First time investor?

Question

I am 18 years old and have 6000 dollars saved up, and have a income. I am interested in starting a Roth IRA, I feel that that with my income that I will be able to afford 100-200 a month. I would like to know if it would be advisable to go through the bank or to look at a online investing site. I keep hearing that I should invest in mutual funds because the interest rate is way more, and I also hear the risk is way higher. what I am asking is are mutual funds too much risk for a first time investor?

Any tips would be great.

Answer 1

Use a financial consultant. We use Thrivent, not only did they set up an account to meet our needs, but they provide several other services for free that are highly beneficial. Edward Jones and other firms will do the same thing.  Banks typically use things like free gifts to get you in, but can have more hidden fees. Mutual funds are a great way to invest for the first time! Good luck and way to start your financial life on the right track!

Answer 2

Hi there. I am kinda new in investments too. But I have found some valuable resources online for investing and hope to put together a blog that steers people in the right direction. Seeing that you got a good chunk of change. I think you are on the right path. One thing I did in 2001 was buy government bonds for a 30 year,long-term investment. They are I-Bonds and give better return than CDs or most other bonds. And can be cashed in anytime, but that may not be what you want. Basically the most concise answer I can give & best solution is to research big time, but also have a diversified portfolio. If you can predict the future then you can make some serious money, but still make money if you are half the time right. Find experts who really know what they are saying and ignore  all the hype that many produce. Basically wading through and weeding out the ones that are not good takes time.

For mutual funds, I am not sure if it is too risky. Though keep in mind that the market has been volatile so maybe more risky than you wish. If it was me I would use a grand for higher risk investments. Then 3 grand for long-term, but get the best return on interest with little risk and then use the remaining to create a second income. Either by starting a business or making money online.

Answer 3

for first time investor, i think you can try overnight income investment. it more simple, workable, profitable and  no risk investment. And actually your money will grow daily.  

Answer 4

Index fund or any mutual fund with low fees.  Roth and regular IRA's work out the same the question to ask is how much will you be making when you retire?  If you think it will be a lot (high tax bracket) then Roth if you think it wont me that much (SS) then just a plan old IRA.  What hurts the first time investor is fees not market risk as long as you are in it for the long term.  Banks will be higher in fees then an online investing site.  The 100-200 a month will be ware you make your money by dollar cost averaging.  If the market is high it buys you less shares if the market is low it buys you more shares.  Buy low sell high.  You might want to stagger that 6000 so that you don't invest it all at the same time. At 18 don't just think IRA=retire it can also mean first time home purchase, education expenses for you and your dependents, health insurance when you are unemployed all with out penalty.

Answer 5

I recommend an online brokerage firm that has good beginner qualitys {like tutorials or an easy to understand set up}, i use zecco, {for my roth also}  better then schwab, etrade, etc. they are the only ones with free stock trades, no minumums..all the others will charge you fees for trading, but compare and see for yourself. Good luck and happy investing! btw...mutual funds are compromised of several, sometimes hundreds of different stocks, hence your risk is low, you have been given the wrong info on that subject.

http://friends.zecco.com/r/a7a2877caab81...

Answer 6

A Roth IRA is an excellent way to start investing.  In order to start an IRA, you can go through an online broker.  I currently use Firstrade ( http://www.firstrade.com/ ).  They offer no-fee IRAs so you don't have to worry about setup, maintenance, inactivity, and termination fees.  You should definitely check them out.

As for your question about mutual funds, no, mutual funds is not too risky for a first time investor.  In fact, I would recommend mutual funds over stocks for beginners because mutual funds are managed from professionals and are also diversified.  To learn more about mutual funds, you should check out Investopedia ( http://www.investopedia.com/ ).