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I would like to start investing in mutual funds for short term and long term. Anyone have any tips? I don’t have the time to start doing research. How do I know if I should invest with a particular money manager? What questions should I ask? If its not against the moderators rules, please tell me if you have any recommendations in the Lakewood area?
Thanks for all your help!!
A few tips:
1) Read a lot, from lots of different people
2) Pay off debt first, making 9% on a mutual fund makes no sense if you are paying 18% on your credit cards.
3) Look at the fees, every fun charges fees to manage the money, lower fees are better
4) If you don’t understand it, walk away
5) If it sounds too good to be true, it is, walk away
6) Check out index funds, they tend to be dull but have low fees and work well over the long term
7) Don’t do #6 because I said so, but because you have done the reading and understand it
8) If you are asking for help, make sure you understand who you are asking
9) “Free” advice often is a sales pitch, and may not be so free.
You would be wise to to take the time to educate yourself about basic investing before you commit any funds. There is plenty of information available at the library or on the internet.
I would suppose people like me, who idle their time on the hallowed confines of the CR haven’t much to offer on the subject. You don’t need MY guidance.
Actually I found that the book investing for dummies was quite good.
If all else fails and you are planning to leave the money alone for at least 5+ years go with the Vanguard SP500 Index fund. You can invest as little as $3000, the fees are low.
The advantages:
- It is an old fund
- It tracks a well known benchmark, the SP500
- It invests in about 500 stocks, so you get a lot of diversification
- The expense ratio is only 0.17%, so for every $100 you invest they only take $0.17/year to run it
Disclaimer, I am still trying to get out of debt myself, so I don’t have any money invested in this, nor do I have any interest in this or any other mutual fund.
Disclaimer #2, Jack Bogle who founded the Vanguard group when to the same high school I did, many years before me, I shook his hand once. You probably don’t care about this
Use a mutual fund company that has low fees, like Vanguard, Fidelity or T.Rowe Price.
Slow and steady wins the race.
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