Until you get a larger stake, say $50k, I would concentrate on index funds. The one fund I'd put things in, Vanguard Total Stock Market Index fund. Until you get your larger stake, use the time to build up your knowledge.

JLC

I would ammend that to the Vanguard Extended Market Index Fund. For a young person the smaller companies should offer better return. Here's a plot which illustrates something:


http://quotes.fool.com/custom/fool/html-chart.asp?osymb=vigrx&osymbols=vigrx&symbols=vigrx&currticker=VIGRX&time=5yr&uf=0&compidx=sp500%7E3377&ma=0&symb=vigrx&freq=1dy&lf=1&comp=vivax+visgx+visvx&type=128&sid=9766

If you plot the large cap value, large cap growth, the small cap value, and small cap growth, you can see a value bias and the size bias. A young person has time on his side. The chart shows that the marketplace values smaller companies and value companies (Low book-to-price) more than large growth companies. That said, I would steer clear of small value stocks until I had a sizeable holding of more conservative funds.

I like Rex Sinquefield's explanation.

http://library.dfaus.com/reprints/interview_sinquefield_tanous/

cliff