Investing Suggestions?

[stumpy041486]

Hey

 

I am currently a student, but I have some money saved. I would like to make an investment, but I am not sure what kind? I am thinking somewhere around $1000 to invest. This will be my first investment (first of many I hope). I am open to any suggestions. This is money that I don't necessarily have to have immediate access to either. I have thought about doing lots of things, but I am not sure what is the best. Everything from buying a valuable coin and holding it, to mutual funds, and stock market.

 

Thanks for any suggestions

[porcupine48]

Best of luck,you will get some fine advice here!

[Dwaine]

Coins are not investments. I would suggest either bullioun or the stock market.

[Bruceswar]

If you do not need the money fast and would rather not chance losing your money into the stock market, buy a few nice coins and hold onto them. Coins rarely go down in value if held 10 or 20 years. They only go up. I would suggest spending the first $100 on a few good books, before you buy anything. With that said ask questions and listen to what many say. There are tons of people willing to help you find the right coin for you. You will come to find you like certain coins and some not. By what you like, have fun, enjoy it and most of all, read all you can before buying.

[WinstonWare]

Coins can be a fine investment in a well diversified retirement portfolio. With that said, coins make a terrible investment for people who have not invested a lot of time studying them. Even still, most experienced collectors will concede that they lost money on the first few coins that they purchased. I know that I did.

 

If you’re new to coins, I’d suggest you only spend a small fraction of your money on coins and anticipate losing most of that but being more knowledgeable from the experience. I’d invest the rest elsewhere.

 

[MarkFeld]

Don't take investment advice from strangers on a forum, especially if you don't even know what you want to invest in.

[dean1345]

Educate yourself before jumping into acquiring coins. Introduce yourself to Mark Feld and maybe he will take you under his wing.

[World Colonial]

Don't buy anything until you know what you are doing. It sounds from your post that you have little or no knowledge of what to do and a position taken from ignorance is an almost sure way to lose money. This also applies to coins bought with the primary purpose of making money which is a risky SPECULATION, especially when the buyer does not know what they are buying.

[michael]

i would buy citibank and GE stock shares half and half

 

with the 1000 usd

 

 

 

 

[michael]

good luck

[DirtyGoldMan]

Put your money in CDs until you have done a whole lot more reading about investing.

 

"Invest" in two books: The Millionaire Next Door and The Four Pillars of Investing. The time and money spent reading both will serve you well throughout the rest of your life.

[physics-fan3.14]

Sage, I haven't read Four Pillars, but I am a fan of William Bernstein. I read "The Intelligent Asset Allocator" and loved it, and am currently in the middle of "A Splendid Exchange." While is writing is a bit heavy sometimes, the subject matter is fascinating.

 

To the original poster: Before you start investing, I always recommend people read this book: http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365/ref=sr_1_1?ie=UTF8&s=books&qid=1248501508&sr=1-1 If you are only going to read one book on investing, this is the book to read. It is basic, well written, the principles are incredibly sound, and it advocates a long term, buy-it-and-hold approach to index investing. If those terms are foreign to you - read the book! These approaches are the same ones advocated by Warren Buffet - the richest man in the world, and the book was written by the disciples of Jack Bogle (the founder of Vanguard, one of the most important investing firms).

[HiHoAudio]

I have never lost money buying rare coins and rare guitars, but I have been collecting coins for 40+ years and know what to look for and have aquired the skills to repair/restore guitars so I don't have to pay to have it done.

 

I have lost a small fortune in the stock market. Be careful...

 

The only safe investment is a CD from a bank. You won't get rich but your money will grow over time.

 

 

[World Colonial]

There have been several threads on this topic ("investing") which the poster of the original question probably has not read.

 

And on the question of buy-and-hold, it has unquestionably been a disaster for most though not all of those who have followed it. The outcome would depend upon what they bought, when they bought it and whether they still have it or not.

 

Those who have bought and held the general US stock market or most any index have made no money for the last 10 years (the total return on the S&P 500 during this time is essentially zero) and they have lost money adjusted for purchasing power. A substantial proportion have sufferred substantial losses.

 

Its one thing to be a long term buyer and holder of stocks (or any other asset) when prices are RELATIVELY low during a long term uptrend but entirely another during an asset, credit and debt MANIA of unprecedented historical proportions which is exactly what recently ended and when the average individual was following this practice.

 

At the present time, prices are obviously much lower than 18 months ago but most assets classes are far from "cheap" and this definitely applies to US stocks generally.

 

As for Buffett, I have not read that book or any other he has commented on but what I can tell everyone here is that he did not get rich by buying stocks the way most people do and did. He did the OPPOSITE of diversify through very selective stock selection and was smart and fortunate enough to buy during the middle of a historically powerful bull market.

