Stock investments

[Skitz]

Hello All,

I am wondering if anyone here is invested in the stock market. I am looking to start my portfolio in the next coming month, with an initial investment of 5grand. Looking for 3-5 long term stock, and even some for day trading I wouldn't mind too much, but really, anything to help build a solid portfolio. I will try to continue investing up to a total of 20k, I think.

Any advice on where to start reading and researching, how to initially pick a stock, or actual stock advice would be greatly appreciated. :)

I already have a 401k from my company, in which I am putting in 5%, they're matching up to 3%.

[The Black Knight]

My advice would be, stay with and invest in Mutual Funds. Growth, Growth & Income, Equity are some of the ones I go for in my 457 and Roth IRA. You can also have a company do it for you and pick from a list of combined mutual funds they offer. You can choose to put all your money in one spot. Or spread it out in more areas for great long term growth advantages. Since you're wanting something quick(3-5 year range). Go with all Equity type mutual funds. You're wanting the most out of your money in the shortest amount of time. Warning though, the more aggressive type funds have the most volatility. You can win big, or lose much.

I'm no expert either. So take this advice with a grain of salt and do your own investigating when looking for options. These are just some of the areas I've used in my accounts that I have. For the most part they have been very stable and grown decent.

[powers]

Sign up and start asking questions.
https://www.bogleheads.org/forum/index.php
https://www.bogleheads.org/wiki/Main_Page
http://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement

You will hear a lot about 3-4 fund portfolios.

How old are you?
Can you do a Roth? - http://www.rothira.com/roth-ira-rules
Do you have access to a 401k, 403b, or 457 at work?
Are you already using all of your available tax advantage funds?

The only stocks I buy are ETFs of index funds. I use TD Ameritrade and only buy their commission free ETFs.

With $5000 I would start a new Roth at Vanguard BEFORE April 15th. Your age/risk tolerance will drive which fund(s) you pick. You can use the online tools or just call them.

Vanguard Total Stock Market (VTSMX) gives you 3798 stocks in one fund.

[Skitz]

Sign up and start asking questions.
https://www.bogleheads.org/forum/index.php
https://www.bogleheads.org/wiki/Main_Page
http://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement

You will hear a lot about 3-4 fund portfolios.

How old are you?
Can you do a Roth? - http://www.rothira.com/roth-ira-rules
Do you have access to a 401k, 403b, or 457 at work?
Are you already using all of your available tax advantage funds?

The only stocks I buy are ETFs of index funds. I use TD Ameritrade and only buy their commission free ETFs.

With $5000 I would start a new Roth at Vanguard BEFORE April 15th. Your age/risk tolerance will drive which fund(s) you pick. You can use the online tools or just call them.

Vanguard Total Stock Market (VTSMX) gives you 3798 stocks in one fund.


I'm 27, making 75k a year not including overtime or bonuses. I already have a 401k from my company, in which I am putting in 5%, they're matching up to 3%.

[powers]

You can do a Roth - do you have one already? Can you max out your 401k? I am making some assumptions on taxes, but $1500/month into the 401k would cost ~$1050/month. 27 is a great age to put as much as possible into a 401k - http://www.bankrate.com/calculators/retirement/401-k-retirement-calculator.aspx

Anything after the 401k and Roth would be a good option for taxable accounts - day trading, ETFs, individual stocks, etc.

[The Black Knight]

I'm 27, making 75k a year not including overtime or bonuses. I already have a 401k from my company, in which I am putting in 5%, they're matching up to 3%.

Dude you can always open more 401K's. Last time I was really into what was what on 401k's, you could max them out at $15k a year. That's $15k for each individual 401k. Also Roth IRA's are after tax plans. Meaning, you'll only pay taxes on your earnings and not your contributions in the future. Roth IRA's I believe can be maxed around $100k a year(don't quote me on that though).

Whatever you do, invest so your money has the best possible chance of growth, yet also has the best possible way of staying safe. So that would mean a compromise in what's out there.

Stocks are real hairy, unless you want to what that stuff like a hawk all the time. Also, Gold and Silver are hilarious, I wouldn't invest in those either. Sure you can make bank but look at Gold, it's tanking right now.

