Investing Question (be nice, I'm new at this)

[bimetalaupt]

Jan 7, 2011 19:28:32 GMT -5 bimetalaupt said:

MOLLY,
i BOTH AGREE AND DISAGREE WITH YOUR HUSBAND.. YOU CAN "PLAY" THE MARKET ON PAPER AT ZERO COST.. PICK 11 STOCKS .. ALL YOU KNOW AND ALL WITH HIGH BOND RATING OR VALUELINE RISK RATING OF 1..

WATCH THEM ON THE COMPUTER WITH SAY GNUMERIC ( FREE) AND SEE HOW MUCH MONEY YOU WOULD HAVE MADE AND HOW MUCH YOUR DIVIDENDS INCREASE.!!! YOUR HUSBAND CAN DO THIS ALSO .. GOOD FUN!!! MY WIFE AND MOTHER DID THIS YEARS AGO WHEN MY MOTHER WAST TRYING TO TEACH MY LATE WIFE ABOUT FINANCE....

JUST A THOUGHT,
BRUCE
S

TOCK HOLDING IS FOR THE LONG TERM...I HAVE SOME MY GRANDFATHER BOUGHT IN THE 1899...
LOK AT THINGS LIKE JNJ,HNZ,K,KO,PEP,PG,DUK,XOM, ETC.. THINGS YOU BUY EVERY DAY!!!.. THEN YOU WILL BE LESS INVOLVED WITH THE GDP!!! AND WILD FEDERAL RESERVE MOVES AS WE HAVE SEEN OVER THE LAST 30 MONTHS..
GDP..[/img]

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[cw3jgn]

Jan 1, 2011 18:02:54 GMT -5 ❤ mollymouser ❤ said:

My wonderful DH is working toward a military retirement somewhere between 2014 and 2020.

We really don't want to just walk into a place like Charles Schwab and say "what do you suggest?" ... so we're looking for some suggestions, guidance, ideas ... especially for places that don't have a lot of fees.

My second post here. You hit a nerve here on two accounts.

First let me say Military Retirement is a wonderful thing just so long as a family can live with the adversary in the time prior to retirement.

Second I went with USAA, started out with auto insurance in 1980 and I dumped quite a bit into their Mutual Fund programs about a year ago. Both IRA & non-IRA. You're doing yourself an injustice if you don't even talk to them.

Best of luck,
Jim

[Deleted]

Hi Molly,

I didn't see your post until now. I suggest reading "A Random Walk Down Wall Street" to understand why Indexed Mutual Funds are probably the best investment for the average investor. Heck, even really, really bright people like Phil (and he's a rocket scientist!) agree.

We own both mutual funds and (mostly) blue chip stocks. Despite the roller coaster ride over the last 2.5 years we are back where we were in June 2008 through reinvesting dividends.

I have found the Morningstar website really helpful. You can get a free subscription and access a lot of basic information. Last month they did a series on retirement issues that I think you will find helpful.

Good luck and enjoy the research!

[IPAfan]

Just sit on your $25k (in CDs or whatever) until the market crashes the next time. Work on a list of companies you'd like to own. Since you're very risk averse I'd focus on blue chips (big companies that pay out dividends and have increased those dividends a long time.)

In the situation you describe I'd probably look at very stable companies like PM, JNJ, L, etc.

Buy the companies on your watchlist when the market tanks and everyone sounds terrified about the stock market (often called "blood in the street.") Then hold for retirement.

[2kids10horses]

Molly,

There are ways to mitigate risk. But, as many have stated before me, without some risk, there is little if any reward.

When it comes to investing, people are driven by two opposing forces: Greed and Fear.

Now, for some people, fear of loss is greater than their greed for gain. My mother is one of those people.

Others greed so overwhelms their fear of loss they become gamblers.

Most of us fall somewhere in the middle.

You need to examine your "Fear of loss" and determine how much loss you can tolerate, what amount of gain you are expecting and over what period.

You need to learn about investing, leverage, diversification, stocks, bonds, and real estate. You don't have to become an expert in any of these things, but you need to have an awareness of how these investment work, who they are appropriate for, and how to get started.


I'm sure there is a "Investment for Dummies" or something similiar you can get at the library to get you started.

[gsbrq]

I am pretty risk-averse in general, but I hold very little money in cash.

Why? Because inflation is a fact of life, and it eats away at the purchasing power of your money, so leaving everything in cash means letting your savings melt away bit by bit...which is too risky for me. Yes, it was hard to see my investments take such a dive back in 2008, but by staying invested in stocks (and investing even more during the crash), I've watched them all come back...and then some.

I like Vanguard Star Fund for beginners.

[Value Buy]

Molly, Kind of surprised you do not know what a blue chip stock is.........we have to start with basics.
Never use the term "play the market" it will whip your axx from day one.
I would suggest if you are in no hurry to start investing, go to CNBC.com, and enter a fake portfolio of stocks that you "could possibly like to own". Enter an amount of shares in your portfolio, say 100 shares each, and just watch what happens with your portfolio every week or so.
I have seen posts about funds being scary, because they can lose 40% value in a market down turn, but even more importantly, you have to know whether they are "loaded" funds, or no load funds, and what the typical costs these funds charge or make for their buying and selling stocks inside these funds.
I am happy with some simple Vanguard and Fidelity index funds. Always keep reinvesting the dividends, which I assume you would be doing, if you want the portfolio to grow.
Also look at some electric and gas utilities. Some dividends are up to 5% with not much risk of the dividend disappearing, although the stock price can go up and down depending on interest rates and big portfolio players deciding to get in or out for various reasons.
Many funds, will provide a questionnaire on your "investing abilities, and your karma for volatility", and even age appropriateness portfolios based on your years to retirement.
As always, never listen to any of us, and do some homework on your own, although you have some really good people to listen to here. (other than me, of course)