
 

[quote=Schneed10;673027]And one last thing, when you invest in stock, be prepared to ride the roller coaster. You will see your balance go up and down, sometimes drastically, from year to year. In 2008 my account lost 45%. In 2009 it gained 35%. Over the long haul, these big swings tend to even out in your favor, and you end up earning more with stock than you would with bonds.

Stocks are generally a bad idea for any money which you will possibly need to use within 10 years. Once you get within that time horizon, it's time to add some bonds to the mix. That's why you choose very safe investments for your emergency nest egg, and aggressive ones for retirement funds.

You've got a long way towards retirement, so get the earning power of stocks on your side:

A 25 year old investing $3000 per year in stocks, at an average of 8.5% return, will have a balance of [B]$965,000[/B] upon retirement at age 65.

A 25 year old investing the same $3000 per year in bonds, at an average of 6.5% return, will have a balance of [B]$565,000[/B] upon retirement at age 65.

The extra 2% earning power is worth nearly double the $ over a 40-year period.[/quote]

A 25 yr old forced to pay Social Security at $7,000 per year will be lucky if there is even any money left at age 65.

Re: Need Help Investing
 

What about the lottery? I heard that's a great investment vehicle.

Re: Need Help Investing
 

[quote=firstdown;673053]A 25 yr old forced to pay Social Security at $7,000 per year will be lucky if there is even any money left at age 65.[/quote]

That's why we're talking about saving on our own, anybody that's relying on SS is insane. Or just dumb.

Re: Need Help Investing
 

[quote=over the mountain;673038]do what i did. build up a nice 401k over 5 years or so. have the stock market take a nose dive cutting your 401k in half. then when money gets tight and you need to pay the bills, you can take a loan out against your own 401k with penalties and all!!

i have a real question thoo. should i be putting money back into my 401k now? ive been putting money in my money market account (easier to access if you need some cash) and CDs.[/quote]

If you have solid funds now is a great time to put money into a 401. Most of the time your buying units (might be call something else) and with stock prices down you units buy more stocks so when the stocks go back up you see a better return. When stocks are up an your investing your unit buy less stock for the same amount of money.

Re: Need Help Investing
 

[quote=saden1;673055]What about the lottery? I heard that's a great investment vehicle.[/quote]
It must be because I have to wait in line 5 minutes everyday to pay for my coffee as the cashier has to run all those lottery cards for people who have no business playing the lottery.

Re: Need Help Investing
 

[quote=Schneed10;673050]Mine did too, because I didn't panic, didn't pull my money out or switch it to bonds. Instead I rode the rollercoaster down and then back up again, when the stock market bounced in 09. Now I'm not too much worse for the wear, because I kept a level head.[/quote]

I actually increased my contribution shortly after the crash, just checked on my 401k and it actually has more than doubled since 11/08.

Re: Need Help Investing
 

[quote=Schneed10;673050]Mine did too, because I didn't panic, didn't pull my money out or switch it to bonds. Instead I rode the rollercoaster down and then back up again, when the stock market bounced in 09. Now I'm not too much worse for the wear, because I kept a level head.[/quote]

trust me i tried not to tap into it b/c i knew taking money out (after i took the hit) was stupid since the market would bounce back. i wish i could have started pumping more money into it a year ago but i was broke broke and had no other alternative but to take a loan out.

i was between a rock and a hard place.

im sure my situation was like alot of other people. some of us just didnt have enough of a cushion to ride it out.

Re: Need Help Investing
 

[quote=Mattyk;673061]I actually increased my contribution shortly after the crash, just checked on my 401k and it actually has more than doubled since 11/08.[/quote]

Really? What was your rate of return in 2009 and what funds are you buying?

Re: Need Help Investing
 

[quote=saden1;673063]Really? What was your rate of return in 2009 and what funds are you buying?[/quote]

According to my year ending statement for 2009 my annualized rate of return was 26.5%

My funds are:

Janus Twenty 60%
Vanguard Total Bond Market Index Fund 20%
Vanguard Wellington Fund 20%

Re: Need Help Investing
 

Schneed. Few questions here myself. First of all, I'm relatively young (26) so I have my 401K (taking advantage of the max amount of matching) on the most aggressive setting it can go on, last quarter it did pretty well. Considering I haven't worked much, it wasn't a lot of money, but that will change in time. How long would you leave it on aggressive? I was thinking the first 10 years, then pulling it down to moderate.

I know you push stock, but watching my grandmother deal with stock has really turned me off. Cost basis BS, the fact that turning it in can skyrocket your income bracket that year, etc. It's been such a hassle I kind of want to avoid it. If it ends up being the most effective investment vehicle, then so be it -- but it seems like a huge hassle.

Where do you stand on IRAs? I was under the impression that the return from IRAs were quite good and that should be the 2nd thing, after your 401K, that you focus on as a young person saving for the future.

