Your Questions About Investing Tips

Betty asks…

I am looking to start investing any tips?

I am 15 and am looking to begin investing. I was thinking bonds and mutual funds but I want to see what may be the best place to start out. Any suggestions?

John answers:

It’s great to see a young person have a real interest in investing. I wish I had started at 15.

You need to be 18 to sign a contract, so you need a parent to help you open a custodial account. Good firms include Vanguard, Fidelity, Charles Schwab.

Educate yourself before investing. A few great books:

One Up On Wall Street – Peter Lynch
A Random Walk Down Wall Street – Burton Malkiel
The Intelligent Investor – Benjamin Graham (classic, but a more challenging read)

Mutual funds are diversified, so lower risk than individual stocks. On the other hand, I think you learn more by buying and following a company. Either way, start out as a long term investor. Don’t trade frequently until you have more experience.

Michael asks…

Good investing and business tips ?

I’m only 15 but want to start working and investing any tips for a youngster?

John answers:

Rule #1: There is no such thing as a “good investment” or a “bad investment”. All investment opportunities have a favorable price at which it makes economic sense to risk the loss.

Rule #2: Before investing in anything at all, determine how much it will cost you to extricate yourself from the investment.

Rule #3: Always perform a “cash on cash” calculation to see if the price quoted makes sense. Most people paid too much for real estate because they didn’t compare the price to the cash-on-cash indicated price.

Rule #4: Invest only in things you fully understand.

David asks…

what are some good investing tips?

I am new to investing/ trading so I was wondering what some good advice

John answers:

Only invest money you can afford to loose.

Invest for the long term, rather than trying to play the market.

Trade through a company with small fees.

Only invest in companies that you understand what they do and can explain it in one sentence.

Diversify – buy in several industries.

John asks…

Iam 20 and looking to start investing and trading any tips and how do i start?

whats should i do.(penny stock,mutual fund,scotttrade,estock) how should i begin trading as a young investor

John answers:

You shouldn’t do anything more complicated than a mutual fund.

Lizzie asks…

To the investors out there, can you give me tips on investing wisely?

I have read on the net something ab’t it. it says that “Investing is the key to building wealth, but investing in and of itself is not enough. You have to invest wisely!”

John answers:

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. has an on-line questionnaire which will give you an idea of how to do “Asset Allocation,” determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. And ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

Buying a house instead of renting will save you a lot of money in the long run. You don’t have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don’t know how to handle deadbeat renters, you can have trouble.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.


Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)

Web forum:
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)

529 plans:

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