young investor

young investor questions and answers

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Q: What kind of apartment complex should a young investor buy?
I am 14 but by young investor I mean 20. Should I start out with duplexes the triplexes then keep moving to bigger complexes. Right now Im working on building up my savings and my investment money=]

A: Well, buy what you can afford. You are going to need 30% of the price for the complex in cash.

Q: I am a young investor (18), and looking to put $900 in initially in stocks...Any advice?
I have done months of research. I have read at least 15 contemporary investing books, talked to investors, and even used an investing simulator to pick a stock and track it. I have found 3 very solid stocks and am looking to invest at least 75 weekly. Any advice before hit the ground running?

A: $900 split 3 ways is $300 each. COmmissions will amount to 3-4% of your investment. Not great, not horrible if you think you will own them for several years. But I believe you are a better investment than any company. Buy some books and read them. Take a class (or several). Travel somewhere outside the country. Go find a local charity and donate a lot of time and a little money. ALl of these investments will pay back 100-fold. Some books to get you started. The Richest Man in Babylon The Millionaire Next Door Atlas Shrugged The Challenge to Succeed (CD set by Jim Rohn) The Power of Positive Thinking How to WIn Friends and Influence People Forbes Magazine The Economist Outstanding Investor DIgest ($$$$ - get a free sample first). And if you really want to invest in some stocks, ask yourself this... What do you know about these companies that most people do NOT know? Do you work there? Do you buy stuff from them or sell stuff to them? If you do not have some kind of advantage over the rest of the market investors, maybe they are not the right companies. BUy local companies so you can go on the plant tours, visit the CEO, attend the annual meetings.

Q: Where should a young investor start?
I'm 22 and I don't have much money, but I'd really like to start investing so that I'll have some money in the future. What's a good point for a guy like me to start out at? I've heard mutual funds are probably the best for someone at my level, but I'm curious as to whether or not there are other options available and how they stack up against each other.

A: How you invest really depends on what your goal is - retirement or a future down payment for a house. I think it is never to early to plan for retirement. If you company doesn't offer a 401K, I would most definitely get into a Roth IRA. The great thing about a Roth is that your money grows tax-free, meaning that when you take money out of it for retirement, you will not pay taxes on it (even on the interest you have accrued in the account). You contribute money to your Roth after you've paid taxes on the money. This is a nice advantage since we all know taxes will be more expensive in the future. I highly recommend Scottrade Trade for your IRA. I just moved my Roth from Ameriprise since the fees were so high. Scottrade doesn't have any opening, closing, annual or custodial fees for the account and you don't need money to open an account. Plus, they don't charge fees for purchasing mutual funds or bonds which is sooo nice (many mutual funds require a minimum investing amount any where from $500 to $2,000 though). I personally would stay away from buying stocks with retirement money. If your company does do a 401K, I would still look a Roth to supplement your 401K. I have both a 401K & a Roth (added a Roth as I made more money with my job). If you are looking for some extra money on the side for money to play with later I would invest in stocks since you are young and can be a bit risker and stock can yield a big return. However, before I would recommend this, you need to become very educated about researching stocks and buying them. I would recommend several of the Jim Cramer books. Not because I think he is a genius, but because he really pounds hard at researching your stocks and contining to do your "homework" on them. Stocks can change quickly so you have to be on top of them. If you are looking to get into a Roth, I would reccommend purchasing some mutual funds in the next couple of weeks. The market is in a correction right now and very excellent mutual funds will be cheap.

Q: portfolio of a regular investment account for a young investor?
I already max my 401k and Roth IRA. I would like to open a regular investment account. I am in my twenties and tolerable to risk. How should I allocate my portfolio based on mutual funds (preferably index funds)? Note: I don't have the the knowledge or time to trade individual stocks.

A: If this money is not to be used for at least 10 years, and you want index funds (not what responders above suggested) and you don't have the time/knowledge to keep checking on the market, the best thing is to be well diversified with bonds, domestic stock funds and foreign stock funds. A Vanguard Target Retirement Fund fits this description. They are made up of other Vanguard Index funds. Pick one with a date closest to when you think you will need the money.

