Starting Out

Discussion in 'Trading' started by donnie, Aug 5, 2002.

  1. donnie


    Hi, I just got here, I'm new to this world. I am interested -- my mother recently passed away and it's been a very sad time. I would like to invest a small amount of money she has left to me (after the gov't. takes most). Just wondering your thoughts on general investments these days. Aggressive is good as I am 40 yrs. old w/ two small kid... Thanks in advance. :)
  2. BSAM


    If you are "new to this world" and you are interested in "investing", I'd suggest staying on the sidelines for now. Bad, bad market right now for investing IMO. What do you suppose would happen to your funds if George decided to drop something big on top of Iraq say next month? Try to start learning right now. Watch the markets a while. Save yourself lots of agony.

  3. I think you should wait until the next down leg is over. What happens when consumers really cut their personal spending, and banks pull in lending.

    Price earnings ratios are still high by historical standards, and the projected growth rates are falling. And the charts look bad. This is not the time to buy! The only ones telling you to buy now, are the ones that have been wrong all along.

    Discretion is the better part of valor.
  4. Usually when things are bleak.....if your time frame is 20 plus years is the best time to invest.

    Investing during 99 would have killed you. Now for Long Term investing is much better.

    I would recommend opening up the phone book and calling a financial planner. They can show you the proper way to invest for retirement by being well diversified and the many options available. There are lots of tax plan strategies and other vehicles that will fit you. With what has happened you need to be able to see the entire picture of what is to come and be well planned.

    trading and Long term investing are 2 different things.

  5. Invest in your mattress. (just imho)

    I was a "financial planner." It is often a glorified term for an insurance salesman. At a minimum, look for the CFP designation. Unless you have a very large sum of loot, you will work with a commissioned salesperson instead of a fee-based planner. If it was me, I would meet with a CFP and get them to make a proposal, and then if I liked it, go and buy all of the same products yourself - no load funds and whatnot. There is no reason to take a 5% haircut right off the top to make money for someone else.

    The planner will probably try to sell you life insurance. If your family depends on your income, you need it. Do not buy life insurance from "a name you know" and think it's better because it's Prudential or Met Life. If the agent can only sell life insurance from one company (most of the big names are like this), then you don't want it. Talk to a couple of independent (very important) agents who can sell the products of many companies. The "buy term and invest the difference" saying is true, but most people are not disciplined enough to do it.

    If you buy an annuity, look at the surrender charge. This is how the agent gets paid. Anything past 5 years is too long. 10-15 years is just robbery. There are some decent index annuity products, which give you a return tied to the market, BUT guarantee your principal. Also, I'm not sure if they are still around, but "two-tiered" annuities are a total scam. They advertise a very high rate, but if you ever want to take your money out, you only get a very small rate of return. It's like a surrender charge that never goes away; it just gets bigger over time. The only way to get the high rate and take the money out is to annuitize with the same company, and then they whack you on the annuitization.
  6. rs7


    If the govt. is taking "most" of the money, then it should not be a "small amount".
    Good luck my friend. And take the advice you got here about a financial planner.
  7. I have 3 words for you :


    and/or, 2 words for you:


    that is where you will get a positive return without locking up your funds. It is not even safe to buy bonds at the moment, because the value of existing bonds is likely to drop.
  8. William


    I second this