Author Topic: Beginner investing for my son?  (Read 2266 times)

albireo13

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Beginner investing for my son?
« on: March 19, 2016, 07:51:03 AM »
My 24yo son is interested in opening a fund as a long term investment.  He doesn't have much $$ so this will be a starter investment, prob $1000 or less.
I have no investment savvy at all.  Any recommendations for investment funds for beginners?

Thx,
Rob

Tigerpine

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Re: Beginner investing for my son?
« Reply #1 on: March 19, 2016, 07:54:57 AM »
Is he looking to start an account for funding retirement?  Or is he looking for something else?

Knowing his goals first is the best way to figure out what will work best for him.

albireo13

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Re: Beginner investing for my son?
« Reply #2 on: March 19, 2016, 08:37:08 AM »
He's not thinking retirement yet.  Just long term investing in general.  He wants to get his feet wet to start learning about investing.
I suggested maybe go to Fidelity and pick  maybe a fund or 2.  Not sure which to recommend. 
There may be better choices than Fidelity as well but, I am uninformed in this area.

brotatochip

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Re: Beginner investing for my son?
« Reply #3 on: March 19, 2016, 08:50:05 AM »
I personally like holding a few ETF's for my investments.  Check out Vanguards list of ETF's. 

Tigerpine

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Re: Beginner investing for my son?
« Reply #4 on: March 19, 2016, 08:52:01 AM »
I think the "standard" advice on this forum for people starting out in investing is to open a brokerage account with Vanguard and buy VTSMX (Vanguard Total Stock Market Index Fund Investor Shares).

If you go with Fidelity, I would personally start out with something on this webpage.

There are several things to keep in mind.  One is the "Expense Ratio".  That's basically the cost of holding the account.  Lower rates are better.

Another is commisions, otherwise known as "loads".  I personally like "no load" ETFs or funds.  This is another expense to try to minimize.

Also, it is probably best to avoid buying individual stocks unless your son is willing to put in the time to learn the companies he's looking at buying.  It's better (less time an effort) to stick to index funds.

Finally, there is the question of what to do with earnings.  For example, what to do with dividends.  If this is a long-term investment, I would choose to "re-invest".  That means that the earning will automatically go towards buying more of the investment funds.

MDM

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Re: Beginner investing for my son?
« Reply #5 on: March 19, 2016, 03:04:44 PM »
He's not thinking retirement yet.  Just long term investing in general.  He wants to get his feet wet to start learning about investing.
I suggested maybe go to Fidelity and pick  maybe a fund or 2.  Not sure which to recommend. 
There may be better choices than Fidelity as well but, I am uninformed in this area.
Following any of the suggestions already given would be fine.

More things to consider:
 - Even if he isn't thinking about retirement yet, perhaps he'd listen to some good paternal advice that he should.  If Mark Twain's experience is any guide, he might.
 - If he has access to a 401k, he should contribute at least enough to get the employer match.
 - See https://www.bogleheads.org/wiki/Traditional_versus_Roth for which type of account.  If that doesn't make sense, just flip a coin.
 - VTTSX (Vanguard's 2060 fund) is another defensible choice for someone in his situation.  There is a $1000 minimum for that fund.

wienerdog

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Re: Beginner investing for my son?
« Reply #6 on: March 21, 2016, 09:52:24 AM »
Paul Merriman has some free books for the first time investor.  His website is a wealth of information on investing and he also has a podcast once a week on Wednesdays.

http://paulmerriman.com/how-to-invest-series-complimentary-download/