Investing

I have been thinking of seriously putting the money I earned from the summer job I had to good use by making it grow. I am thinking of maybe doing some bonds, but my bankers said it takes a bit long and the rates are lower than a savings account.

I am currently looking at this ING thing, but I have no idea what they do and restrictions for their accounts. And finally, stocks or mutual funds might be a good idea too but I am totally blind about these kind of stuff.

I know this is an anime forum and not the best place to ask, but I'll take whatever I can get.

Grumble Grumble Grumble

The first question you have to ask yourself is... 'When do you want to use the Money???' (days?, weeks??, months???, years????, decades?????)

If you want to use the money in the sort term (years or less), then it's best to invest in something short term and unlikely to lose value (short risk) such as money market funds...

If it's long term, then a diversified mutual fund would be your best choice. By buying individual stocks, your basicly gambling that these stocks won't lose value. Bonds will lose value if interest rates go up.

Its best to do some research on the subject, and look at some propaganda, like the Vanguard Group web site...
http://www.vanguard.com/VGApp/hnw/co...ome/Portal.jsp

Well since I am young right now, I have some money I feel like I can throw around for both long and short term. SO I should go to that site and is it like a tutorial??

Grumble Grumble Grumble

Well... of course Vanguard would like to sell you their services... but they DO have alot of materials posted for the investment beginner... Also, their Total Stock Market Index fund (which tracks the Wilshire 5000) outperforms 90% of all mutual funds, and has some of the lowest management fees in the industry...

So mutual funds are those that is almost like a package of different companies, right?? And if so is it companies from the same industries or different ones?

And is the Total STock Market Index fund like the same thing??

Well, I don't know much about investing money, but one thing I learned in my economy course last year... is that you must ask yourself how much monetary risk you are willing to take... like stocks are risky but could get you a lot of money on short and semi-long term (or losse a lot...) if you are willing to take the risk... but if you fell like risky investing is not for you you could go for something like bonds or mutual fonds.... that give's you a interest rate that is the same all over the years... I think that where you want to invest your money depend much more on you and the risk your are willing to take than opinions of others... well that's what I think

Grumble Grumble Grumble

Quote:

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Originally Posted by pyoro-pyoro

So mutual funds are those that is almost like a package of different companies, right?? And if so is it companies from the same industries or different ones?

And is the Total STock Market Index fund like the same thing??

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The purpose of a Mutual Fund is that the Fund Manager takes care of the day to day business of buying/selling stock and doing research, so you don't have to worry about it... (But then again, if the Mutual Fund Manager screws up...) How the Mutual Fund selects the stocks they purchase depends on the 'intent' of the Mutual Fund. Some will invest only in selected industries, (such as high risk startups and growth companies, health care, energy companies, etc...) others will follow official stock indexes (Dow Jones Industrials, Fortune 500, etc...) Some will keep a dynamic balence between stocks and bonds investments (which will change depending on market conditions...) Others can do things, such as do the opposite of what the majority or stock traders are doing, etc. So when you select a Mutual Fund, it's important to understand WHAT KIND OF MUTUAL FUND IS IT!!! and if you can sleep peacefully at night with that choice....

The Total Stock Market Index tracks the Wilshire 5000 index. It doesn't invest in all 5000 companies of the index, but instead, invests in a subset representation of the Index. Since the Wilshire 5000 index represents 80%-90% of stock market trade activity, the Willshire 5000 index can never under perform the total stock market, because it represents the total stock market... (One the other hand, it also means it can never out perform the total stock market...)

If you really really want to learn about this stuff, then take a look at the recommended reading list on Bob Brinkers Market Timer website...
http://www.bobbrinker.com/

sure i'll go check it out, and btw does it have a bunch of lingo that is tough for a newbie like me?