Investment Advice

To save for college, a 529 plan is the way to go. You put money into the 529 and you get tax breaks. The investment grows tax-deffered, and the distributions are tax free.

 

A Roth IRA is good.

Call Fidelity and get hooked up with their Active Trader Pro too.

They are a bit more expensive than ETRADE and the others,but in the long run you'll be happy to be with them.

I had someone try to break into my brokerage account a long time ago.Fidelity froze the account and it was handled.If there are problems which arise they will help knock them out...albeit sometimes with a little pushing.Also,you can have the commisions cut down at times,so don't settle if you feel like your getting jobbed.

OMT....Sometimes you run into investments which might call for certain services and such where you might run into problems with other firms...not Fidelity for the most part.

Fidelity = someone you want to be with for a long time.

And remember that brokerage firms want to make their commisions so don't always think they have your best interests at heart.I made that mistake early on.

One last thing and I've said it before......Set up two bank accounts at several banks.As you take profits,put what you take out in one and the appropriate amount for taxes in the other.Don't touch that tax account.

 

529s usually have a "target date" fund option, where the fund will basically managed the risk to be in line with the target date of your kid starting college.

For your retirement, Roth IRAs are a really good deal. Target Date Retirement funds are also the best option for a newbie (as well as for someone who does not wnat to actively manage their account).

I also recommend Fidelity. They have reasonable prices and online trading. They also may offices in many cities, if you need face time to sort something out.

 

Open a Vanguard account, buy one of their 'Fund of Funds' that suits you and put in what you can when you can.

If you are not a savy investor, you just want to get the most diversification you can get for the lowest cost.

Seriously though, I wouldn't look at investing in the stock market at all with a the threat of a recession ahead. Just stay in short term cash like CD's for a while and see how things shake out. A drop of 30% in the overall market is very possible in the next 6 months. Why take that chance? If you are in cash and we do get a recessionary drop, you will be in a position to get in at the bottom.

For young people, you always hear "invest in equities because you are in it for the long haul". Well if you are in it for the long haul why rush into an iffy market?

Here, read this:
http://www.streettalklive.com/XFactor/012608-Defining-The-Bear.pdf

 

^for bargain hunting purposes!

In seriousness - E*Trade is great, convenient,easy to use, and offers you a great interest rate on their saving account (i believe 5.05%)......BUT their reckless corporate gamble in investing all their $$$ in CDOs has left the company in such dire financial straits to the point where my money may have to be recovered from SIPC or FDIC at some point. For that reason I would avoid them and investigate one of the other big online brokers like Schwab, Ameritrade, Scottrade etc.

 

Sam, Have you heard anything about optionsXpress? I just started the process of setting up an account there after some quick research. They seem to have a good reputation and don't require a minimum investment.

I already have a 403b account at TRowe through work and contribute to that regularly, but I just want to get set up to do som non-retirement investing to take advantage of the marke downturn.

 

you gots to diversify yo bonds

In all seriousness, I have an account with Vanguard and I'm very happy with their service. Not too happy with my recent losses, though

 

You have to know if you are a savy trader or a long haul investor.

There probably are some bargins right now for people who watch closely everyday and use moving stops and covered calls. In the article the Streettalk guys are looking for a retracement rally to about 12700 that might take four weeks.

But if you are a 'buy and hold' investor and the word RECESSION is in the news everyday, why would now be a time to marry equities. Sure you settle for a 5% rate of return but you take the risk of a 20% drop out of the equation. And making up losses is harder than making gains:

$100 down 10% is $90, $90 back up 10% is only $99, you are still down $1.

You might feel a little remorse if you only earn 5% and the market goes up 10%, but trust me, you will feel like total ***** if you see a 20% drop in your nestegg. I know, I've done it twice.

If the the markets have settled down in 6 months, you can always get back in..for the long haul.

