Styleforum › Forums › General › General Chat › Investment Advice
New Posts  All Forums:Forum Nav:

Investment Advice

post #1 of 59
5/8/08 at 12:16pm
Thread Starter 
So I'm receiving my stimulus check soon, plus my state/fed refunds and a bit of money from relatives in Brazil. As a complete finance n00b, I'm in the dark as to the best way to invest this money. My initial thought was just buy Euros or Pounds, since the dollar keeps dropping, but a friend told me that amateurs investing in exchange markets get burnt a lot. Plus I wouldn't know exactly where to start to buy currency, I've only ever done it at the bank.

So what's your advice? How can I do better than just plopping it in an ING Orange Savings account? That's my current plan at ~3.8% interest.
Reply
Reply
post #2 of 59
5/8/08 at 12:19pm
that's probably not a bad idea at this point. Of course, I am no expert in investing or anything, but a 3.8% return is good for no risk involved. You can try a mutual fund, but I suggest you read up on how it all exactly works before you invest in them. Good luck!
Reply
Reply
post #3 of 59
5/8/08 at 12:56pm
Buying currency is tricky business, and with only $600 to throw in the pot, a bad idea (your friend is right). Mutual funds might work, though I don't know if $600 is enough for a minimum balance at most places; you might have to agree to $600 down with additional monthly deposits or something similar. The ING plan is a good one.
Reply
Reply
post #4 of 59
5/8/08 at 1:09pm
Buying Euros at a bank is probably not the best idea, for several reasons. First the buy/sell exchange rate at a bank means your transaction costs are REALLY high. You've probably got to get a 10% or better return just to cover the costs. Second, what will you do with the Euros once you have them? Put them in a drawer earning nothing? If you could deposit them in a foreign bank and earn interest...but if they're staying in the US...not so good.

Also $600 or whatever is not enough to start trading currencies, plus your friend is right...too risky for someone who doesn't know what they're doing...and for lots of people who think they do.

I'd say that a foreign stock fund is a good bet. Find one that invests in foreign stocks and you'll get appreciation from the foreign markets (which have outperformed US markets over the past several years) and something of a currency hedge since many of these stocks trade in foreign currencies.

You might need a minimum of $500 or $1000 for most of these accounts.
Reply
Reply
post #5 of 59
5/8/08 at 1:13pm
minimum for any mutual fund is $1000.

Do you work or are you a full time student. I would suggest your 401K if you work or IRA.
Reply
Reply
post #6 of 59
5/8/08 at 1:15pm
Depends?

How many years until you need this money?

Short term (under 5 years) - leave it in the ING account
Longer term - throw it in a vangaurd ETF and forget it
Retirement - throw it in a roth ira
Reply
Reply
post #7 of 59
5/8/08 at 3:16pm
Quote:
Originally Posted by constant struggle View Post
Depends?

How many years until you need this money?

Short term (under 5 years) - leave it in the ING account
Longer term - throw it in a vangaurd ETF and forget it
Retirement - throw it in a roth ira

+1, this is sound advice. Problem is the money isn't enough to start a Vanguard fund ($1000 min, mostly), so if you're going for option 2 or 3, keep it in ING/HSBC until you get the minimum.
Reply
Reply
post #8 of 59
5/8/08 at 3:18pm
Quote:
Originally Posted by breakz View Post
+1, this is sound advice. Problem is the money isn't enough to start a Vanguard fund ($1000 min, mostly), so if you're going for option 2 or 3, keep it in ING/HSBC until you get the minimum.

well he can buy the ETF which is just like the mutual fund but trades like a stock
Reply
Reply
post #9 of 59
5/8/08 at 3:23pm
Now are you only interested in using the $600 or the remaining refund you are getting? if so, all above options are good, while the other option is to open up an etrade account and use bits and pieces of your $600 to invest in a couple or one good solid stock. It could help you get your feet wet, and considering you said you were null and void about finance knowledge trying anything might be a good option at this point.
Reply
Reply
post #10 of 59
5/8/08 at 3:27pm
Augusto, just send me a cashier's check for whatever you want to invest, and I will take care of it for you.
Reply
Reply
post #11 of 59
5/8/08 at 3:36pm
Quote:
Originally Posted by teddieriley View Post
Augusto, just send me a cashier's check for whatever you want to invest, and I will take care of it for you.

I think you're joking but that could be a possibility no?

If augusto doesn't meet the minimum ($3k for the popular Vanguard S&P 500 for example) but he knows someone trustworthy who has an account...

I'd probably just go with an online bank though. Or stimulate the strip club economy
Reply
Reply
post #12 of 59
5/8/08 at 3:39pm
Quote:
Originally Posted by HomerJ View Post
I think you're joking but that could be a possibility no?

If augusto doesn't meet the minimum ($3k for the popular Vanguard S&P 500 for example) but he knows someone trustworthy who has an account...

I'd probably just go with an online bank though. Or stimulate the strip club economy

Depends on what you mean by joking. I would certainly welcome a check from Augusto because apprently Uncle Sam doesn't think I'm entitled to one. What happens to that check after I receive it is another matter. Like I said, "I'll take care of it."
Reply
Reply
post #13 of 59
5/8/08 at 3:45pm
Quote:
Originally Posted by Train View Post
Now are you only interested in using the $600 or the remaining refund you are getting? if so, all above options are good, while the other option is to open up an etrade account and use bits and pieces of your $600 to invest in a couple or one good solid stock. It could help you get your feet wet, and considering you said you were null and void about finance knowledge trying anything might be a good option at this point.

$600 is way too little to even think about doing stocks. Assuming a $10/trade commission rate, he'd have to generate 3-4% returns just to cover transaction costs and break even. Second, it's not enough to stake any sort of real position in any established stock (what's the point of holding 10-11 shares of a $50 stock, for example?), and this often causes novice investors to chase risky penny stocks because positions in them are more affordable. Finally, investing with $600 offers no room for diversification or hedging, so if he puts all his money in what turns out to be another Ambac or Bear Stearns or Crox or whatever, he's just flushing it down the toilet.

$6000 isn't enough to trade stocks with; trying it with $600 is just ridiculous. I agree with others in that he should just park it away in a high interest bank account and wait to accumulate enough money to a point where he can pursue investment strategies without being severely undercapitalized.
Reply
Reply
post #14 of 59
5/8/08 at 4:03pm
Thread Starter 
Thanks for the advice, guys. I'll probably park it in ING until I figure out my job situation - I'm holding down two at the moment but possibly transitioning to a 9-5, so it'd probably be good to have that money on demand.
Reply
Reply
post #15 of 59
5/8/08 at 5:56pm
I would suggest putting it in an ETF. In fact, you might want to find an ETF that involves higher risk, but higher return potential, since you are so young that it's not going to kill your retirement if that $600 fluctuates a lot.
Reply
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Chat
Styleforum › Forums › General › General Chat › Investment Advice