I acquired 96K Im 18 want to invest it but dont know where to begin, thinking about gold any tips?

Question

Its okay my grandma died and left me a share of her money!

Answer 1

Start an IRA.

If you need a tax deduction for tax year 2008, put $4,000 into a Traditional IRA.

If you do not need a tax deduction for tax year 2008, put $4,000 into a Roth IRA.

Buy $30,000 worth of I Series Inflation Protected Savings Bonds. If possible, use a credit card that gives 2% cash back and pay the credit card off at the end of the month. That will give you an instant $600.00 extra. I think you can't do that any more but it is worth a try.

Start a Brokerage account and invest in about 4 different mutual funds that are no-load, no transaction fee, and use dollar cost averaging.

Answer 2

IRA for sure, and definitely don't actively manage your own money - hire a professional through a mutual fund. Just don't lose your money to all those internet scammers out here.

Answer 3

I would really seek a professional with 10-15 years experience in the business for advice.

In simple terms.

1. Forget the Traditional IRA. Small tax benefit now, but 100% of withdraws are taxed as ordinary income at future tax rates. Do you think taxes will be higher or lower in the future? Nuff said.

2. Instead, consider opening a ROTH IRA. Max out each year. Tax free withdraws on principle after 5 years and no income tax on gains after retirement 59 1/2. Get a no fee account such as with Fidelity.com

3. Dollar Cost Average in the S&P 500 Index (no load fund or stock symbol "SPY"). Reinvest ALL dividends in the S&P 500. This is key for making money long term in the index!

http://en.wikipedia.org/wiki/Dollar_cost...

http://en.wikipedia.org/wiki/S&P_500

Avoid Gold. According to Chase Global Digest, Gold is the second worst performing investment class after diamonds.

If you bought gold 28 years ago, you are about ($100-150 gain -whoopie!!!) from where you bought it, technically at a loss, because inflation ate away buying power.

If you invested in the S&P 500 Index 28 years ago you would have multiplied your money many times over.

You need a 10+ year time frame when investing in broad market indexes.

Looking for short term safety?

US Treasury Bills and US Treasury Bonds.

Buy directly from US Government (no fees). Principle Guaranteed by US Government. Unlike a bank CD, there is No federal income tax on US Treasuries.

http://www.treasurydirect.gov/indiv/myac...

If you have other income, (I know you're 18), the best thing you could do if you could work it out is to buy a bank owned home that is selling 40-50% below current market.

1. You have a place to live.

2. In 10-15 years the property should have increased.

3. Tax deduction benefits.

This is a rare opportunity to buy distressed property. I wouldn't buy any home, only a distressed short sale or bank repo that is (again) 40-50% below current market. A good aggressive real estate agent can help negotiate.

If you live in a state where houses are 500k+, this could be more of a stretch.

I would prob put the money into US Treasuries for 30 days and do nothing. Then get sound advice.

Please just don't start aggressive investing, speculating, trading, getting into Forex, gold, buying coins, jewelry, buying a new car, or some other worthless or risky, or historically poor investment.

You have one chance to make a good sound decision. Do you want the money to last or blow it on what's hot now?

I have been doing this for nearly 20 years. There are very few posters who have the creditability, credentials or long term experience to offer sound advice. So be careful.

Good Luck!

Answer 4

Hire yourself a financial advisor right away. Preferably one who works on comission. That way they only make money if you do. With that amount definatly get professional help.

Answer 5

I was kind of in your position in my early 20's and these are the things I learnt.

1. Do not rush in... I lost 50% of my money because of it...

2. What you have is a serious quantity of money. Study the markets and get to grips with the issues that affect them and then trade.

3. It is generally not a good idea to 'invest' in commodities because they are unpredictable.

I'll tell you my profitable method that helped me recover my money after my initial loss.

1. Do not buy small companies, they are high risk. Do not buy big companies, they have no room to grow.

2. Find a medium sized company where it's share price has increased over two consecutive years, preferably three... if it has increased for 2 years, it will probably increase for a third!

3. It's p/e (price over earnings should be less than 13... occasionally the markets get over priced and they look exciting but then they dive.

4. Do not invest more than $4k in any one company.. some companies can look promising and then fall flat, do not put all your money in one company! Do not put all your money in one sector, a whole sector (for example housing) can decline at once.

5. When you actually, you will be checking the markets every 5 mins! Investments take time, put your money in and sit back and relax and wait for them to increase. Do not rush out of a trade or panic if they decrease in value. If your method is right, they will increase.

