Looking to start Investing

[justin22g]

First of all, I have barely no knowledge on this subject..

I have messed around w/ buying and selling penny stocks in the past, but just for a hobby.

I don't have much cash to throw together, but I am going to throw money into my account every month(let's see how long that will last :shrug. I am about to graduate college, and I want to start investing some spare money for the future. For a house, retirement, or whatever comes up.

I am really looking into mutual funds. I know they can be a tax burden, and I really don't know where to start.

I want a fund w/ >1% expense ratio and nothing higher than a 2-3% yield. Should I lean toward a large growth fund, govt bond fund, or what?

What should I look for?

If I end up following through on this, I might need the money in 6-7 years to put a down payment on a house. But, I might not end up needing it for that. I know investing is all about when you will need the money. I just need to know where to start?

I am also looking for a fund that has a min. investment lower than $1,000. I don't have much, but hey, its a start.

I did a search earlier through Ameritrade and I found a couple funds that I like... SWANX and NAMAX. Anybody w/ some knowledge, check them out and tell me what you think, and if I'm heading in the right direction.

Thanks in advance!

 

[Equity Trader]

I may be able to help you

I may be able to help you

Hi Justin,

I have written extensive articles on the pitfalls of investing and being able to make huge gains in the pennyarcade..It's all in the method on when to holdem and when to foldem.

Trading pinks is like playing Monoply..You augment your gains/profits into investment grade issues.

Here is a few links that may help you.

The 3-day rule on trading.
http://www.stockmarketquarterly.com/messageforum/view_topic.php?id=17&forum_id=10

The 3 P's of Investing and the Strategy that can maximize your ROI.
http://www.stockmarketquarterly.com/messageforum/view_topic.php?id=15&forum_id=10

Market makers control the action on the penny arcade not shareholders..
http://www.stockmarketquarterly.com/messageforum/view_topic.php?id=16&forum_id=10

Have a good day
Varok
http://www.stockmarketquarterly.com/

 

[selkirk]

Justin had a look at Swanx, and maybe someone who follows the US mutual funds can add more, to these.

Swanx vs. SP 500
1 year -6.66% +7.72%
3 year +6.05% +10.09%
5 year +12.39% +11.63%
ytd -6.66% +7.72

so basically this year and the past 3 years we were better in the SP 500 index. not sure what they charge to run this fund, but investors should get some of their money back.

did not look up the Namax but is seems is a mid cap mutual fund, so you should compare it to a midcap index.

when looking for mutual funds, look for low fees, low mer (management expense ratio). also check out the fund has done against its index.

for instant if it is a big cap compare to the sp 500, or small cap/small cap index. ect.

Justin why not start with an index mutual fund. Vanguard have some in the US and there are probably other options. sure you will just get the avearage however 75-80% of mutual funds do not outperform the index on a regular basis.

after you build up the index mutual funds you may want to look at ETF, there are some that have very low mers, they trade like stocks, would look at Vanguard here also, though there are about 800 and more every day.

would pick a genral market index US, perphaps a large cap (sp 500 index fund), then you want int. exposure, maybe a emerging market fund. the majority would be in a US index mutual fund, and would put a little in a bond fund (there are many in index).

by the way for looking at an index product the lower the fees the better, so after you build them up then you can swith to an etf, if the fees are lower and do the same thing.

when I went to college tried to put $150, and then $200 a month, it seemed huge then but putting a little away every month helps.

finally once you build these up, then look for managed mutual funds, and maybe even pick stocks out on your own....

good luck and learn from your mistakes or try to.....

thanks
selkirk

 

[justin22g]

Thanks man. That really helps. I have been doing some reading, and apparently a MER below 1% is what I should be looking for? and also, should I check out the after-tax ratings?

I have been depositing small amounts in my accoutn for the last 3 months, but I need to get a grip on things before i start making trades.

One of the guys I play golf w/ back home works for wachovia as a reitrement specialist... next time I head home I'm gonna give him a call and see what his insights are as well. He also told me about ETF's... and of course I don't have that amount of money to invest.

I'll give you an update whenever i decide to pull the trigger.... I don't want to just dive in... I need to search around a lil and get some insight.

thanks again!

 

[dawgball]

Congrats, Justin. Good decision by you to make investing for your future a priority early.

Here is a good place to read up if you are willing to spend some time and worm-hole through some articles.

http://www.fool.com/school/basics/basics.htm?source=ifltnvpnv0000001

 

[Skins1080]

Penny stocks are a big gamble, so they are certainly not the place to invest any substantial portion of your total portfolio.

When it comes down to it, mutual funds with low low expense ratios are the best for the long term.

 

[justin22g]

I ended up buying two mutual funds for the time being.

AMAGX
SWFFX

 

[dawgball]

When it comes down to it, mutual funds with low low expense ratios are the best for the long term.

Why not go with an ETF over a mutual fund? Mutual funds don't make any sense to me at all.

 

[justin22g]

Why not go with an ETF over a mutual fund? Mutual funds don't make any sense to me at all.

I would like to, but I'm a poor college kid that doesn't have the min. requirement to invest in an ETF.

