10k to invest
#1
10k to invest
Recently had a short term investment mature, and ill be putting my earnings from my internship this summer into some investments. I don't want to put money back into a CD, money market, or other short term investment, with the interest rates so low right now.
Im 21, and want to get a start on retirement saving, since I'll be going to grad school and wont have a job for another 2-3 years. so I wont get a crack at that 401k for a while. I was thinking of putting the maximum contribution of 4k into a roth IRA. After this, putting 4-5k into a mutual fund. I was thinking of going with a fidelity fund, and allocating it with 60% stock, 25% bonds, and 15% international funds.
With the rest of the cash, im thinking of investing in bank stocks, right now they are low, but they will bounce back, and they pay great dividends. Mainly Wachovia and Citigroup.
Basically, im looking to start a fund for retirement, get a good base for some growth with the mutual funds, and to make some cash on the bank stocks. Any thoughts on this or any better ideas? Id like to get as much input as possible before I spend 10k.
Im 21, and want to get a start on retirement saving, since I'll be going to grad school and wont have a job for another 2-3 years. so I wont get a crack at that 401k for a while. I was thinking of putting the maximum contribution of 4k into a roth IRA. After this, putting 4-5k into a mutual fund. I was thinking of going with a fidelity fund, and allocating it with 60% stock, 25% bonds, and 15% international funds.
With the rest of the cash, im thinking of investing in bank stocks, right now they are low, but they will bounce back, and they pay great dividends. Mainly Wachovia and Citigroup.
Basically, im looking to start a fund for retirement, get a good base for some growth with the mutual funds, and to make some cash on the bank stocks. Any thoughts on this or any better ideas? Id like to get as much input as possible before I spend 10k.
#2
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I'm sure many peeps on here will have good suggestions to help out. My only thought is: You will need the money sooner than you think. You have 10k now but you said you wont have a job for another 2-3 years. How are you going to afford to live for the next 2-3 years with all your money wrapped up in a retirement account? If I was you I would put it in something much more liquid like an online savings account or even stocks. At least stocks you can always sell if you need the cash.
Also, dont put your money in the financial sector. They may eventually recover but it may not be for 2-3 years and you may need the money sometime between. There are much better/safer plays in stocks and some great companies have been beaten down. I'd wait for a while, let the dust settle on this "recession" and then put your money in some solid stocks like the ones that are regularly suggested on this forum and elsewhere.
APPL, GOOG, etc to name a few. Youll be alot happier and liquid with those picks than in a IRA. Plus, if in 2 years you want to purchase a vehicle, buy a house, get married, etc. you will have the money to do so comfortably.
Also, dont put your money in the financial sector. They may eventually recover but it may not be for 2-3 years and you may need the money sometime between. There are much better/safer plays in stocks and some great companies have been beaten down. I'd wait for a while, let the dust settle on this "recession" and then put your money in some solid stocks like the ones that are regularly suggested on this forum and elsewhere.
APPL, GOOG, etc to name a few. Youll be alot happier and liquid with those picks than in a IRA. Plus, if in 2 years you want to purchase a vehicle, buy a house, get married, etc. you will have the money to do so comfortably.
#4
You really think bank stocks are not a good idea? I dont see these banks going under, but a 2-3 year recovery period is something I can live with. I can pick up bank stocks for a steal right now, and when the economy picks back up, stock prices will climb again, and I will be sitting pretty.
Ive looked into some online savings accounts and short term CD's, however the rates arent there. I think I can get a much better rate of return on a fund of some sort, rather than just plopping my money into an account. Im weary of investing in many stocks right now, because I really dont have the time to research them, and check on them on a regular basis.
So from my understanding, the mutual fund will have a better rate, but obviously little liquidity.
I forgot to mention, that I will have another internship this summer, which pays very well, and that money will go into savings for living expenses, and to finish paying off my car. I just want to set myself up a decent base while im young, and have no major expenses.
Ive looked into some online savings accounts and short term CD's, however the rates arent there. I think I can get a much better rate of return on a fund of some sort, rather than just plopping my money into an account. Im weary of investing in many stocks right now, because I really dont have the time to research them, and check on them on a regular basis.
So from my understanding, the mutual fund will have a better rate, but obviously little liquidity.
I forgot to mention, that I will have another internship this summer, which pays very well, and that money will go into savings for living expenses, and to finish paying off my car. I just want to set myself up a decent base while im young, and have no major expenses.
#5
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well when do you actually plan on investing?
the trick is to buy the stock right when it starts its ascent upwards. not buying it and have it be dead money for 3 years. you might as well put ur money in cd and then buy the stock in 3 years right if thats what you think will hapen. i would read up on which banks are doing well and which are not. wfc and usb are still healthy relative to C, BAC, WM... if you want a safe bet with decent dividend, just plop your money in MO
but...why invest like an old man. dump taht $hit in aapl now.
the trick is to buy the stock right when it starts its ascent upwards. not buying it and have it be dead money for 3 years. you might as well put ur money in cd and then buy the stock in 3 years right if thats what you think will hapen. i would read up on which banks are doing well and which are not. wfc and usb are still healthy relative to C, BAC, WM... if you want a safe bet with decent dividend, just plop your money in MO
but...why invest like an old man. dump taht $hit in aapl now.
#6
Registered User
ING Direct offers retirement services. Haven't dealt with them before but just throwing out an option.
http://home.ingdirect.com/products/redirec...=SBP2&u=OptionA
http://home.ingdirect.com/products/redirec...=SBP2&u=OptionA
#7
Individual stock, whether it's financials or AAPL, GOOG are very volatile investments. My current dividend play is SDY, an ETF which tracks 50 companies with great dividends, not just in the financial sector.
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#8
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I've been shorting the financial sector off and on for like six months now. So has every other investor with half a brain... and you want to go long? Good luck to you.
If you're honestly thinking about buying Citigroup for the dividend, I sincerely advise you to stay the hell out of the stock market, because you've got no idea what you're doing. I wouldn't be surprised if Citigroup runs out of cash to pay a dividend soon.
Get a high-yield checking account somewhere (5% APY can be easily obtained with a little searching). That way you make a few bucks faster than a CD, and you keep it completely liquid. A lot of credit unions and online banks offer these kinds of accounts.
- Warren
If you're honestly thinking about buying Citigroup for the dividend, I sincerely advise you to stay the hell out of the stock market, because you've got no idea what you're doing. I wouldn't be surprised if Citigroup runs out of cash to pay a dividend soon.
Get a high-yield checking account somewhere (5% APY can be easily obtained with a little searching). That way you make a few bucks faster than a CD, and you keep it completely liquid. A lot of credit unions and online banks offer these kinds of accounts.
- Warren