Is it worth leaving my money in stock market?

Question

My mom left my 2 kids 8000 each when she died, which we put into stocks. That was 2 years ago, and so far it hasn't made a cent. Our broker (or whatever you call him), keeps telling us to just ride it out, but is there a better way to turn this money into some much needed college money over the next 15 years?

Answer 1

When bear market ends it's good time to buy.

Answer 2

I suggest you to fire your broker.

Answer 3

Hi, Lily Girl,

Stocks have always gone up an average of about 10% in the long run . . .

But that is the LONG run. Can be twenty years or even more. Right now, the stock market is only a little bit higher than the high it reached in 1999.

When will it beat that? Who knows? It will, eventually, but with the uncertainty of this economy, plus politics, plus terrorism, plus baby boomers about to retire . . .

You have two good choices:

1. Convert the money into income investments, and reinvest the income by buying new bonds/stocks . . . which means that in the future you'll also get more income (because you now own more stocks/bonds, from buying additional ones), which you'll reinvest, and on and on until you need to pay the colleges.

Because the stock market is down now, you can buy some high yielding income paying stocks. However, it's impossible to predict how much you'll wind up with. But more than if you put the money into the safest investments.

2. Put the money into the safest investments, certificates of deposit, that pay interest. Reinvest the interest.

If you can get an average of 5%, you'll more than double the money at the end of 15 years. But nobody can tell you for sure because interest rates do go up and down.

best, Rick

Answer 4

Stay the course.  I know it seem difficult but if you change now you have "locked" in your losses. You and I do not know when things will turn around but most likley they will (they always have before). Chek out the article below. You have a lond time for this money to grow. Good luck.

Answer 5

yes. If you choose to own stocks, buy stocks that pay dividends and have a dividend reinvestment plan.  

Also you could try CDs if you wish to play it safe.

http://www.financecd.blogspot.com

Answer 6

You are guaranteed interest in savings and term deposits etc and you won't lose your investment. It may not be what you could earn in the stock market  but on the other hand you won't lose your initial investment either which can happen in the stock market if you don't know what you are doing.  

Personally I would go for the guaranteed interest and at least you know the college fund is growing and safe.

Answer 7

History has shown the common stocks have, since 1926, had an average annual return of between 11.4% (blue chip) to 12.6% (small cap value stocks).  This beats ALL OTHER types of investment.  So for long term (10+ years) your broker is correct (if you or he/she picked good stocks) and "let it ride."  But since you didn't mention which stocks you bought, there is no way to tell.  If bad stocks (airlines come to mind first), then call Vanguard and put in all into their Target Retirement 2025 fund.

Answer 8

I suggest that you contact a discount broker (ask a friend for a name) and have them to have the stocks transferred from the more expensive broker.  Dont "ride it out"  sell what stocks are not working and go to one or two that are working, i.e, growing in price over the quarters.

Answer 9

Gee whiz! You have to take responsibility for your investments. Learn and know what you are doing. Don't depend on a broker. If you haven't made any money in two years you have done very badly. Extremely badly. Go to the library and borrow some books, read them and learn about investing. Read the business pages. In 15 years you can easily turn $8,000 into $100,000, and safely. But, learn and don't depend on a stockbroker.

Answer 10

There's no better investment in any 15 year time frame, leave it in stocks.