To start a new portfolio, and with $2000

Question

How would you play the market? I am extremely new to investing, and want to learn, but I also dont want it to be like a casino...I hope to get in on some discounts and hope to make a profit in some time. Should I pursue mutual funds? My 401k has been pretty even-keel (little up/little down) so I dont see the point in that. And also, should I consult with a live broker ie would it be worth paying the commission? I appreciate any advice you can provide, thanks!

note: I plan to invest another $500-$1000 each month thereafter.

Answer 1

Stocks can offer the possibility of high returns, but it could be risky.  If you want to play it safer, I think mutual funds would be a good choice.  Mutual funds are collections of stocks and bonds so they are diversified and thus, less risky.  In addition, mutual funds are great for beginners because they are professionally managed so you don't have to worry about trying to decide what stocks or bond to invest in.  You can learn a lot of information about investing from this website: http://www.investopedia.com/.

Whatever you choose, you will need to open a brokerage firm.  Full-service brokers will sit down and talk to you.  They will advise you and provide guidance.  On the other hand, there are discount brokers, who will only do what you tell them to do.  I prefer them though because they are much cheaper than full-service ones.

I currently use Firstrade ( http://www.firstrade.com/ ).  They are cheaper than the big name discount brokers like Etrade, Scottrade, Ameritrade, and Schwab.  However, they still offer great service and I have been very satisfied with them.  I would definitely recommend you to check them out.

Answer 2

I recommend an online brokerage firm that has good beginner qualitys {like tutorials or an easy to understand set up}, i use zecco, 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!

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

Answer 3

There are several online brokers that you can look into.  Some will even recommend you a package which fits your budget & the level of risk you are willing to take.  To do this, they will ask a series of questions.

To find out more relevant info on investing, check this out: http://www.investmentpaysoff.com

Answer 4

I think you should invest in ETFs. You can invest in ETFs that track down indexes such as dow jones, S&P 500. They are diversified, so you don't have to manage your portfolio. The price for those ETFs are quite low right now. Over few years, you should gain a decent return. Also, the transaction cost is lower for ETFs than mutual funds.