So I just got a new job and I'm making quite a bit more money now and would like to take a small portion of my paycheck and put it into stocks.

A lady from Valic came by and gave me something on deferred comp. My question is, should I stick to deferred comp or should I also open an account with one of these trading websites and buy some small shares on my own?

I am all new to this, so I'm looking for opinions.

 

Personally, I let my bank's advisors handle all of that for me. I initially tried investing in stocks on my own, but it is HARD to keep track of everything. You have to first pick something that you THINK is going to do well and watch it closely to make sure it doesn't take a turn for the worse. You should research the company and see what business decisions they are making. It is just too much for me to keep up with.

My bank, for no extra charge, provides investment advisors who will call me every once and a while to go over my portfolio. They understand better than me what is doing well and what isn't. Granted, they are in it for money too, so they may steer me towards whatever the bank is pressing at the time. But they have yet to really steer me in a bad direction.

I've found mutual funds that invest in a range of bonds and stocks to be the best for me personally. I really don't invest in anything that is high risk. I balance between 5 or 6 different funds that range from conservation of funds to medium aggressiveness.

 

i would first. max out my compnay 401k.

next have 6 months on income in an emergency account.

pay off any credit card, student debt. anyhting higher than 4%.
i made a chunk last year and paid off my house. this year my chunk will secure my 2 kids college. in 2010 my chunk bought my Z06.

i have dabbled in stocks and it is not my thing, you win som eyou lose some...

the problem is that we all have a different idea of what "quite a bit more money" is.

 

Using pretax dollars for investment will provide you with an extra 20% or 25% or so to invest. The trap is that if you take out this money prior to retirement age, you must pay the current tax rate plus a 10% penalty for early withdrawal. It is a great way to provide for retirement but if you are going to want to get the money to "buy things" down the road, it's not a good thing. The penalty defeats the purpose of the pre tax investment. Maybe it would be wise to do both, some pretax, some taxed. Regardless, unless you are a sophisticated investor, my advise is to use a bank or investment counselor and get into mutual funds. You can go conservative, middle of the road, high risk high return, or a mix. Just tell your advisor what you want out of the investment.

 

I just put all my extra cash under my mattress

 

That could get very lumpy.

 

I plan on doing this eventually my self Alex. I think a huge field to invest in is going to be in the 3D printing companies. GE is getting in on that now.

 

Depends on how much cash he's saved.

However, I'll add my 2 cents worth (or maybe it's less). *shrug* I like both BROTHERDAVE's and Bluejay's advice. If you can get any kind of employer matching from your employer, max that kind of contribution out, provided you are content with the place the money is invested. And make sure you can move the money if you need to later on if you change jobs.

If you invest money on your own, unless you are VERY savvy about the market and have a lot of money to play with, stick with a well-known, low cost mutual fund. I'll go out on a limb here and recommend the Vanguard Fund family. There are several "index" funds that are highly rated and, if you're a bit more adventurous, there are some that have a slightly higher risk for a potentially greater reward.

You can establish either an ordinary IRA or a Roth IRA with mutual funds.

- Jack

 

I would look into a 401K, most 401K plans will invest your money for you if you want.

Or go to an investing firm, like Edward Jones and get a financial advisor, they can then set you up with a money market account and invest it for you.

 

I wish I could go back to 2008/2009 and buy up a bunch of Ford stock for cheap

 

finacial advisors are a joke and there to make money.

I have alot of money with a guy and he dosent know me. i made some changes inside of my own funds that out performed what he suggested.

they will suggest whoever is making them the best deal that day. they are not going to be good advicing short term gains, if they were that good they better be driving a $100k plus car and have the rollex mariner and basically dont have time for anyone that doesnt come to play with less than $500k.

never short term (risk) money you cant afford to lose. now if we are talking throwing $2k to $5k at a few stocks...have fun. there again if you cant lose it , dont risk it.

no debt, maxed out 401k, 6 months of salary socked away. then knock yourself out playing the market. if you have all that, you are better than probalby 90% of the population.

 

Personally...I would ONLY invest in precious metals- that I held in my hand, no paper.

But that only after other practical items were procured. I think you'd do better in firearms and classic cars personally.

Not under any circumstance would I go the 401K or stock route- but it's your money- be ultra leery ANY advice you get.

 

I appreciate the concern about an eventual collapse of the stock market. It's not quite a 'bubble' at the moment, but it is being indirectly propped up by the fed printing so much money.

Like millions of other Americans, I'm pretty damn vulnerable. Can't take out the money without penalties, but fear the bottom will fall out when I need my money the most.

If the OP's employer matches his 401k contribution, IMO he should take advantage of that to the max. It's unlikely that they have a matching option for guns and classic cars.

 

I just closed my 401k stock account and rolled it over to a money market account. Decided it was time to lock in the balance.

 

Good for you. If I was at retirement age, I'd be tempted to do the same thing. But it would also be tempting to roll the dice for a few more years while the fed and politicians cook up new ways to keep the market propped up and interest rates on alternatives forced down.

FWIW, when the market truly collapses, a loss of 2/3 to 3/4 would fit within the historic range. The odds of a collapse before I retire (20+ years from now) are very very high, IMO.

My advice for anyone is keep your consumer debt down.

If home ownership is right for you, mortgage debt is often worth the risk. Lots to consider when determining if its the right time for an individual to buy a home, so I can't make any blanket statements there.