[physics-fan3.14]

Colonial, I agree. I generally recommend a simple buy and hold indexing approach for beginners or those who don't know or want to deal with anything. I take a little bit more active approach - call it a modified buy and hold. I buy things with the intention of keeping them for very long periods, but when circumstances or opportunity intervenes, I will not hesitate to sell, attempt market timing, or otherwise guide my investments a little more.

 

About Buffet, have you read the recent biography of him "The Snowball." Very good book, very thorough account of his life and business approach and philosophy, and a very interesting read. It goes in detail into most of his major business moves and investments, his rationale, and the outcome. He did not get there through indexing, but that is what he recommends for many investors today.

[gmarguli]

Open an IRA. Stick this money in it and as much more as you can. It'll be the best investment you'll ever make in your life if you start early.

 

 

[World Colonial]

I understand and I absolutely promise you that I am not trying to give you a hard time.

 

I have not read that book and though I think highly of his talent as a businessman and professional speculator ("investor"), I would disagree with him for giving this advice. I understand why he does it but I could not in good conscience give someone advice that I think is poor.

 

The fact is that most people are either not interested in learning how to speculate successfully, lack the skill to do so, lack the discipline to do so or a combination of all three.

 

Most people would think by listening to popular sources and conventional thinkers that anyone can accomplish this successfully when in fact they cannot. Its a ridiculous idea because successful financial speculation is a skill just as the knowledge and capability required of various professions to earn our livelihoods also is, even if most people are not full time speculators. And it actually requires MORE skill than most professions because its an extremely competitive one because the rewards and stakes are so high even if most people do not see it that way.

 

Think of it another way. Whatever profession or livelihood someone has, can someone become proficient or an expert at most of them with no training or experience? The answer is, of course not. Successful financial speculation is far more difficult than mastering the skills for many or most professions yet so many people think they can follow mindless conventional thinking and meet their financial goals with little or no effort.

 

Or take making money in coins. Those of us on this board who have been collecting for many years should know the difficulty of making money this way. There is risk of buying fakes, problem coins, overgraded coins, getting cheated by the buyer or seller and simply paying too much. These risks vary depending upon what you buy and the timeframe, but chances of someone who is not knowledgeable making money are low or nil. And those who have done so almost certainly were long term "buy and hold" followers who bought at a relatively opportune time in the market cycle and probably were bailed out by the rising trend, despite their ignorance. This is equally true of the typical "investor" in financial instruments such as stocks.

 

During the mania, rising markets made a lot of people look like a genius. As far as I am concerned, those days are over for the foreseeable future though it will vary by asset class and market because there will still be large rallies such as now even though its my opinion that this a correction within a long term bear market.

 

My recommendation to anyone is to avoid taking a position from a standpoint of ignorance because it will usually turn out badly unless you are lucky (by riding the wave of a long term bull market) or can rely on someone who is knowledgeable that you can trust. Most people have neither. They may have a financial professional that they have turned this task over to but most of them are either themselves mediocre financial speculators or they may take an action that is not in the best interest of their customers, such as to earn fees or to avoid losing clients.

 

Since most people do not know how to "invest" what they should focus on is savings and wealth preservation. But many do not even know the difference between these two activities and speculating for profit. Others who lack the dicipline to save or who have run the numbers and see the essential impossibility of saving enough money are simply in a state of denial and have chosen to follow conventional thiking because they see no other way. Its a form of fianncial desparation which is almost certainly going to end badly because the trend has been against them or they have reached for "yield" by taking more risk.

[physics-fan3.14]

:thumbsup:

[FILTHYHOARD]

i would buy citibank and GE stock shares half and half

 

with the 1000 usd

 

GE & American Express would be wise investments . Coins are fun and are also my form of therapy. I personally don't consider them investments.

 

 

 

 

[World Colonial]

The distinction you are trying to make does not in fact exist. Coins can either be bought as a substitute for consumption (collecting) or to speculate from price changes. Stocks are also almost exclusively purchased to speculate on the price change, regardless of how long they are held or not.

 

The only exception I would make to this statement is with someone like Warren Buffett mentioned earlier in this thread because he is either running the business or has a substantial say in how it is run. So he is a a real investor because he is creating value. Its basically the equivalent of a small business owner. The retail buyer of coins for profit or the typical shareholder of stocks meets neither of these criteria and the purpose for which they buy both them is identical. When you or I buy stocks, we are buying a piece of paper which provides certain legal rights but our say in the company is effectively zero.

 

Stocks and coins are both financial speculations. Depending upon the price paid and the current trend in the market or market segment, either or both can be profitable or not so profitable. I do not say that you say this, but claiming that buying stocks is like buying into a business has been used by conventional thinkers to rationalize paying absurd prices during the mania (and probably still is now).