I haven't done much research on them, but the lowest one I have seen was around 10k min.

I have a 1/4 of that. I know its not much... but I've got to start some where.


I have high hopes for SWFFX. the financial sector has taken a beating and hopefully it will turn its frown upside down!:00hour

.... sorry, i've had a few :shrug:

 

[dawgball]

I would like to, but I'm a poor college kid that doesn't have the min. requirement to invest in an ETF.

I haven't done much research on them, but the lowest one I have seen was around 10k min.

I have a 1/4 of that. I know its not much... but I've got to start some where.


I have high hopes for SWFFX. the financial sector has taken a beating and hopefully it will turn its frown upside down!:00hour

.... sorry, i've had a few :shrug:

http://en.wikipedia.org/wiki/Exchange-traded_fund

There is no minimum for ETFs, justin. They trade like stocks do.

Trading
Perhaps the most important benefit of an ETF is the stock-like features offered. Since ETFs trade on the market, investors can carry out the same types of trades that they can with a stock. For instance, investors can sell short, use a limit order, use a stop-loss order, buy on margin, and invest as much or as little money as they wish (there is no minimum investment requirement). [22] Also, many ETFs have the capability for options (puts and calls) to be written against them. Mutual funds do not offer those features.

For example, an investor in a mutual fund can only purchase or sell at the end of the day at the mutual fund's closing price. This makes stop-loss orders much less useful for mutual funds, and not all brokers even allow them. An ETF is continually priced throughout the day and therefore is not subject to this disadvantage, allowing the user to react to adverse or beneficial market condition on an intraday basis. This stock-like liquidity allows an investor to trade the ETF for cash throughout regular trading hours, and often after-hours on ECNs. ETF liquidity varies according to trading volume and liquidity of the underlying securities, but very liquid ETFs such as SPDRs can be traded pre-market and after-hours with reasonably tight spreads. These characteristics can be important for investors concerned with liquidity risk.

Another advantage is that ETFs, like closed-end funds, are immune from the market timing problems that have plagued open-end mutual funds. In these timing attacks, investors trade in and out of a mutual fund quickly, exploiting minor variances in price in order to profit at the expense of the long-term shareholders. With an ETF (or closed-end fund) such an operation is not possible?the underlying assets of the fund are not affected by its trading on the market.

Investors can profit from the difference in the share values of the underlying assets of the ETF and the trading price of the ETF's shares. ETF shares will trade at a premium to net asset value when demand is high and at a discount to net asset value when demand is low. In effect, the ETF is providing a system for arbitraging value in the market. As the initial costs are one-off, the ETF vehicle offers some cost advantages over other forms of pooled investment vehicles.

Never feel like $2,500 is a small amount. I would almost guarantee that it is more money than 99% of investors had working in the market at your age.

 

[dawgball]

I have high hopes for SWFFX. the financial sector has taken a beating and hopefully it will turn its frown upside down!:00hour

Take a look at XLF. It is an ETF that for the financial sector. I agree that it is a probably a good area to get into now.

http://finance.yahoo.com/q?s=xlf

http://finance.yahoo.com/q/pr?s=XLF

 

[kneifl]

Great mutual fund

Great mutual fund

CGMFX Ford Focus fund

Based on oil, commodities, and metals. A very, very good mutual fund that is run by Ken Heebner. This is one of the best funds out there year after year if not the best.

kneifl

 

[dawgball]

CGMFX Ford Focus fund

Based on oil, commodities, and metals. A very, very good mutual fund that is run by Ken Heebner. This is one of the best funds out there year after year if not the best.

kneifl

Will this fund be negatively affected IF this proves to be a bubble for oil, nat gas, etc.?

"If" capitalized for emphasis.

I don't think now is a very good time to be snuggling up to oil. I think it's similar to when your grandma was talking about investing in Pets.com and WebVan. Just an opinion, though.

 

[selkirk]

Justin an etf is the same as any stock, you can buy any amount you want, etfs like vti, and vwo are also very liquid so you do not need a broad lot 100 shares. they are very liquid.

if you look into etfs make sure you buy ones that have low fees, some new etfs have mer of 1.50-2%, why bother.
so stick to the ones that have low fees. and build a balanced portfolio.... easy to do with etfs.

then when you buy stocks or mutual fund you can compare the performance to your etf portfolio...in most cases mutual funds will not be able to match the performance.

though oil may pull back, hope it does, believe it wil stay strong in the long term...as for natural gas was at one time worried that LNG would mean lower natural gas prices in North America...

now believe LNG is one reason why natural gas prices will stay strong and even go higher.... people should prepare to pay 9-11 (maybe much more) for their natural gas. with LNG you can ship natural gas anywhere and the prices are climbing quickly in Japan and Europe. so why bring it to North America to paid less.

though North American production is coming on stream at 7 these projects would stop or overall driliing in North America would drop by 20-30% on a year over year basis.... and demand is only climbing...

if someone can tell me if 2008 winter will be cold would be even more bullish. overall demand worldwide is increasing and cannot keep up with supply...so prices have to increase, to encourage more drilling.

thanks
selkirk