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    Thread: Need Some Investing Advice

    1. Member
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      09-30-2012 04:13 PM #1
      Figured the active members in here usually can offer some good advice when it comes to money/investing and I'm in need of some direction on what to do with a decent chunk of change that I have inherited.

      Current Financial Situation:
      -20 years old
      -I'm in college and have a full tuition scholarship plus a fund setup by my parents that allows me not to have to worry about any other costs (room, board, books, etc.)
      -Don't work while in school, have a full-time job/internship in the summer.
      -Have roughly $3500 in a Vanguard mutual fund - (about 70% stocks, 30% bonds)
      -Currently have a savings account with $2k set aside. Checking account that has some spending $$ for daily expenses.
      -One low-limit credit card I use to basically build credit, pay off each month.
      -Car is payed off, parents cover the insurance (will continue to do so as long as I continue to take care of business in school).

      So here is where I need some advice. My grandma is getting older and thinks she is always having health concerns (which is another story in itself), but basically, being the only grandchild, she wants to pass along a portion of her recent property sale ($15k), to help support my future. Obviously, I'm planning on using the $$ as intended by putting towards my future beyond college, I don't plan on touching the majority of it for around 4-5 years. I'd prefer not to put all "my eggs in one basket," but I'm young and willing to take on some risk. So what options do I have?

      I plan on adding a portion to my current mutual fund balance. I've also considered some longer term CD's/bonds, stocks, and other mutual funds that may be slightly riskier than what I have now. But I'd like to hear about some other opinions.

      I appreciate the advice/tips in advance.

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      10-06-2012 07:47 PM #2
      Anybody? Advice?

      I've clearly ruled out investing in CD's due to the lack of interest rates, even for longer termed commitments.

      Considering the Vanguard Total Stock Market Fund (VTSMX) for a larger portion of the sum. Provides a mix of small, mid, and large cap stocks, slightly riskier than what I have current investments in, but has performed well over the last decade. Low expense ratio=lower fees. Appears to be the type of fund that would make sense for my situation.

    3. 10-06-2012 10:08 PM #3
      Quote Originally Posted by black_plague_21 View Post
      Anybody? Advice?

      I've clearly ruled out investing in CD's due to the lack of interest rates, even for longer termed commitments.

      Considering the Vanguard Total Stock Market Fund (VTSMX) for a larger portion of the sum. Provides a mix of small, mid, and large cap stocks, slightly riskier than what I have current investments in, but has performed well over the last decade. Low expense ratio=lower fees. Appears to be the type of fund that would make sense for my situation.
      If it were me, I would wait until after the election to make any 5 year long investments. If Romney wins, we are likely headed for war with Iran so oil, defense and related industries might be a good investment. Given that there aren't that many wonderful investments in this stagflating economy, the right perspective might be to limit risk until the economy indicates a direction.

    4. Member jnm2.0t's Avatar
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      10-07-2012 04:24 PM #4
      Quote Originally Posted by black_plague_21 View Post
      Figured the active members in here usually can offer some good advice when it comes to money/investing and I'm in need of some direction on what to do with a decent chunk of change that I have inherited.

      Current Financial Situation:
      -20 years old
      -I'm in college and have a full tuition scholarship plus a fund setup by my parents that allows me not to have to worry about any other costs (room, board, books, etc.)
      -Don't work while in school, have a full-time job/internship in the summer.
      -Have roughly $3500 in a Vanguard mutual fund - (about 70% stocks, 30% bonds)
      -Currently have a savings account with $2k set aside. Checking account that has some spending $$ for daily expenses.
      -One low-limit credit card I use to basically build credit, pay off each month.
      -Car is payed off, parents cover the insurance (will continue to do so as long as I continue to take care of business in school).

      So here is where I need some advice. My grandma is getting older and thinks she is always having health concerns (which is another story in itself), but basically, being the only grandchild, she wants to pass along a portion of her recent property sale ($15k), to help support my future. Obviously, I'm planning on using the $$ as intended by putting towards my future beyond college, I don't plan on touching the majority of it for around 4-5 years. I'd prefer not to put all "my eggs in one basket," but I'm young and willing to take on some risk. So what options do I have?

      I plan on adding a portion to my current mutual fund balance. I've also considered some longer term CD's/bonds, stocks, and other mutual funds that may be slightly riskier than what I have now. But I'd like to hear about some other opinions.

      I appreciate the advice/tips in advance.
      Well first option would be to tell grandma to hold onto the money for her seemingly present medical issues. But if the money is being forced on you and you don't really know what you are doing you should really be in mutual funds or ETFs.
      Take my fusion hybrid, please! Blue 2013 titanium package, goes to the first person that will take it for only what is owed. PM me if serious.

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      10-07-2012 05:44 PM #5
      Quote Originally Posted by jnm2.0t View Post
      Well first option would be to tell grandma to hold onto the money for her seemingly present medical issues. But if the money is being forced on you and you don't really know what you are doing you should really be in mutual funds or ETFs.
      Fortunately grandma has been reasonably smart financially and is a very selfless person, her medical expenses are not a concern unless something far worse becomes present.