Q: What is a good stock mutual fund for a young investor?
I only have about 2000 dollars to invest.

A: this is a great article that talks about "lazy portfolios". http://www.marketwatch.com/news/story/quarterly-update-lazy-portfolios-still/story.aspx?guid=%7B33325373%2DCDCA%2D4A95%2D9937%2D301D1E3E7E8D%7D the problem you may encounter is that many low fee mutual funds require $3000 minimums . Good luck

Q: As a young investor, what should my portfolio look like?
Consider that I am willing to take a few risks, looking for long term growth, and have a substantial amount to invest how should I structure my portfolio. I know there are many more factors involved but would like some sugestions. Thanks.

A: Concentrate on your retirement accounts

Q: What are some good tips for a young investor.?


A: If you have a mentor such as a parent, relative, guardian, parent of a friend or teacher who trades or has investment properties, ask him/her to show you what he/she does and how he/she does it. If not, here are a few things to do: 1] Yahoo! has and recommends these free sites: http://yahoofinance.com AND http://investopedia.com This is one of Yahoo!'s "Knowledge Contributors". This is a terrific site to learn about trading. If you're interested in real estate as an investment, ask the person who got you interested in real estate, to show you how he/she does what he/she does. There are LOTS AND LOTS of things to learn about trading and real estate. It would take much too much room for me to write those thoughts in this forum. I could do it, but this forum is much too restricted as far as space is concerned. Thanks for asking your Q! I enjoyed answering it! VTY, Ron Berue Yes, that is my real last name!

Q: I'm a young 401K investor, What do I do and what should I expect?
I'm in my 20's and I'm investing in 401K, I would like to retire between the ages of 55 & 65. I currently make around 42k and I'm investing 6% as of now because it's the maximum my company will match. I'm not really a follower of the stocks and bonds but I do know to invest aggresively while I'm young. Just wondering how long should I invest aggresive and what are the basic do's and don't that I need to know (what should I watch out for). Also what is a good figure that I can expect to be my annual rate of return throughout my life when calculating on a 401K calculator? Thanks Ben

A: Look at the current returns that each of the available funds are producing, then check back periodically for changes. Put your money in the 3 that make the most money right now. That simple strategy will give you safety and maximize your long-term results. When one starts to stink and another shines, then (if permitted, check on how often you can make the changes and then every 3-6 months check again to see if you can or should change your allocation) stop contributing to the poor one and go with another with higher returns that you aren't already in. Some folks do this kind of thing with Certificates of Deposit. They build a "ladder" with some in a near-term CD (1-3 months), mid-term (6-9 months), and long-term (1-2 years). Then when one matures, they see where the best rates are and roll it over to that length of time, but if there is more than a third of their money on that rung of the ladder, then they put some at the best place for the rung that is less populated. It is a strategy of balance, but still emphasizing the best of what is available. Patience, you'll do fine.

Q: Hi, I am a new young investor 23 years old, bought 20 houses cash. How can i get cash out of all of them?
All properties are located in Buffalo NY

A: Do a cash out refi. BTW - If you are 23 & own 20 houses outright - then that advice isn't free. Send money via paypal to my username ;)

Q: Now that bond prices have went up what should a young income investor do?
Got an inheritance and want to invest it for fixed income so I can have a few extra grand a year to help pay for living expenses because I am still in college and going to grad school. Now that bond prices just went up, what should I do?

A: Vanguards Intermediate Bond Fund or their Total Bond Fund... when you get out of college I'd say 80% S&P 500 Fund so you can start getting ahead for the rest of your life.

Q: What is the best way for a young investor to invest $1000 besides CD's.?
I can save about $2000 each year and want to avoid low yield investments like CD's and savings accounts.

