Author Topic: New investor needs help  (Read 3735 times)

StashthatCash

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New investor needs help
« on: June 12, 2014, 04:09:54 PM »
Hi,

I am pretty new to the MMM blog.  In my short time I have managed to build a comfortable emergency fund of about 4 months of expenses and now I have saved enough to open a Vanguard account ($3,000 min on most accounts)  I would like some advice on what anyone would recommend a first time investor put that $3,000 into.  If you need other information just ask

Thanks!

matchewed

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Re: New investor needs help
« Reply #1 on: June 12, 2014, 04:22:16 PM »
Read JLCollinsnh's stock series.

Create an Investment Policy Statement that takes into account your risk tolerance, timeline, and goals. Keep in mind when creating your Asset Allocation that shit will hit the fan several times in your life and you will have your net worth cut in half many times on the long road.

Try to keep diversified within your acceptable risk tolerance (AKA Asset Allocation), and minimize fees.

Focus on maximizing your savings and the rest of it will take care of itself.

And you can't really go wrong with a total US market index fund.

AssetGrinder

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Re: New investor needs help
« Reply #2 on: June 12, 2014, 06:17:54 PM »
For a new investor a simple index fund ETF might just suit your needs. When you plan on investing more I would do some more research on your own. Your number one tool is yourself to increase your financial education which you can do by reading websites, books or even taking a simple investing course. Lots of information out there for free. Learn the basics about Bonds, mutual funds, ETF,s, preferred stock, common stock and dividend paying stocks. Best of luck!

StashthatCash

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Re: New investor needs help
« Reply #3 on: June 13, 2014, 08:06:13 AM »
I just read a bunch of articles on JLCollinsnh's blog.  There definitely is a lot of help there for a beginning investor like me.  Thank you for that link, could just get me to retire in the next 10-15 years.

matchewed

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Re: New investor needs help
« Reply #4 on: June 13, 2014, 08:41:05 AM »
I just read a bunch of articles on JLCollinsnh's blog.  There definitely is a lot of help there for a beginning investor like me.  Thank you for that link, could just get me to retire in the next 10-15 years.

No problem. Just remember the more you can save the faster that time happens. The investing is the nitty gritty, the saving is the big picture and huge impact stuff.

noblewolf

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Re: New investor needs help
« Reply #5 on: June 14, 2014, 11:58:35 AM »
Buy Vanguard Total Market Index Fund (VTI).

LLCoolDave

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Re: New investor needs help
« Reply #6 on: June 14, 2014, 04:13:26 PM »
Buy Vanguard Total Market Index Fund (VTI).

+1

When VTI gets to $10k, exchange $3k for the main international fund. There is even more to do when your retirement accounts have more $$$ (small caps, reits, and value funds) but this is a good enough start.

LLCoolDave

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Re: New investor needs help
« Reply #7 on: June 14, 2014, 04:25:05 PM »
I use Vanguard funds but for a young investor like yourself Vanguard does make it hard to be properly diversified with $3k minimums. There are a lot of mutual funds that have $1k minimums but they have higher expenses. The $3k minimums keep costs low.

Cwadda

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Re: New investor needs help
« Reply #8 on: June 14, 2014, 07:26:35 PM »
I just read a bunch of articles on JLCollinsnh's blog.  There definitely is a lot of help there for a beginning investor like me.  Thank you for that link, could just get me to retire in the next 10-15 years.

You can ask us, random strangers with the same frugality interests, but it's better to educate yourself. It goes a very long way.

Will

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Re: New investor needs help
« Reply #9 on: June 14, 2014, 07:41:54 PM »
I use Vanguard funds but for a young investor like yourself Vanguard does make it hard to be properly diversified with $3k minimums. There are a lot of mutual funds that have $1k minimums but they have higher expenses. The $3k minimums keep costs low.

I disagree.  Owning even the S&P 500 index is pretty damn diversified by itself, but you can get a total US stock index (most stocks available in the US) or even a total world stock index.  Cannot get much more diversified than that!  Owning 3 funds for $1k each doesn't necessarily make one more diversified than a $3k Vanguard fund.

noblewolf

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Re: New investor needs help
« Reply #10 on: June 15, 2014, 08:28:12 AM »
Second to that!