Thanks!

Re: Need Help Investing
 

[quote=Daseal;673066]Schneed. Few questions here myself. First of all, I'm relatively young (26) so I have my 401K (taking advantage of the max amount of matching) on the most aggressive setting it can go on, last quarter it did pretty well. Considering I haven't worked much, it wasn't a lot of money, but that will change in time. How long would you leave it on aggressive? I was thinking the first 10 years, then pulling it down to moderate.

I know you push stock, but watching my grandmother deal with stock has really turned me off. Cost basis BS, the fact that turning it in can skyrocket your income bracket that year, etc. It's been such a hassle I kind of want to avoid it. If it ends up being the most effective investment vehicle, then so be it -- but it seems like a huge hassle.

Where do you stand on IRAs? I was under the impression that the return from IRAs were quite good and that should be the 2nd thing, after your 401K, that you focus on as a young person saving for the future.

Thanks![/quote]

Glad to help. First let's clear up a little confusion. On one hand we're discussing account types, and on the other hand we're talking investments. The basic difference, the account holds your investments. There are different types of accounts which feature different tax advantages, but you can own the same investment in any given type of account. Let's talk about account types first, then get to the investments:

[B]Account Types[/B]

A typical 401K and a Traditional IRA have the exact same tax benefits. You put money in tax free, then it's taxed when you take it out upon retirement.

It's just that with a 401K, your money gets deducted from your paycheck pre-tax, and dumped right into the 401K. With the IRA, you're actually taken money from your checking account (after taxes), and investing it. So with the IRA you can deduct it on your tax return, making your refund bigger. But in the end, the refund from such an action equates to the exact amount of taxes you save on an equal contribution to a 401K.

In other words, there's no difference between a 401K and a Traditional IRA.

Now a Roth IRA is different, and better. I advise contributing just enough to your 401K to get the match, and then direct any additional retirement contributions to a Roth IRA. The Roth IRA allows you to put the money in after taxes, so you get no immediate tax benefit. But when you withdraw from it in retirement, you get it all tax-free. With the way the math works on the compounding interest, you're MUCH better off with a Roth. You've got to make under a certain amount of money to qualify for a Roth, I think it's either $75K or $100K.

These retirement accounts (Roth IRA, 401K, and Traditional IRA) are all great for housing stock investments, because they offer tax advantages. If you own stock in a "taxable" or "brokerage" account, like your grandmother did, you miss out on maximizing the tax advantages. So keep that stock in a retirement account, you won't have the same horrendous capital gains hit.

So that's a summary of account types. As for investments (stocks vs bonds vs stock mutual funds vs bond mutual funds), you can own just about any investment in any of these account types.

[B]Investments[/B]

[B]For a retirement account (401K, Roth IRA, Traditional IRA)[/B], I suggest you stay 100% stocks until you are within 15 years of retirement. So if you expect to retire at 65, stay 100% stock until you're 50. From there, gradually mix in more bonds as you get closer to retirement. Reason: if you look at the S&P 500 over any given 10 year period in its history, it has never lost money. Ten years is enough time to rebound from any recession, so give it 10+ years, it's plenty of time to ride the roller coaster.

[B]In a taxable or brokerage account[/B], keep 6 months of expenses in cash (high-interest savings or money-market). That money HAS to stay very safe, because you may need it at any time. After that, any savings beyond that you can choose to get more aggressive with if you want, but follow these rules of thumb:

- If you think you may need or want to use the money inside of one year, choose money market or high-interest savings.

- If you think you may need or want to use it between 1-3 years, choose municipal bond funds or other government bond funds.

- If funds are needed 3-10 years out, feel free to mix in some corporate bond funds.

As for your grandmom and withdrawing from stock or any other investment vehicle, do it gradually. If you do it all at once, you'll jump in tax brackets and get hit with a big tax bill. In retirement, just take out what you need to support yourself for a six month period. Then when that dries up, withdraw another 6-month chunk.

Re: Need Help Investing
 

Sort of my area of expertise so I'll add in my 2 cents...

Considering I live in Canada and our laws are different concerning taxes, IRA, 401K, etc. I will refrain from giving global financial advice. Besides Schneed covered that very well, I would take his advice on all counts.

But I can comment regarding stocks. I've been through the recent crash as well as the dot com bubble in 2000 so I've taken my investing lumps and I've learned some lessons that I follow today.

- I NEVER buy individual stocks anymore. I lived through Enron and Worldcom and I will never trust an individual company again, I don't care how big they are. For instance I love Apple but I would never buy it straight up. They could go bankrupt tomorrow and it wouldn't even shock me. With that in mind I recommend buying ONLY mutual funds or ETFs.