[Matt]

A fee only financial planner would be a good investment. These are the people who you pay for advice, they make no commissions. You then go out and invest based on their advice. This would be the way to go after maxing out your 401k.

I started investing at about that same age as you (28 years ago). If possible I would go back in time and make 2 changes: start a ROTH IRA before making too much money to participate, max out my 401k contributions starting with my very first paycheck.

I know a couple of people who made attempts at day trading, they didn't fair well. Buying quality investments and sticking with them for decades is a much better approach.

[Vitesse]

You can only contribute to one active 401k plan at a time. You can technically have more than one 401k, but only in the situation where you leave your job and start a 401k at your new job while keeping your old one. You cannot continue contributing to the old one, so the best idea is to roll your old 401k into either your new one or an IRA.

You can have multiple IRA's and contribute to all of them, however your total contributions must stay below the annual limit of $5500. Your contribution limit for your 401k is $18,000.

A few thoughts about using these retirement plans...401k's are great investment options provided you get a company match (which I see that you do). However, most 401k plans only offer a handful of mutual funds to choose from and they charge higher management fees.

Opening an IRA (traditional or ROTH) is another great option. Most IRA's give you many more options or open trading access for your funds. I generally recommend investing in an index fund that mirrors the S&P 500. This will give you diversity in the market, performance matching the S&P 500 index, and lower fees than a 401k.

My recommendation is to contribute to your 401k to the point that you receive the full company match, max out IRA contributions for the year, then go back and contribute to your 401k if possible to continue to take advantage of the tax-free investing. You can always take a small percentage of your IRA funds and put them into individual stocks if you want to try to beat the averages, and you won't have to open a separate trading account to do so. The only real downside to this strategy is you can't withdraw your profits from this stock trading as you are using retirement funds.

[FZRguy]

I agree with most of the above. The real advantage of a Roth IRA (esp. at your age) is the growth of your portfolio is never taxed. The most important advice I can give you is to save. It almost doesn't matter what you invest in (I also like index mutual funds), save money from every paycheck. Make it a life-long habit and you will have a prosperous retirement. Save money outside of retirement accounts as well. You should have a six month emergency fund in case of job loss. Avoid debt like the plague, esp. credit card debt. Don't go into debt for toys that depreciate (like expensive cars and motorcycles). If you have student loans, work hard to get them paid off as quickly as possible. If you buy a home, do a 15 year mortgage and build equity sooner rather than later.

[Ph03niX]

Ohh man about 60% of this flew right over my head haha. I need to learn about all this. I'm 21 and getting a jump on investing (I'm fairly certain) is a good idea.

[FZRguy]

Earning power and time is your greatest asset. Don't waste either.

[madvlad]

Ohh man about 60% of this flew right over my head haha. I need to learn about all this. I'm 21 and getting a jump on investing (I'm fairly certain) is a good idea.

I regret not having joined at my previous job for 401k after being there for 5 years and their contribution was pretty good as well man, would've had a serious amount of change towards retirement right now (I'm 27). Set yourself economically straight early on man, just the way to go.

[powers]

Ohh man about 60% of this flew right over my head haha. I need to learn about all this. I'm 21 and getting a jump on investing (I'm fairly certain) is a good idea.

21? Pfft... you are in great shape even if you don't have a penny saved. Start now with a target date or 100% equity(total stock market/S&P 500), learn, and adjust from there.

$1000+ in Vanguard ROTH IRA with the STAR fund or target date for when you want to retire. If you can contribute of course.

[powers]

If possible I would go back in time and make 2 changes: start a ROTH IRA before making too much money to participate, max out my 401k contributions starting with my very first paycheck.
.

YES! Put in as much as you can into your 401k regardless of match... unless they have insane ERs on the funds >1.0%.

[Skitz]

I am strictly talking about stock investments, though you did make me realize I am not doing enough with my 401K and Roth.

[Ph03niX]

My dad keeps mentioning how I should put money into a Roth because you have a good chance of slowly making money or something like that.. Does anyone know of maybe a class where they teach you all about the stock market/investing/401ks and what ever else is worth mentioning?

[FZRguy]

I believe Schwab does classes at local branches. Check out their site for locations and info.

[Ph03niX]

Cool man thanks! I'll check it out.