In this difficult financial time I have wanted to start investing in stocks. I'm 45, and I have a 401K from my previous employer, a ROTH that I'm maxing out each year and I invest with my current employer at the maximum amount allowable. I have an emergency fund saved that is over 10% my annual salary. Like most people, I've had losses that I've never seen before and hope to never see again. I don't think I should move my retirement money for fear of loser when everything rebounds.Are stocks the right thing right now? Any suggestions on choosing an online brokerage account? Should I choose mutual funds instead? Need some other opinions.
Anytime is right to invest. Prices are low now, but could get lower. I would start with a index fund if you are a beginner. Stocks are tricky if you do not know what you are doing and you really need to keep a close eye on them.Others will chime in now.
Are stocks the right thing right now? No one really knows the answer to that for sure. But in the long run, stocks ARE the right thing.You could expect to live another 40 years, so you need the inflation protection stocks (usually) provide. Any suggestions on choosing an online brokerage account? Should I choose mutual funds instead? For an IRA or other tax free account: FolioFN. They offer automatic dividend reinvestment, which can make a lot of small transactions to deal with at tax time. They do provide a qif file however which tax programs can read.For a taxable account: thinkorswim. 100-share transactions are only $5. They are very option-oriented, but they'll be happy to accept your stock order. You can buy/sell mutual funds there. Probably best if you call to see if they'll trade the ones you want. Better than dealing with all the paperwork for a direct.buy.
...Need some other opinions...The best beginning investment book that I have read is “The Bogelheads Guide to Investing” Check out the reviews at Amazon.http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Lari......Should I choose mutual funds instead?...Most actively managed mutual funds can’t beat index funds after expenses and they have managers with advanced financial degrees from the top universities, decades of experience, top notch staff, at least 40 hours a week to work on managing the mutual fund, computer systems that you can only dream of, and have trading costs a lot lower than yours due to their volume. You have a few advantages in stock picking because you don’t have to follow all the same rules but it probably isn’t realistic to expect to be able to outperform either the actively managed mutual funds or the index funds over the long term.This is your retirement money you are dealing with. Stick with low cost index funds for the bulk of your money; they outperform the majority of actively managed funds over the long term. If you have some “extra” money that is not critical to your retirement then you can try buying individual stocks with it. Greg
Couldn't have said it better.
Some research for you: what categories are the previous 401K, ROTH, current ER plan monies invested in?Personally, I have a pension plan and have directed my money there to an index fund and a bond fund.Do you want to consider funds that are invested in specific sectors? With my philosophy of life, I decided to disinvest myself of EXXON and keep some percentage of my money in a fund focused on alternatives to petroleum (NEW ALTERNATIVES). Yes, this means I am not aiming for maxiumum income at the moment.
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