      And that's the route I'm looking towards. I'm just trying to get research what options I have in order to properly diversify investments based on varying amounts of volatility and risk. Like I said, I've set a small amount of $ aside for potential emergencies but want to get the most of what I have been fortunate enough to receive. I don't plan on touching the majority of it until it becomes time for a new car, property, house purchase, etc.

      Can anyone explain the advantages/disadvantages of going with ETF's verse mutual funds? I've read up on them a bit but wouldn't mind seeing what you all have to say. Thanks.

    6. Member jnm2.0t's Avatar
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      10-07-2012 07:57 PM #6
      Quote Originally Posted by black_plague_21 View Post
      Fortunately grandma has been reasonably smart financially and is a very selfless person, her medical expenses are not a concern unless something far worse becomes present.

      And that's the route I'm looking towards. I'm just trying to get research what options I have in order to properly diversify investments based on varying amounts of volatility and risk. Like I said, I've set a small amount of $ aside for potential emergencies but want to get the most of what I have been fortunate enough to receive. I don't plan on touching the majority of it until it becomes time for a new car, property, house purchase, etc.

      Can anyone explain the advantages/disadvantages of going with ETF's verse mutual funds? I've read up on them a bit but wouldn't mind seeing what you all have to say. Thanks.
      You dont have enough money to diversify via individual assets, MF and ETF are your only shot at that.

      Mutual Funds are managed for which the firm charges a fee. Avoid loaded funds (i.e. class A, C) and go with no-load, plenty of great options out there with much lower fees. If you believe in active management and that the managers can add value then they are for you. If you don't believe the managers add any value beyond the fee then take an ETF. It is an asset that more or less tracks an index. By now they have ETFs that track just about anything you want i.e large cap, bond, international, gold, etc. Mutual Funds settle at the end of the day, place an order at 9am and it is bought or sold at whatever the closing price is which can be a good amount different than the current price, + or -. ETFs trade like stocks, whenever the order can be filled it is, no waiting until end of the day.
      Take my fusion hybrid, please! Blue 2013 titanium package, goes to the first person that will take it for only what is owed. PM me if serious.

      I'm just a regular Joe, with a regular job. I'm your average white, suburbanite slob.

    7. Member
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      10-07-2012 08:19 PM #7
      Quote Originally Posted by jnm2.0t View Post
      You dont have enough money to diversify via individual assets, MF and ETF are your only shot at that.

      Mutual Funds are managed for which the firm charges a fee. Avoid loaded funds (i.e. class A, C) and go with no-load, plenty of great options out there with much lower fees. If you believe in active management and that the managers can add value then they are for you. If you don't believe the managers add any value beyond the fee then take an ETF. It is an asset that more or less tracks an index. By now they have ETFs that track just about anything you want i.e large cap, bond, international, gold, etc. Mutual Funds settle at the end of the day, place an order at 9am and it is bought or sold at whatever the closing price is which can be a good amount different than the current price, + or -. ETFs trade like stocks, whenever the order can be filled it is, no waiting until end of the day.
      Appreciate the insight, definitely helps to clarify things a bit. I'll continue to research things and see what's out there. I'm sure I'll find the right type of fund that appeals to my financial vision for the future. Thanks.

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      10-08-2012 03:59 PM #8
      ive been doing ok over the last year or year and a half or so, with some of the mREIT stocks out there... AGNC, NLY (not as much lately, slowly selling that off), IVR and ARR...

      that bubble will likely be popping, and buying in before the election may not be the best bet, but maybe something else to consider if youre feeling more risky...

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      10-08-2012 07:19 PM #9
      I would just stick it in a savings account or CD and not worry about it. What are you future plans? To buy a house? Move out to an apartment after school?
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    10. 10-08-2012 09:36 PM #10
      Quote Originally Posted by jnm2.0t View Post
      You dont have enough money to diversify via individual assets, MF and ETF are your only shot at that.
      You have to be careful with some ETFs for long term investing. USO returned 4.5% in the past year while crude is up nearly 17%. Contango can also kill you. There is more to them than simply mirroring what the underlying asset is doing.

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      10-10-2012 03:19 PM #11
      Low cost Index funds.
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      10-10-2012 03:28 PM #12
      Quote Originally Posted by Mtl-Marc View Post
      Low cost Index funds.
      Because you don't have time to manage it and you don't need somebody else to eat away at your gains, index funds for now. Move into something else later on if/when you want to manage it more.
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      10-11-2012 12:54 AM #13
      Quote Originally Posted by AJB View Post
      I would just stick it in a savings account or CD and not worry about it. What are you future plans? To buy a house? Move out to an apartment after school?
      I just have a tough time going with a savings account or CD due to the low returns when I know I could be managing my finances in a more productive manner. Having money sitting around in an account like that may even make it tempting to spend on unnecessary items.

      After school, I will be interested in purchasing some type of residency once I've established my career. But that won't be for 3-5 years and therefore, I have time to allocate money into funds that can acquire long-term growth.

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      10-11-2012 12:57 AM #14
      Quote Originally Posted by maskedSONY View Post
      Because you don't have time to manage it and you don't need somebody else to eat away at your gains, index funds for now. Move into something else later on if/when you want to manage it more.
      Haven't looked into index funds extensively but they definitely appeal to the type of investing I'd be interested in. Ill continue to weigh my options out a bit and develop a plan before acting upon it.

      I appreciate all the advice, btw. Good stuff.

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