January 16, 2009

Invest with Confi- Um...

So last weekend I'm talking with my rich Republican buddy about investing (He should start an investing advice blog, that's where the real money is - advice.) He's talking about Bank of America stock, how it's a good deal, if it goes down he might buy more, etc. Well, as it turns out, I'm invested in BoA too! And so are you!

1 comment:

Erin T said...

If you're patient and can handle ups and downs in the market, and are not looking for a quick turnaround (anything less than 10 years), this market is perfect for investing.

You know the saying buy low, sell high? Right now we're in a bear market (low) so people who are cashing out and waiting for the market to pick up again (high) before investing are actually selling low and buying high, the exact opposite of what you should be doing!

If you're scared about taking a risk on a single company or mutual fund, may I suggest index funds? Index funds mimic the market because they are comprised of the same companies in the market they are trying to mimic, in the exact same proportions. So if the market goes up, your index fund goes up. The downside is that your return will probably be slightly less than the market average because of fees you pay to own the index fund. However, because nobody is actively managing the fund by deciding which stocks to pick and in what proportions (like in a mutual fund), index fund fees are usually lower than mutual fund fees.

If you don't have the cash needed to invest in index FUNDS, you can try purchasing ETFs (which are basically like funds) but don't have minimum purchasing requirements. If you'd like more guidance, try reading this article by Richard Jenkins, the editor of msn money.

I started out investing following his advice and was able to make some money. Because I've been following the advice for a few years, my portfolio is about even right now (and not in really bad negative territory).

If you do decide to just follow the advice in this artice and won't be needing any additional advice, I suggest signing up with
Zecco
. There are no account minimums or inactivity fees. Stock and ETF trades are 4.50 a transaction. However, if you start off with $2500 in your zecco account, you get 10 free Stock and/or ETF trades per month (buying and/or selling).

If you'd like to be more actively involved with managing your portfolio, I've found The Motley Fool to be an excellent resource for sound guidance. Zecco might not be right for you if you want to be actively involved in managing your portfolio because it can be a little difficult to navigate and find information at times.

Maybe it's just the optimist in me (it could be the cheapskate part), but I'm really excited that the market is down right now... Everything is on sale!!!! While everyone else is moaning and groaning about this market, I'm scooping up deals and am dreaming of what I'll do with this money in retirement. Of course, it does help that I have a secure government job and don't have to worry about losing my job (taking a paycut, sure, but job loss, not so much). :)

Hope this helps! Happy Investing!