How should I invest $10k?

Discussion in 'Professional Trading' started by ir0n_ma1den, Aug 19, 2008.

  1. Hi everyone,

    I am 18 and will be a senior in highschool next year and my dad is giving me $10k to invest. Now I would probably be keeping this money into the investment for atleast 5 years probably more.

    Now I heard that right now an index fund (read: Vanguard) is the best way to go, but i really don't know. What would you invest in with $10k?
  2. how long term are you?
    if you are super long term and you think the financials won't be blown into the water, buy UYG. double exposure, 5 years from now will be massive.
  3. GE is a safe bet, put a limit order for 28.5 or less. reinvest dividends your brokers drip option.

    It will fluctuate up/down but the dividends will grow your nest egg during this flat rangebound market.

    Avoid the tech stocks or pureplay financials. Cheap does not equal good value.

    oh and request 1 certificate. It is a nice certificate and looks good framed. Remember when you buy a stock you become a fractional owner of the company and you are entitled to vote, read the proxy materials and put your vote in. Think of the dividend as your paycheck, and you get a raise once a year as well :)
  4. #1 - dont blow it "trading", like most people here do. Few people will ever making a living from trading. 95-98% of them will lose all their money trying.

    #2 - if you grasped the power of putting the money into an IRA, and letting whatever you wisely invest in grow tax free until you are 65, you would have a very nice retirement from this!!

    And it isn't until you are 40, like many people, that you will wish you had done this, but it is too late to get the growth needed.

    #3 - don't put it into one stock, like the above people suggest. Most smart investors realize how important it is to spread the money out among at last a few solid companies. One or two companies can blow up, as we have seen during this recent housing/ subprime crisis.

    #4 - put some of the money into international fund. If the US economy or US dollar craters, you will be somewhat protected and diversified. Vanguard and others have international funds that make it very easy. Don't put all your money into your country investments only.

    #5 - consider putting 5-10% of the money into XAU - it is an ETF like a stock that reflects gold/gold mining. Most smart investors put a SMALL amount into gold, because when chaos hits, gold often soars, and protects your other holdings somewhat.
  5. dsq


    I would wait for the housing market to bottom out before investing.I think the market will not be going up until then.There is quite a bit of downside potential.People like cramer said financials and the market bottomed out on july 15Gignt he say also a new bull market was at hand?.A month later many banks are making new lows or close to low's.Catching falling knives is a dangerous biz.
  6. i agree with all of the above comments, i remember when i first started investing it was and still is very difficult to be diversified with 10,000. Split it up for sure but look for good long term bargins, you'll chop your account to pieces trying to trade it. Hence the long term hold on uyg, gld / slv are good gold/silver bets to.
  7. Buy and hold an ETF like SPY (S&P 500), DIA (Dow Jones); or even SSO (2x S&P), or DDM (2x Dow)

    And yes, don't blow it up trading. Invest long term.
  8. bkveen3


    What are your objectives? Do you have any intention of trading for a living later in life or are you just being smart and investing a little while your young? If your intention is "ultra" long term I really like financials at these levels. If you want to be a little ballsy then look at some balance sheets and pick someone that has been taken down because of its sector not because of its personal performance. These will look awful pretty in 5-10 years. IMO. If you want to be a little more cautious look at some financial sector ETF's. IMO stay away from comods for the time being. Good luck. Its smart to start young. I'm only 20 so I know how you feel.
  9. Listen to this. First do not invest your money in a company that you "Think" will go up because they have good fundamentals. The only people that actually succeed doing this is when the economy is solid and the overall stock market is in an up trend. Right now even the best companies are in a yearly downtrend so even if you are a very talented fundamental investor you still have a very strong chance of losing money unless the entire economy turns around the day you buy your stocks which is of course very unrealistic. In this current condition it is very unlikely the entire economy will turn around in 3 months.

    Second, learn how to make judgements about stock charts. Go to and first look at the major indexes and then some stocks your interested in. Say to yourself, have these stocks been going up or down the last 6 months, 3 months or month. Notice that after a stock has gone up for around a month or two it continues to go up. Also notice that major blue chip stocks charts are very similiar to the dow and S&P. Read How to trade stocks by Jesse Livermore if your actually serious. This is called basic technical analysis. Let me tell you something that makes perfect sense. If a stock has been going up for the last 3-6 months what are the chances and probability that it will keep going up the day and month you buy it. The chances are very good. Once you have evidence that the uptrend has stopped with lower lows and lower highs you sell. This not only takes emotion out of it but also the execution is simple. Do not think i am talking about day trading. I am talking about buying a stock that is in an uptrend and selling it when the uptrend ends. The time you could hold a stock while it is going up could be between a month to even years.

    Now theres a problem to this. You might have to check the stocks and charts once a week instead of once a month. If you can do that and start to understand what i am talking about then you will be beating mutual fund numbers with ease.

    I simply just told you the basics of technical analysis and gave you a picture of the reality behind looking at charts and the way i started making real money. Be careful because if you start to look any deeper then this and truly find the opportunities that the stock market has you will be hooked.
  10. Dad gave you the money so that you can learn. Here is a lesson that Dad most likely does not know himself, as otherwise he would have just shown it to you.

    There is a way to invest in the stock market where you guaranteed not to lose even a penny, and yet your upside is not capped. You still have to work to gain the upside, but your down side does not exist.

    Now I am not going to tell you how to do it in this thread, as it is valuable information

    But telling you of its existence is already a big valuable information.

    Once you speak to Dad about this, he may say it is a scam, or he may be a sharp guy and go the work to get the nugget.

    Do not read this, and say it does not exist. If you do, you are wrong, because if what I write is not correct, I ready to bet any amount of money you can bet on the existence of it.
    #10     Aug 20, 2008