I want to invest my stimulus check...?

Question

How is the best way to going about doing it? What are the kinds of things to invest in? What should I invest in? I want to be able to come back in 30 years and be rich. Please explain it to me as though I were a 5 year old, and if there is anything I should know about that investors and brokers wont tell you. What are the fees and what would be consider too high? Is there any specific national broker that is honest and trustworthy? Thank You in advanced...

Answer 1

i'm going to assume your check is for 600 so there are a few ways you could play this right now. you could invest $100 in 6 stocks. 200 in 3, 300 in 2 or something between. Mix in an Oil or Natural gas if you do that but sell if gas goes under 4.00 per gallon. or invest it all (or some) in the top pick of the market which right now would probably be Potash.

I think I'm gonna wait for the 220 range in Potash maybe 225 and buy that. I'll sell when I get nervous

Answer 2

Well you shouldn't be investing in mutual funds unless you have at least $2,500 to invest and you shouldn't be investing in individual stocks unless you have at least $10,000 to invest. The best place for $300 is in the bank until you have enough saved up.

Answer 3

Katie, check out all the other answers.  Then, check out prosper (dot) com.  If you go with prosper, I suggest loans of $50 each, to spread your risk.  You will not get 'rich' but you will find it interesting and probably quite profitable.  I think the economy will get worse thru 2008 and 2009, so be very careful.  Good luck.

And, you aren't five years old.  Your grammar and sentence structure show that.

Answer 4

there is nothing you can do.

if you only start out with a few hundred dollars it will get you nowhere fast.  the average person has more money than that invested.

Answer 5

If you have debt, I would pay that off first. if you interest rate on debt is say 8% or more, then you need an investment that guarantees you more than the rate you are paying on the debt. otherwise you aren't getting ahead, and you have to pay taxes on the gain on the investment.

1. pay debt first.

2. open roth ira (fidelity.com has a no fee account)

3. invest 10% of the money each month until it is fully invested in 10 months.

4. i would look at the S&P500 Index (get a no load fund). 80% of fund manages can;t beet the S&P over time, so why not own the index. You will have 500 of the largest US companies.

5. further help. see an advisor with 10-15+ years experience in the market.

good luck!

see my prev posts for more info.

You can invest on a monthly basis (auto-draft from checking or savings - good idea) with many no-load funds for as little as $25 to $50.

Answer 6

You need to invest in stocks, but you need to learn on your own to get real good, the basics you can read in books.

Answer 7

Well Katie you did not tell us how much the stimulous check is for.  $600 ?  That is not a great deal of money to invest.  Most mutual funds have a minimum investmetn amount of $2500.  There is however  a couple of  options open to you.  That would be to open a brokerage account and either invest in a load fund, which has a $500 minimum initial investment or to invest in either an exchange traded index fund or a closed end fund neight of which has a significant minimum.  Brokers who are honest and trustworthy.  That is not your real problem.  I believe they all more or less are.  Your real problem is to find one that is intelligent and knows investing.  With the amount you are talking about investing, that might be difficult to find.  Most will tell you to invest in a mutual fund if they are half intellegent and willing to take the time to talk to you at all.  The mutual funds they are most likely to recommend are American Funds Growth Fund or possibly American Funds Fundamental Investors Fund.  Both are decent funds for the long term.  

If a broker recommends something other than a mutual fund you should walk away.

You can buy stocks and mutual funds through an on line broker such as Scottrade at very reasonable rates.  Scottrade sells some mutual funds without a sales charge which for you would be an advantage if you could find one with a $500 minimum.  Otherwise you will be limited to an ETF--exchange traded fund.  There are some execellent ones available that might be suitable since you are a long term investor.  Now you will not be rich in 30 years unless you continue to invest every year year in and year out and somewhat more than $600 annually.  More like $2000 to $5000 annually.  A couple of index funds worth consideration are SPY a fund that tracks the S&P 500, the 500 largest corporation in the U S and EFA that tracks the largest world wide corporations not in the U S.   Among the closed end funds I have a particular fondness for GAM which has been in existance since 1928 and a track record that has yielded a 15% annual return since 1979 and a positive annual return every year except one for the last 10.  An admirable record.