You could spend a few weeks going through every company in the stock market accumulating potential targets. Then you narrow them down to a limited number which you do further study on. Then you invest. The markets are volatile at the moment and unpredictable which is another good reason not to rush in. A lot of changes are taking place and it is really difficult to know what is good to invest in. I would advise a year of thought and reading a good economic newspaper every day like the Financial Times. By then things should have improved. Good luck.

Answer 6

Gold is probably a bad idea, as it has reached a 20+ year peak.

You need to learn about investing, seek a financial planner or someone certified to help you. Until then, start at the below site - it will help you define objectives, make a plan, understand your risk tolerance, and get started with the basics (and the writing is very easy to understand for someone without a finance degree). Good luck.

Answer 7

Good for you !!!   Look into growth mutual funds (like mid-cap growth) or index funds.  Diversity your money into several different funds.

Answer 8

I don't mean to be a hardnose, but the people denouncing gold are leaving out key points.  For example, the person that said the one company that said Chase Global Digest ranked gold as the 2nd worst performing asset next to diamonds.  It's interesting that Chase Global digest said "28 years ago".  That's because 28 years ago, gold reached it's peak.  For 22 years after that gold was in a brutal bear market.  Yet, what the poster (and Chase Global) failed to tell you was that from 1971 to 1980 gold went from $35 per oz to $850 per oz - a return of 2,329%.  Yet from 1966 to 1982, stocks were in one of the most brutal bear markets in history and for 16 years went no where and showed a loss of 22% during that time.

Yet, the poster also fails to mention that from 2000 to today, the Dow is up a whopping 120 points, a total return of 1% in the last 8 years.  The S & P 500 is showing a LOSS of 15.4% during that same time period.  Yet, from 2000 to now, gold went from $280/oz. to $886/oz as of today, a return of 216%.  And when people say gold doesn't pay a return/dividends, well, how many stocks pay dividends?

Also, people saying gold is trading near a 20 year peak are making a very erroneous analysis.  In terms of "nominal prices", yes, gold is above it's all time high set in 1980, BUT you have to look at "real prices".  Adjusting for inflation, gold would have to trade somewhere north of $2500/oz. to equal it's 1980 all time high.  Silver would need to trade at $365/oz.  Gold would have to go up another $1400 and silver over $340 to equal it's 1980's inflation adjusted high.

And what really baffles me is that gold has only been in a bull market for about 6 years now - after being in a secular bear market for 22 years, yet stocks have been in a bull market since 1982 (26 years) the longest bull run in history and no one even questions that.  No asset goes up forever.  All assets have cycles.  In stocks, from 1949 to 1966 was a 17 year bull market, from 1966 to 1982 was a 16 year bear, and from 1982 to (really 2000) now has been a bull cycle.  

Don't get me wrong, I'm not anti-stocks.  During the 80's and 90's, I was very pro stocks, but I also knew that stocks also run on a cycle and I saw that cycle ending in 2000.  In 2002, precious metals bottomed (gold at $250/oz and silver at $4.50/oz).  

Gold and commodities are reacting to the decline in the dollar and when the Fed lowered interest rates a few months ago, they telegraphed to the world that they were not going to defend the dollar.  A devaluing dollar is inflationary.  Think of it this way; from 2001 to 2008, crude oil is up 130% in Euro's, 170% in Canadian Dollars, 135% in Australian Dollars - but up 305% in US Dollars.  The world is losing faith in the dollar.  The US Dollar index is now, just 2 points above it's lowest level EVER.

I personally began buying up silver when it was in the $4/$5 an oz. range.  It's now trading near $17 an oz.  I've seen my investment more than triple in 6 years.  I saw the cycles in stock ending in 2000 and I shifted my focus.  Remember, all investments have cycles, the pros know that and the pros always make money because they know when cycles are completing and act accordingly.

Also, if people tell you that gold is in a bubble, I beg to differ.  Their rationale for a bubble is that price shot up.  That's not the true definition of a bubble.  When a bubble exists in an asset, there is no fundamental reason supporting such a rapid price rise and there is an overhang of supply and the general public loses any common sense and buys so they don't miss out.  During the equity bubble, within the last 5 years, people were buying just because they could.  Companies that had no revenues, no sales, no product saw their stocks skyrocket.  People bought just because the company had a ".com" in their name.  Every other day there was a new IPO - stocks were greatly out of sync with normal valuation models - and we saw what happened.  The housing market was the same - people bidding $80,000 above list, people buying houses sight unseen, people believing that prices would keep rising forever, builders building at a rate of 2 million units per year, when the population was growing at a rate of 1.1 million a year (a huge overhang of supply) - and we are witnessing what happened - everybody was becoming a flipper or real estate investor.

