0 Spend

Mutual funds, diversify the types you have. Don’t put ‘all your eggs’ in one basket in either individual stocks- spread the risk with mutual funds. At your age, you can easily have 20% in foreign funds, 80% in domestic funds. Check out websites like Fidelity, Vanguard, Tdameritrade…and watch those FEES, try to stick to no-load funds.
References :

if you are working and making money, best investment is roth ira, you never pay taxes on your gains, even when you are old enough to use your money, and you can at any time with no penalty take out your contributions. if you are not working a taxable mutual fund is the next best. if you want to learn about investing without risking any of your money go to top10traders.com and sign up, it is free and a good way to learn about investing
References :

You should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://flagship.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)
References :

magy is exactly correct…a basket of no load mutual funds. if you don’t have enough money to open a brokerage account, there are several funds family’s that will let you open accounts for as little as $500. http://www.excelsiorfunds.com is one I know off hand.

The most important thing is to start.

You can find fund ideas in a lot of places; however, morningstar.com is widely considered the best place for the general public to research funds.
References :

Consider your investing objectives first, and then be sure to factor in taxes.

If you are investing for the long term, to accumulate wealth, you can look at the stock market for moderate risk, assuming you have a few years advance notice before you need to move your money out of the market. I would start with an indexed fun, something based on the S&P 500 and put money in the fund on a regular basis. Make a habit of living without that money, as if you never made it. When your investment needs begin to change from building wealth to perhaps generating income, look for a point in the market where the price of the fund is reasonably high and the cost of the bonds or other instruments you’ll be moving to are low enough. And be sure to calculate the taxes you will owe before you trade!!

When you complete your MBA and get a high paying job, consider the tax advantages to some alternative investments as well. If you are handy and ambitious, a couple of rental properties can really drop your income taxes and give you strong equity appreciation at the same time. Don’t forget that depreciation must be repaid in captial gains when you eventually sell unless you exchange for other like kind property. But avoid rental properties if you are not willing to do some of the work yourself. Once you pay professional property managers, carpenters, plumbers and painters, you might as well just have bought some municipal bonds. 🙂

Then, watch the industries where you have more information than the average investor, some reason to think that you have a better feel for the value of a company or an idea or product than the broad market would have. Then dip your toe in the water from time to time buying an individual stock and see if you have a knack for it.

Read whatever you can find from proven investors like Buffett, and see if any of his insights ring true for you and if your temperment and interests allow you to follow some of his advice.

Best wishes.
References :

Do you already have a house?
References :

I would recommend you start building a nest egg that is 100% not at risk. Try to build to a few grand or so before taking the market. Ya, you could make an extra 5%, but if you tied in the trading fees and such stock just don’t pay of in my opinion. I would target something like $5,000 in an ING direct or similar savings accoutn paying 5%. Once you meet this get into a direct savings plan for a index mutual fund where you automatically invest 100 or so dollars a month.
References :