 

hi Bobble,

Thanks to competition, you have many choices to choose from insofar as a brokerage account/custodian. To date, they have largely competed on some spectrum of "service" vs. "commission." On one side of the spectrum, you have the likes of an E-Trade or a TD Ameritrade who offer rock-bottom commission schedules but may offer little in the way of "service." And by service I don't mean simply "advice" but rather "assistance" in the way of customer service, support, and attentiveness. The flip side is that the folks with the highest level of service may be more than you really need. The who's who looks something like this. These folks are good should you have a bias toward either (1) owning "stocks" outright or (2) like the idea of a supermarket of mutual funds.

Name/Service/Commission/Branch Offices
ETrade Poor Lo No
ScottsTrade Poor Lo No
Ameritrade Poor Lo Some
Vanguard OK Lo No
Fidelity Poor Med No
Schwab Good Med Yes
Merrill Lynch High High Yes
*Lo is around $7 per 1000 share lot and High is over $20 per 1000 share lot

Now if you are the mutual fund type and have some mutual funds you are eyeing. i.e. a handful of funds you'd buy and forget. They it may actually pay to go straight to the mutual fund and open an account directly through them. Here, unlike the supermarket approach, it's like you signing up with the vendor itself - kind of like a mail order lifetime subscription to Coke if you like Coke that much. Here, your account statements will have the header of the mutual fund but will actually be processed by a 3rd party like State Street much like DRIP plans and 401K plans with corporations are processed by the likes of Compushare or some other 3rd party.

To start off, it might be easier to start off with Schwab b/c they have branch offices where you can talk to people and who will help make the transfer as painless as possible. I wouldn't go to any mainstream brokerages like Merrill b/c they are too expensive and probably not worth it at this stage.

On retirement and college savings, I concur with a previous poster about the 529 for college savings. For retirement, you can open a Roth IRA. However make sure you do NOT commingle your rollover monies from your 401K into a rollover IRA with new IRA monies! Trust me on this. It will save you loads of headaches in the future when it comes time to do tax accounting. Keeping new monies from old separate will help you establish basis and do the accounting a lot easier. While this will entail more organizational complexity insofar as having more statements to file, you'll have a less problematic time in the future unwinding assets should/when you choose to sell them. Same is true if you move from job to job.

That's my two cents.

Feel free to write me at my e-mail if you have any questions.

theSAGE
dleo@sagebrush-lp.com

 

Taxes are a mother****er yo. Move your money offshore to Switzerland or The Bahamas via EFT or speedboats.

Inflation is jackin' your purchasing power. Buy kilos of yayo to offset your losses. Drugs ain't in most people's basket indexes, but Ghostface ain't like most analysts neither.

The Wu's high risk mutual fund is upping its take of Hollywood Media Corporation (HOLL) and Netflix (NFLX) because they're what's next b****es, feel me?

Gold reached an 18-year high of $496.75 this week, making grillz a positive long term investment for many of our clients.

 

They're legit too. In fact, I'd probably place them above TD and ETrade. I can't speak directly to their service as neither I nor anyone I know use them, but by the looks of it, they are on the cheaper side of the commission equation - which is a good thing! No account minimums is the norm, so nothing new here. What I would do though Bobble is to check on their money market selection. For any idle cash you have, you will likely have them parked in and "swept" into a money market fund to earn higher interest. However, not all money markets are the same. And as the recent turmoil in the markets has brought to bear, some money markets who chased higher interest rates actually put their investors at risk. This actually happenned in, at all places, Fidelity.

Personally, I would avoid E-Trade in its entirety. They're cheap but they're not backed by a strong bank. Schwab is not a bad choice. And I think ING could be a good one too but I can't speak with 100% confidence on that.

My two cents.

theSAGE

 

I don't know anything about 'em or any other places, I'm lookng for a place to move my stuff so i will check them out.

I might be mistaken but I thought that some of the ING direct accounts were not FDIC insured - probably not an issue but something to consider.