But do we see that same mania in gold?  No, most people are still shunning gold.  Also, there are fundamentals that are driving the price of gold.  The fed is pumping the money supply at an unprecedented rate (along with the major central banks).  There is no overhang of supply, as a matter of fact, gold demand is vastly outpacing supply by millions of ounces a year.  Remember, gold (precious metals) are sensitive to inflation as are commodities in general.  We have seen the price of crude oil more than double in a very short period of time.  Are commodities volatile?  Sure they are.  But to apply that solely to commodities is erroneous.  Look at anyone that had stock in Bear Sterns.  I do trade commodities, but I'm a true trader, I have no market bias.  I will short a asset in a heart beat if I see indications that prices will fall and I will go long just as quickly if I see the signs of a rally.  Most people have a market bias.

I personally can not tell you what you should do.  What I see is the Fed taking a path that is leading to the destruction of the dollar and I'm investing accordingly.  What you MUST do is not listen to me or anyone else in this forum.  You're 18 and asking very wise questions, so you have the mental acumen to make good decisions.  Most 18 year olds would blow it on a car and junk, but you're thinking with a very mature mind.  Pay attention to what the fed and government is doing relative to the fiscal policy of this country.  Then compare various investments and see how they react to such policies and then make your decision on what to do.

I personally am not investing in stocks or any "paper" assets because those assets are cashed in in Dollars.  Why would I want to get paid in a currency that's about to fall of the edge of a cliff?

During the Weimar Hyperinflation, the people the did well and prospered were the ones that had gold and silver.  I see the U.S. heading down that same path.

Answer 9

I would buy some gold if I were you. Also silver is the better choice but haveing both is best. I would buy 5 to 10 ounces of gold bullion American Eagles. I would also buy 300 to 500 ounces of silver American Eagles or Canadian Maple Leaf Silver bullion coins as well. That yould be about a 15% to 20% hard asset position. The rest of the money I would put into a growth mutual fund, FDIC insured CDs, an international growth mutual fund, ROTH IRA (if you have earned income). I woulnt buy individual stocks at this time. But I would start learning about them. But gold and silver is good to start with. You want the physical gold and silver. Stay away from the ETFs untill you have some gold and silver in physical form. I just bought 100 Silver Maple Leafs this morning. I use Monex. If you call them they will send you a free information packet. Their number is 1 800 444 8317. I have used them and have never had a problem. The information is useful to have even if you dont buy anything from them. They will send you a wonderful produced DVD that has alot of historical information in it.

Answer 10

Park it in gold...you have a great idea, dear. Also some silver if possible.

Avoid everything related to the dollar. The dollar is losing ground.

Avoid the stock market...it's very overvalued. It is going to lose ground for the next 6-8 years, in my opinion. Therefore avoid mutual funds also!

Learn as much as you possibly can about Long Valuation Waves. The stock market runs in approximately 34 year cycles, we are currently on the downside of this trend. Learn history as much as possible, especially how this point in time reflects prior crashes, such as the Great Depression.

I want you to look at the essays this guy writes. Here is the one you should read FIRST AND FOREMOST!

http://zealllc.com/2002/valu.htm

Research, Research, Research.

Gold is HEADED MUCH HIGHER, avoid current mania trends such as blind faith in the stock market...which are sputtering.

Answer 11

Gold is not actually an investment; it's just currency.  Gold only goes up as a result of inflation, with paper currency (like dollars) becoming worth less.  Since the dollar has dropped a ton recently compared to gold, I would think the best time to invest in gold is 5 years ago.  I'd avoid it like the plague now.  that's just me.

If you're 18, honestly, you'd be crazy not to invest every nickel of it in quality growth mutual funds with a 10 year track record of good returns.  Stocks outperform everything else in the long run, and you've got more time than anybody.  Individual stocks are very risky, and you're a beginner.  So you need professional money managers that'll work for 1% a year.  that's mutual funds.

Answer 12

Stock market if u dont mind me asking how did manage to get that much at such a young age. Inheritance, B-day present? Good for you and good luck.

