The one point I will make about mutual funds is there are many on the list I posted with acceptable management fees, in the 0.02-0.6% range that perform well and get you instant diversification to an extent. In fact, all the funds on that list have to meet certain strict criteria including management fees. A professional stock picker with vast resources has to only outperform you doing it alone by the management fee he charges for you to be money ahead. Personally I wouldn't feel comfortable putting my first few thousand bucks in one stock, no matter how big or established it is but there are many ways to do this right. It's more important I think that you're doing it than it is how you're doing it but it's also important to make wise educated choices that suit your comfort level.

Greg makes a very good point about time. The general rule (not sure it's my rule) is to be more into stocks the younger you are as you have time to recover from a downturn. As you age you slowly get more conservative by transitioning to bonds. A withdrawl rate of 4% of your retirement account balance per year is a common number to ensure you don't outlive your money. You can use this handy calculator to figure how to achieve your retirement goals:

http://cgi.money.cnn.com/tools/retir...entplanner.jsp

I think Greg's best point is about how you FEEL when you begin to build up a savings. :thumbsup: Once you begin to see a growing balance in there you develop a respect for the money and work harder to make it grow.

Good points Erik...

Especially the one that you make about it doesn't matter so much how you're doing it - but that you ARE doing it.

Mutual Funds have their place - and most people feel more comfortable letting the pro pick. Nothing wrong whatsoever about this form of investing. But I will point out that PICKING THE RIGHT Mutual Fund is every bit as hard - and as important as picking the right individual stock. Most people just don't understand = nor can name their mutual fund = which means they can not follow (at all) a mutual fund. They tend to buy and hold and not go back and see what's up -- UNTIL they notice they're down 30% from the prior year. Then they SELL -- and then they buy the next mutual fund that had the best performance from the last period. THAT my friends is the fastest way to lose your ass... I see it happen CONSTANTLY.... people wake up and they get their statement and they're down - they panic and sell (at the bottom) and they then "re-invest" at the top. 99% can't even tell you why they bought what they did - nor tell you the top 3 holdings in the fund.

I like the "pride of ownership" of saying -- Yeah -- I own "such and such"... and it's easy to name the 5 or 6 you own - and it's easy to understand and or to hold through a down period because you actually know what they are and why you bought them.

When the market SUCKS --- I remind myself by looking at the stocks on a long term (10 years or 5 years) chart - and I see that - over time that line is low on the left and higher towards the right. Then I "skip the dips"... and I am reassured that I'm on the right course - OVER TIME.

There's all kinds of ways to get there -- you MUST just choose something that you can live with and JUST DO IT! That way there's no right or wrong way.

I think I need to go to the WELD SCHOOL OF INVESTING! I wish I understood my investments a little better. All good info that I will look over again once I have my portfolio in front of me.

Thanks Greg. You're correct, this is my savings and I feel I have enough to play with as well as keep on hand should an emergency arise. That's why I called it investing 102. I felt like I had my retirement stuff set up correctly and in their appropriate accounts and wanted to venture into the next thing which I consider less conservative or more risky. Yet, I don't know squat about that stuff so I figured I better ask. This is money I will eventually spend on a house or car stuff I believe so I don't want anything risky. I just want better than 0.80% lol. Besides, who knows how long it'll be before I can actually spend it on a car or house. By that time, I may just leave it well enough alone and start the car fund over again.

For what it's worth, my Roth IRA is through Vanguard and it's their Star account which is a very low management fee mutual fund. I'd have to look it up as to how it's diversified through stocks, foreign and domestic, and bonds. I couldn't begin to tell you what particular companies or bonds the money is in though. Its doing just fine for me though considering it's a long term deal.

Also, I'm 31 and started the Roth at 26 but didn't necessarily max it out at 5k every year.

I'm glad to see others getting some information and knowledge out of these posts as well. That was my intent and I'm glad it's working out that way.

This thread is a better read than most. Better than most stock watch sites. Easy to understand advice from a person who lives it not someone trying to sell it. Thanks Mr Weld....more please LOL

+ 1 :)

Hey Greg, have you ever thought of writing a book lol? So far I've focused on property which I really enjoy and I'm comfortable with. I can tell it's not the route you'd take but I am looking to put a small amount of funds (say 20K) into stocks but dont feel confident enough to go ahead yet.