A: Firstly that swiss bank account method sounds like a scam. Mutual funds are okay, but they charge a high commision like 3 or 5% to start. The highest risk would be investing in individual stocks because they can fluctuate enormously. The second riskiest option is the mutual fund, which can generate great returns but it's hard to predict a funds performance. The third riskiest option, and my suggestion would to invest in index funds, especially the Vangard index funds or the S&P 500, which are designed to mimic the performance of the entire stock market, which has historically been several times the growth rate of a CD. The Vangard fund fees are extremely low. When you invest in a large collection of stock like an index fund, you lower your risk, because when 1 stock falls of the map, you still have 499 other stocks in your portfolio. Of course the ultimate decision on how much risk you want is up to you.

Q: Young listed firm has lower investor confidence in short term but higher investor confidence in longer term?
Most of the investors may not prefer investing in young listed stock as it is high risk. For example, on the merger announcement day, investors may not invest in this stock as they think that these stock do not have lots of investment potential (they may prefer investing in stable blue chips). However, later on, investors seem to realise the development potential for this young firm as young firms have higher development potential in the longer run. Therefore, investors like investing in young stocks a few days after the annoucnemet day. What do you think?

A: You are right. Most common investors do not like to invest in new (young) listed stocks because these are considered riskier. Actually, not all such stocks are relatively risky: it is just because not enough information from credible sources get circulated among the public. Thus in most cases these stocks get ignored because of low awareness and scanty publicly available credible assessment of their strengths, weaknesses, opportunities and strengths. Besides, since not all young listed stocks ultimately succceed - rather a few of them succeed, such stocks as a class carry a high risk weightage. However, not all investors have the same view about young listed stocks. There are smart individual investors and managers of institutional investors like mutual funds do invest in such stocks. They make lot of effort in gathering information about many such stocks,do detailed research and analysis and then find those among them which have high potential. Then they invest in such stocks because they are available cheap as most investors have not yet found out their potential. So, these investors really make lot of gains on their investments in such companies specially when the common investors come to know of the potential of these stocks and start investing in them. This is but the natural market phenomenon. If everybody knew at the same time which young listed stocks will do well in the stock market and when, every investor would get interested in them at the same time and the stock will not be available at low prices for long periods - thus reducing the extent of potential gain the stock market price. This is normal market, Those who are smart are always very quick in getting to know about the announcements and analyse their strengths and prompty start investing in the identified stocks. Then other investors come to know about these first investors and join them in investing in these stocks. By that time the prices of the stocks have already risen sharply and the subsequent gains may be lower. There are other investors who do not like to touch young listed companies: they are very conservative, long-term investors and are satisfied investing in established blue chips that will never fail even if they offer lower but steady return.

Q: As a young student investor first investing, what are some good very small (below $1000) investments?
I understand that T-Bills are great to buy, though possibly not in this economy. What are some great small time investments to do with less than $1000, possibly just $200 or so? I know that is a very small start, but I was wanting to start investing at a small slow rate.

A: Why not trying Automatic Forex Trading? I started with only $450 and gain $45 in 8 days with nothing to do. 25% average gain per month with 2%-17% risk. Everything is automatic so robot will take cares the trading 24 hours a day 365 day per year. You can even raise the risk with potential of raising the profit.

Q: If I am a young investor hoping to save $ for college and beyond, what is the best type of investment for me?


A: Clark Howard (who has a daily radio show about how to save money and spend less) would say to get Student Loans because the money you save now and invest elsewhere will benefit you more long-term than if you spend it all on the cost of College. My first suggestion would be for you to start a ROTH IRA account and get your retirement started way early. The most you can put in is 4000.00/Year and I think it may go up to $5000.00/Year. It's after tax, which means tax free when you take it out at retirement(Much better than Traditional IRA) and what YOU put in(not interest earned) I believe can be taken out at any time without penalty since it's put in tax free. Below is a great site to browse.

Q: managed funds vs direct trading, which one would you suggest and why? i am a young investor with small capital?
however, i am working, thus i can contribute more to the initial capital, and have a higher risk tolerance. i am looking for a long term (7 years) investment. thanks

A: I would say direct investment, although you need a lot of money to disersify your portfolio. How about ETFs. These are passive funds and low management fees. A good managed fund is probably good, but it is finding a good one.