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 gluke bastid
Stinky Bum
 
Registered: 12/21/00
Posts: 3,248
Loc: Charm City
Last seen: 10 hours, 38 minutes
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 Investing... Please help! 
#7378650 - 09/07/07 02:52 PM (5 years, 8 months ago) |
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So basically to make a long story short I have about $3000 that I could safely invest, currently sitting in a Bank of America savings account making me about a dollar a year.
I want to put about $1000 to open an IRA and put the rest in a mutual fund or mutual index fund. I don't know anything about the market, I don't really want to know anything about the market. All I know is that I would like to make a safe investment and make a modest amount of compound interest and be better off down the road than if I didn't do anything.
Can anyone give me advice on where to put my money if I am an idiot when it comes to the market and have no intention of changing?
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Society in every form is a blessing,
but government at its best is but a necessary evil
- Thomas Paine
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 Veritas
Registered: 04/15/05
Posts: 11,088
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 Re: Investing... Please help! [Re: gluke bastid]
#7378695 - 09/07/07 03:05 PM (5 years, 8 months ago) |
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If you are not interested in learning about investing, I would recommend finding a higher-interest savings account. Emigrant Direct, Capital One & Citibank all offer @ 5% interest with their online savings accounts, there is no need to monitor your investment, and no risk to your principal.
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Stizzle
Stranger
Registered: 04/26/07
Posts: 754
Loc: Tuvalu
Last seen: 4 years, 10 months
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Re: Investing... Please help! [Re: gluke bastid]
#7378699 - 09/07/07 03:06 PM (5 years, 8 months ago) |
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Put it all on red.
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ZippoZ
Knomadic
Registered: 06/17/03
Posts: 12,629
Loc: Pongyang, North Korea
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Re: Investing... Please help! [Re: Stizzle]
#7378707 - 09/07/07 03:07 PM (5 years, 8 months ago) |
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naw, bet it on the line at the craps table 
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PEACE
 zippoz
"in times of widespread chaos and cofusion, it has ben the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m anagment, too much programming and controll, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"
"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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gluke bastid
Stinky Bum
Registered: 12/21/00
Posts: 3,248
Loc: Charm City
Last seen: 10 hours, 38 minutes
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Re: Investing... Please help! [Re: Veritas]
#7378784 - 09/07/07 03:28 PM (5 years, 8 months ago) |
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Thanks for you advice. So just a better savings account, huh?
I have heard that index funds tend to be a pretty simple and safe form of investing. Any truth to this?
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Society in every form is a blessing,
but government at its best is but a necessary evil
- Thomas Paine
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Veritas
Registered: 04/15/05
Posts: 11,088
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Re: Investing... Please help! [Re: gluke bastid]
#7378930 - 09/07/07 04:08 PM (5 years, 8 months ago) |
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Any time you are investing in the stock market, you incur some amount of risk. Mutual Funds allow you to diversify with a small investment, since they pool funds of many investors. This is less risky than buying stock in one or two companies, but still more risky than a savings account. If you really don't want to do the research, I don't think it is a good idea to get into the stock market in any way.
Additionally, it is advisable to have at least 6 months living expenses in a savings account or CD prior to investing in stocks. You don't want to gamble what you can't afford to lose.
I get 5% interest on my WAMU savings account due to a special online promotion. It is convenient for me to have a bank with a local branch, but in your case (one-time, lump-sum deposit), one of the online banks would be fine.
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GnosticWarrior
Hermit
Registered: 03/11/07
Posts: 241
Loc: Oahu, Hawaii
Last seen: 4 years, 3 days
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Re: Investing... Please help! [Re: Veritas]
#7380900 - 09/07/07 10:17 PM (5 years, 8 months ago) |
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The best thing is to invest in what you know. If you don't know it, learn it. However, an individual can't be an expert in everything and our results can be better by entrusting the help of others.
For help in selecting a mutual fund try looking at Gurufocus.com: http://www.gurufocus.com/forum/read.php?2,4582
What you're really buying is the expertise of the fund manager. For the know nothing investor, you are correct in that index funds are your best bet. However, several fund magagers on the site have outperformed the index over long periods of time and by some wide margins.
Normally you shouldn't buy stocks with the money you want to invest bcs you don't have enough to diversify with at least 15 to 20 different holdings. But take a look at Citigroup. One of the largest banks, currently with a 4+% dividend yield. Dividends can be taxed more efficiently if you are above the 15% tax bracket. You might want to consider being part owner of a the bank and entitled to a piece of the profit vesus a just being a depositor? Also right now looks like a good entry point to build a position.
http://www.gurufocus.com/StockBuy.php?symbol=c&Submit=Search
http://video.morningstar.com/video/videoreport.asp?vp=tomgayner&cat=stock&ticker=&acg=v
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