I'm hands on so would be managing things myself...what literature would you suggest I delve into to boost my confidence/knowlegde? Maybe like a "stock market for dummies" type book or similar, heck any knowledge source for a newby would be a start.

Thanks for your contribution to the thread :hail:

Are you saying you don't believe in the concept of a guaranteed, low-interest fund even for people who don't need an emergency fund? I'm assuming this applies to a person who can meet their current obligations WITHOUT employment or having to pull from their other investment buckets.

All you have to do is read what I've already written -- that is INVESTING FOR DUMMIES 102 right there!

Can't make it much simpler...

Open an account - with a discount brokerage.... put some money in it.

Buy some big name big cap stocks that pay you a dividend.

Get more money - add to your account -- and repeat the above.

Whether you have a little money, or a boat load, the principles still apply... buy good names - diversify - don't get greedy - keep your investments to 5 ish percent so no single investment can hurt you in the event it goes down and or is a loss (think ENRON -- Too big too fail - BS!)

I have a Schwab account - it has a boat load of dough in it - but I still only own 21 stocks in the account. I don't need a lot of stocks - I just need good ones. I take a bit more risk because I can afford to. SO while I have McDonalds - I also own JNK - HYG - and NLY. That is an entirely different level of investing and not suitable for most on here if you're asking these basic questions. I live off my dividends and bond income. I raise my dividend income "average" by taking some positions that are riskier - therefore they pay higher dividends. SO my COKE (KO) is offset with some Annaly Capital Management (NLY).

My biggest gainers so far this year ---

Phillip Morse -- cigarettes! = Symbol PM - pays approx 4.7%

Altria -- more smoke... symbol is MO - pays approx 6.4%

Kinder Morgan Partners - oil and gas pipelines -- symbol KMP - pays 6.2%

McDonalds - junk food - symbol MCD - pays 3.3%

Con Edison - power - symbol ED - pays 4.8%

I offset the 3% stuff with the high risk as mentioned above - Annaly pays like 14%... I can afford to play that game I'm not trying to build capital or increase my retirement account... so don't you guys go there.

Just go to YAHOO finance -- or Google finance -- and put in those symbols -- then go to a chart and look at 5 year or 10 year or whatever they'll let you choose for time -- and look at the chart for each one. You'll see all manor of ups and downs in the squiggly line -- but the basic course over time is UP... so if you can train yourself to IGNORE the "noise" = hold steady - don't freak out - collect those dividends -- add to your account when its down the most and buy MORE stock when it's DOWN... YOU WILL BE REWARDED in time.

Well Neil -- the biggest statement in here is that everything in investing "needs to be adjusted to suit the needs of the individual investor". So a guy that has no bills - has plenty of income - has plenty of cash -- is an entirely different scenario than someone that IS NOT in that enviable position.

Personally I ALWAYS have a buttload of cash on hand. Cash is king. It allows me to buy something on a moments notice and NOT have to sell something in order to raise the cash. A real life for instance.... happened in the last week... my brother in law wants to buy a 4,000 square foot building - it's brand new - bank owned - cost 600K to build in 2010 - bank is asking 450K - I told Jay to offer 300K all cash close in a week... their counter was 335K --- BAM - Done deal. I'll carry that paper for 6%. What I DID NOT have to do was fret over what to sell in a down market - so I did NOT have to take a loss on something in order to take advantage of this "deal". I'm in a completely different "place". But it's still the same thing with different zeros... Maybe a little cash stash comes in handy to buy tires that are on sale and you need.... or whatever. The statement "you can never have too much cash" --- is only true for a guy that only has $500.... because cash doesn't make any money at current rates. But having "some" is always better than not. It just has to suit your comfort level. The rest should be making you money.

Think of money as employees -- every dollar is ONE employee.... they need to be WORKING to make you some money. Some of them are slackers - some need to be re-trained (sold to buy something else) and some are truly in a league by themselves (keepers). BUT YOU NEVER GIVE 'EM A DAY OFF IF YOU DON'T HAVE TO!:woot:

You just need to keep working.... You ain't retiring 'til you're finished with "da bubble". :unibrow: :D