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Old 03-01-2015, 03:03 AM
 
Location: Dallas
1,006 posts, read 729,474 times
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Lets say you're in your early 30's, single. Extremely small mortgage due to putting 20% down and you have around 2k to "play with" each month. How do you invest, high risk or low. High interest savings or stocks?
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Old 03-01-2015, 03:08 AM
 
24,324 posts, read 26,712,807 times
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That depends on you... some people are willing to take high risk in return for high gains, while others are the complete opposite.

If you want to actively trade, you need to learn "technical analysis" if you don't want to put much time into it, then go with an ETF that tracks the market such as SPY or VTI. These are relatively safe as long as you don't have to sell. If you want to take it a step further, you can buy a balanced mutual fund that is maybe 60-70% stocks, 30-40% bonds.
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Old 03-01-2015, 03:30 AM
 
Location: Dallas
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Lets say high risk is ok, no kids no wife and the chances of your disposable income increasing year on end is almost a positive.
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Old 03-01-2015, 04:58 AM
 
Location: Los Angeles
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VOO - the S&P 500 index. Done.
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Old 03-01-2015, 06:08 AM
 
Location: Dallas
1,006 posts, read 729,474 times
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Originally Posted by Big-Bucks View Post
VOO - the S&P 500 index. Done.
Gracias sir. I imagine this can be accomplished through a Merrill Lynch brokerage account?
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Old 03-01-2015, 06:22 AM
 
105,720 posts, read 107,700,939 times
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if you feel a little more aggressive i would go mid caps for now and forget the s&p 500 for a while.

every single time we had it play out like last year where the s&p 500 got all the attention it has taken 5 years at the least of under performance by the s&p 500 to unwind.

the best value is in the mid caps. so far ytd they have returned almost 66% more than what the s&p 500 did the first two months of the year.

nothing is guaranteed but if i was looking to buy just one fund it would be mid cap today
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Old 03-01-2015, 07:44 AM
 
9,639 posts, read 5,974,714 times
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Originally Posted by ayahuasca_mike View Post
Gracias sir. I imagine this can be accomplished through a Merrill Lynch brokerage account?
I'd go with Fidelity, Vanguard, or Schwab. Merrill Lynch will just cost you extra money.
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Old 03-01-2015, 08:36 AM
 
Location: South Florida
233 posts, read 228,670 times
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Originally Posted by mathjak107 View Post
if you feel a little more aggressive i would go mid caps for now and forget the s&p 500 for a while.

every single time we had it play out like last year where the s&p 500 got all the attention it has taken 5 years at the least of under performance by the s&p 500 to unwind.

the best value is in the mid caps. so far ytd they have returned almost 66% more than what the s&p 500 did the first two months of the year.

nothing is guaranteed but if i was looking to buy just one fund it would be mid cap today
I agree with this. If I want to get exposure to the US market, and my investment horizon is fairly long, then I would put it in the Mid Cap fund.

The MidCap 400 index for the last 15 to 20 years (average annual return calculated on accumulated wealth) has beaten S&P 500 index by a good margin.

There are a couple of theories out there, one that the MidCap space tends to be neglected by investors thus relatively undervalued (vis-a-vis S&P 500). My own theory is that MidCap 400 index companies tend to be ones that are small enough to grow faster than the S&P 500 companies, but with solid proven business model in their niche markets. These are prime take over targets for the big S&P 500 companies, looking to grow their portfolio of business (one of the favorite growth strategies of large cap companies is to acquire faster growing smaller companies, and run these as wholly-owned subsidiaries), and to their ROE/ROA, as these smaller MidCap firms tend to have higher ROE/ROA.
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Old 03-01-2015, 08:44 AM
 
105,720 posts, read 107,700,939 times
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there is likely another reason and i posted it many times.


what is interesting is dividends have increased to the highest levels since 1998 with a record increase of 17.8 billion dollars in increased dividends payed out just 1st quarter. the 2nd quarter may be even bigger.

all dow stocks pay dividends and 84% of the s&p 500 does too.

but according to a study done by howard silverblatt at s&p those dividends have been coming at a price as they go up and up..

a good part of that capital from free cash flow is gone forever and no longer available for compounding.

mid-caps and small caps who pay little in dividends have been far and away providing far better compounding and use of investor money for much greater returns..

in fact one of the least efficiant ways to grow investor money now is paying it out as a dividend.

as chuck akre said ,free cash flow in a company can be used to compound by buying back its own stock, investing in its own company or buying other companies . cash flow paid out as dividends loses its compounding ability and much of it is gone forever and can no longer compound.

many of the great companies in the s&p 500 have lagged behind their non dividend payers in the midcap and small cap markets who now seem to be much more efficient at generating compounding on investor money.

midcaps and small caps have compounded the last 5 years at rate of 5-6% higher then their dividend paying larger cousins.

the exception was 2014 when nothing mattered except the s&p 500 and historically that always came at a price when it happens as the s&p tends to underperform to get things back in alignment again.

Last edited by mathjak107; 03-01-2015 at 09:11 AM..
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Old 03-01-2015, 11:18 AM
MJ7
 
6,221 posts, read 10,681,652 times
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If you go manual mode and invest yourself, get educated first. If you go in blind you will lose.
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