- Personally I own zero mutual funds, 100% ETFs. Why pay a fund manager 2% to underperform the market when you can buy the market and save the 2%?? And don't try to "beat the market", just try to "match the market" and keep your fees as low as possible. Now I won't say all mutual funds are bad, the ones Schneed and Matty mention sound like solid investments with LOW FEES. So do your research, make sure you're diversified, and most importantly make sure the fees are low. Anything over 1% in fees is getting expensive.

- I prefer ETFs because they are cheap, can be bought and sold at any time just like a regular stock, and give you broad diversification in one investment. Now not all ETFs are created equal and a lot of the recent ones to come on the market are terrible for individual investors. For starters anything that is "levered" (ie double bull, double bear, etc.) are bad news for individuals. Unless you are a trader you will get killed over the long run. The key is to stick with the "standard" ETFs that have been around for a while.

If I was building a portfolio for a new US investor it would look like this:

- 40% SPY (S&P 500)
- 20% EFA (England, Europe, Japan... basically all developed markets outside of north america)
- 20% EEM and/or EEB (emerging markets and BRIC countries)
- 20% XIU.TO (Top 60 companies on the canadian market)

With the above portfolio you will have diversification across hundreds of companies all over the world, and you won't have to lose sleep if one company goes bankrupt or misses their earnings or cuts their dividend, etc.

As you get more comfortable you can start reweighting your portfolio to get more exposure to particular countries and/or particular industries.

I won't bother giving my macro views on the world cuz they are just my opinions and that's the whole point. Don't listen to anyone's opinions, just try to match the market and keep your fees as low as possible. That will serve you a million times better than taking stock tips from the dorks on CNBC.

GOOD LUCK!!

Re: Need Help Investing
 

[quote=Daseal;673066]Schneed. Few questions here myself. First of all, I'm relatively young (26) so I have my 401K (taking advantage of the max amount of matching) on the most aggressive setting it can go on, last quarter it did pretty well. Considering I haven't worked much, it wasn't a lot of money, but that will change in time. [B]How long would you leave it on aggressive? I was thinking the first 10 years, then pulling it down to moderate.[/B]

I know you push stock, but watching my grandmother deal with stock has really turned me off. Cost basis BS, the fact that turning it in can skyrocket your income bracket that year, etc. It's been such a hassle I kind of want to avoid it. If it ends up being the most effective investment vehicle, then so be it -- but it seems like a huge hassle.

Where do you stand on IRAs? I was under the impression that the return from IRAs were quite good and that should be the 2nd thing, after your 401K, that you focus on as a young person saving for the future.

Thanks![/quote]

Follow the "[URL="http://www.nodebtplan.net/2008/08/12/the-120-minus-your-age-stock-allocation-formula/"]120 Minus Your Age[/URL]" rule and you'll be alright. As for aggressiveness you need to make sure you allocated your purchase of aggressive funds in similar fashion.

Re: Need Help Investing
 

Care to get the ball rolling?

[url]http://www.thewarpath.net/parking-lot/34481-make-our-dreams-come-true.html[/url]

Re: Need Help Investing
 

[quote=Mattyk;673064]According to my year ending statement for 2009 my annualized rate of return was 26.5%

My funds are:

Janus Twenty 60%
Vanguard Total Bond Market Index Fund 20%
Vanguard Wellington Fund 20%[/quote]

So your saying that your funds increased 26.5% from 2008 or they earned an average of 26.5? If your getting a return of 26.5 then your in the wrong business and you make Madoff look like a amateur.

Re: Need Help Investing
 

Great advice from Schneed , just remember he charges $ 100 for advice :) . The only thing I would add < my 2 cents > , would be to open an self-directed < brokerage > IRA [url=http://www.investopedia.com/articles/retirement/08/self-directed-real-estate-IRAs.asp]House Your Retirement With Self-Directed Real Estate IRAs[/url] .[url=http://www.bankrate.com/finance/retirement/self-directed-ira-a-good-bet-1.aspx]Self-directed IRA offers investment alternatives[/url] You can buy individual stocks as well as Mutual Funds & ETF's . I doubt I will ever buy a M. Fund again , just seems too easy to beat them .... Individual stocks < many of them > pay much higher dividends then M. Funds and you have no fees and expense ratio's .... in an IRA , you also pay ZERO in taxes :) . Good luck and be ... pro-active .

Re: Need Help Investing
 

[quote=firstdown;673147]So your saying that your funds increased 26.5% from 2008 or they earned an average of 26.5? If your getting a return of 26.5 then your in the wrong business and you make Madoff look like a amateur.[/quote] The market is up 75 % since 3-10-2009 .... or something close to it .... we need Shanny to increase our win totals by 200% this year :)

Re: Need Help Investing
 

Toilet paper and booze man, toilet paper and booze.

Re: Need Help Investing
 

[quote=Trample the Elderly;673236]Toilet paper and booze man, toilet paper and booze.[/quote]
Don't forget the smokes .... just own the Company , stay away from the nicotine.