Some help getting started

[jgrif08]

Brand new to the forum. Get the impression that I've come to the right place. Here's my situation: 25 years old, makin' $34k a year (just in case you needed to know), and really looking to get into the game. I've got an IRA with Fidelity and also a 401k at work (which I'm just getting started). So as far as long term stuff goes I think I'm doing all right.

I'm not looking for a miracle. I'm not looking to get rich over night. But what I am looking for is some viable options to make some short term gains. I'd like to have a down payment put together for a house within the next 4 or 5 years.

I've done some research as far as some books to read and I think I'm going to order Cramer's books and possible 'Trading for Dummies'. These will give me some good fundamental knowledge to be sure.

What kind of investments would you guys recommend I start looking into? Should I get some sort online account such as Scotttrade? I mean really I'm looking for advice of the most basic kind. Any thoughts are GREATLY appreciated.

Thanks,
J

[JVanDermark]

I have used Scottrade for about 3 years now and like it. I have never had a problem. As far as what stocks to buy just keep checking here for some ideas, but don't rush and buy just because someone says so. Also avoid penny stocks all most all the time you will lose your money. Im sure others will give you some more ideas.

Good luck

[aiki14]

Brand new to the forum. Get the impression that I've come to the right place. Here's my situation: 25 years old, makin' $34k a year (just in case you needed to know), and really looking to get into the game. I've got an IRA with Fidelity and also a 401k at work (which I'm just getting started). So as far as long term stuff goes I think I'm doing all right.

I'm not looking for a miracle. I'm not looking to get rich over night. But what I am looking for is some viable options to make some short term gains. I'd like to have a down payment put together for a house within the next 4 or 5 years.

I've done some research as far as some books to read and I think I'm going to order Cramer's books and possible 'Trading for Dummies'. These will give me some good fundamental knowledge to be sure.

What kind of investments would you guys recommend I start looking into? Should I get some sort online account such as Scotttrade? I mean really I'm looking for advice of the most basic kind. Any thoughts are GREATLY appreciated.

Thanks,
J

My recommendations for what that's worth:
Put as much as you can into the 401k especially if the company matches.
You can have an IRA as well but you can't fund it pretax. You can move the account to a brokerage and trade in it. Don't take distributions unless life and death or permitted exceptions (like 10k for your first home purchase)
Allocate your 401k as agressively as permitted, you're 25 your risk tolerance will never be higher. Folks here may make specific mutual fund recommendations, I no longer invest in them so I won't.
You have a goal in mind to buy a home, don't forget it. Don't take excessive risk with your trading.
I think you can trade with $2500 to start, others say less. You want to have some reserve cash for trading and at least some diversification (3 or 4 positions) and enough in each to absorb fees.
The best investment is in knowledge, and the least costly. If your money sits while you develop a strategy so be it.

[Luc1Grunt]

First, I agree with Aiki....I no longer mess with mutual funds outside of 401Ks...and that is getting more limited as time goes on.

You state you are looking short term. Are you talking investing or trading? There are very strong differences in the two.

Investing wise...continue slamming as much as possible into 401k.

Trading.....where to start? Find one stock you can watch on an intraday chart and learn it well. If you watch those that have a large daily range, you will see where you can catch intra-day moves with a profit and limit your risk. Look at AAPL, GOOG, QCOM, BRCM, EBAY, NVDA, SBUX for a start.

I trade and I use the profits for additional long term investing so....

Investing side gets the VALUE strategy as well as a few growth potentials.

The TRADING side gets the intra-day picks with VERY LIMITED overnight exposure. I don't need the profits for income (yet), so those gains move into money market and value stocks.

If you TRADE....you need some bank to allow for larger positions. If you INVEST, you need patience and a definate long term goal for your money.

Long winded, but hope that helps. PM me if you want some additional info on the TRADING piece. :idea:

The overall strategy works very well for ME.

[jgrif08]

Thanks for the thoughts guys. Sounds like I really need to hit that 401k hard. Luc1Grunt... I'll be in touch.

[optimus25]

Only put into the 401K as much as they'll match. At $34K a year, you are not in a high enough tax bracket to take advantage of the tax deferred status of a 401K plan.

My suggestions for you aside from the above is to max out a Roth IRA. This is a must for your age. I started investing in my Roth IRA at 19 years old and have a sizeable amount for a down payment of a house. A Roth IRA allows you to take 100% of the money you put in as well as 10K of your earnings for a home down payment. I don't suggest taking more than 10K from your IRA but it becomes evident why this account is beneficial to you. Earnings and growth of the account is Tax Free as long as you follow the rules. Google Roth IRA for a primer on the account. You'll also find it easier during tax time as you don't have to file a Schedule D.

I also like Scottrade as an online broker.

For specific investments, that's tough since I don't know your particular situations ie goals, time horizon for investing, and risk tolerance. Though mutual funds aren't as popular these days due to the proliferation of ETF's and funds underperforming I still like them. Look at Dodge & Cox International Fund. I like their management approach.

[optimus25]

The best thing about your post is that you are taking a proactive approach to your financial future. You can't teach that. The best of luck to you.

[jgrif08]

The best thing about your post is that you are taking a proactive approach to your financial future. You can't teach that. The best of luck to you.

Thanks for the encouraging words! I'll look into the fund you suggested.