Answer 13

Gold is not too great an idea because it has no way of earning a return.  The tax rules associated with buying and selling gold are also against you.  It is treated as a collectable with special tax rules.  Since you are 18 you should be thinking relatively long term for most if not all of your bequest.  Since you do not have any experience investing, you are at somewhat of a disadvantage.  It is my belief that your best option is to invest the funds in a diversified selection of mutual funds that are mainly stock funds.  There are several mutual fund companies that have a wide variety of mutual funds to choose from and a decent track record of returns.  These include Fidelity,  T Rowe Price, and Vanguard but there are several others.  Those 3 are among the best.  They are all on the internet and they also will provide you with investment advice if you call them.

A possible investment allocation for someone of your age might be 10% in a money market fund,  20-30% in a large cap fund,  15% in a developing markets fund,  20% in a foreign developed markets fund,  15% in a small cap fund, and 15% in a mid cap fund.  

The probable expected annual return over a 20 year period should be in the 8% to 10% range.

Here are links to the 3 fund companies.

Fidelity

http://personal.fidelity.com/products/fu...

T Rowe Price

http://mutualfunds.troweprice.com/?rfpgi...

Vanguard

https://flagship.vanguard.com/VGApp/hnw/...

Answer 14

I´ve been investing for more than 20 years and trading for almost 14, and I can tell you that if you want to make BIG and FAST profits, I recommend you trading rather than investing, trading can help you to go from rags to rich.

If you are investing, you must have already achieved some degree of financial success, long term stock investing and FOREX can help you become much richer than you are today.

My experiences as a Nasdaq Market Maker, Head trader of several brokerage firms, and currently as a professional trader and private hedge fund manager, I can suggest you that:

We trade because we want quick, short term profits on a consistent basis. We want to cash flow the market. Milk it like a cow.

Make consistent, small, short term gains rather than trying to hit a home run on every trade. Don't ever forget that.

Don't marry a stock, marry the idea of making money trading stocks. That's the only way to do it.

For me "All stocks are equally worthless”

I don't hold on to any illusion that the stock market will continue to go up and provide a nice retirement for me.

I could care less which way the market goes. It's irrelevant to me if the market goes higher, crashes or moves sideways for the next 50 years. I really could care less. Stocks are just four letters with two prices next to them that I use to make a living trading.

Trade ONLY when you have a clear, easy and identifiable advantage, because without a CLEAR EDGE your odds of success are NO better than a flip of a coin… That´s why so many new traders (and investors) lose money.

Take a look at any daily chart of any index or stock and you'll probably see the most volatility and the biggest opportunity for profit during the first Hour of the stock market's opening.

The popular thinking and conventional wisdom is that you should wait about an hour before you start trading.

But if you do, you'll miss the big, fast moves that stocks make as all the amateurs let their emotions out through their

online accounts, usually right after they read some news headline or hear Maria Bartiromo go off about a stock on CNBC.

It's easy to see why trading the open is the market's prime time for profiting from other online traders.

The market's open is very volatile - that is the perfect environment for LARGE, FAST profits.

Learn to trade as a professional Market Maker ,not as an emotionally driven amateur trader or investor with few thousand dollars in an account at Etrade.

There isn't any other time during the day or any stock you can invest in, that can make you 1, 2, 3, 5, 7 or more points

in minutes OTHER than during the first hour the stock market is open. That's why I love trading the open so much.

I trade only when I have an edge and that means "only the first hour the market is open".

If you are a beginning trader, you can give yourself an unfair advantage in the market trading this way.

I can carry on with the advises about how to make money trading, but if you ask me:

"What is the best thing you can do for me?

I will say:

Give yourself a BIG favor and go to this "Top Secret" site and learn how to get the BEST stocks that will make the largest and fastest day trading profits you´ve ever seen, all by yourself...

www.onehourtrading.com

After you review this site you won´t need system, strategy, book, software or mentor to tell you what to do,

you will be able to profit HUGE every day.

Good luck and good trading,

John Fontaine

Answer 15

Being only 18, you have the advantage of time (to give your money a chance to grow).  It really doesn't matter where you invest it.  Seek out a no-load diversified mutual fund.  Your $96k will grow to millions by the time you're ready to retire.

You should consider diversifying by investing a portion (30%) in international funds or ETFs.  Add some sizzle with emerging markets.  Consult with a financial planner like Ric Edlemann (ricedlemann.com??)

Answer 16

You've already got tons of advice. Just make sure you know how good the investing skills of each person whose giving you advice really is.

You may also want to try xearn.com, which keeps track of the performance of a bunch of investors and you can see what they are doing.