Any advice on how i should invest my money?
I am a 19 year old college student and recently have been wanting to invest my meager paychecks instead of spending them on needless expenses. I was thinking about just investing a small portion of my paycheck into a savings account but I heard that the returns from savings accounts are very bad and not worth it. I read online that it would be better to invest in bonds and such but I don’t know much about stocks and bonds. I was wondering if anyone could give me advice on how a young student as myself should spend his money. I only have about 500 dollars right now and i know its not a lot but i feel like there are better ways i can put my money to use rather than having it sit in my bank account and depreciate in value. Also, if anyone could direct me to some kind of starting point for young investors it would be greatly appreciated. Whether it be informative websites, magazines, etc. any kind of advice is appreciated. Thank you.
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September 1st, 2010 at 9:02 pm
Follow stocks on wall street journal.
Invest in stocks…it’s not the best idea without a strong knowledge of investing.
BUT. I’d try investing in Potash for now. BHP’s (and other companies’) bids, and potash’s rejections, have been causing its stocks to rise.
if you want to play it on the safe side. or more stable side, invest in an acquaintance’s idea or put it in savings
September 1st, 2010 at 9:02 pm
Great question!
Don’t worry if the amount you have is small. It shows that you are a prudent investor, which is the first criterion for being a successful investor. If you do not know much about investing, you should try to stick to simple and time-tested investing principles. My favorite is dollar cost averaging. That is, you invest a small fixed sum of money periodically (say monthly) in a fixed security (say gold), over a long period of time. What happens when you do this is, if the price of gold goes up, you buy little of it at a higher price , and if the price goes down, you buy more gold at a lower price!
It is advisable to invest in gold or silver if you don’t know about stocks and bonds. Stocks may give you a much better return than gold if you DCA them, but you stand the risk of losing almost all your money if your stock went Lehman’s way. Gold has historically given a rate of return that is at least equal to inflation. So you have a good return plus unquestioned safety. In the short term you may lose some money if gold becomes cheaper, but over the long term, the price of gold, as the price of any commodity will appreciate. Buying physical gold can lead to storage charges, so you can buy Gold ETF.
You may find that reading books will be a lot more useful than using websites. The WSJ is considered a must for any serious investor. Benjamin Graham has written excellent books on investing, but they presuppose some knowledge of investments. There are many radio stations that cater to the financial community. And beware of technical analysts and option tipsters etc who offer "1000 times return in 2 years" bcos if it really were true, they would not be offering tips to the public. Good luck!