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I don't anything about investing. I just need to start this now, not sure where go. My bank, or call a company like Hartford or Fidelity. Any recommendations?
Fidelity and Vanguard have low cost mutual funds available for IRAs. I'd start with either, investing in a total market equity fund, total market bond fund and maybe an international fund. The mix dependent on your risk level. Auto re-invest the interest and dividends. Once you feel more comfortable, you can see about expanding your choices. Banks will likely sell you CDs and charge you a lot for other investments.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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I second Vanguard (tho I have several accts with Fidelity too, and no problem with them, either.)
I think Vanguard has the best products (and educational stuff) for lowest cost and not a herd of salesmen to confuse you. Bogleheads.org is a good forum to get info on this.
For an amateur, take the route above; (total market + international and some bond holdings (as you age)).
When / if you get to trading, then you will want a DISCOUNT brokerage acct and use EFTs (they are similar to Mutual funds, but are 'traded', so you can get out mid-day, short and cover, and use options). ALWAYS check the holdings of an ETF AND buy ones with high volumes of share activity (ez'r to unload on a bad day).
Vanguard and Fidelity brokerage services are pretty high cost for a 'smaller' investor (under $500k in tradeable assets). Their no-load-mutual funds are good.
Get a 3rd party opinion of funds on Morningstar, Motley Fool, IBD. Use ETF sites for training there. (Yahoo Finance etf site, or etf connect, etf newsletter...)
Don't make it complicated. Systematic and consistent, just like 'The Wealthy Barber' recommends.
I don't anything about investing. I just need to start this now, not sure where go. My bank, or call a company like Hartford or Fidelity. Any recommendations?
The key points being don't know anything and right now. I suggest you open a CD ladder with a good credit union or bank to start your safe portion of investing. Open a 1 yr, 2 yr, 3 yr, 4 yr, 5yr CD dividing what you can contribute this year.
If you decide to keep this portion going, the gambit is to buy a 5 yr cd each time one of them matures. That way, when interest rates rise, some of the money will be able to earn the higher rates. When they fall, some of the money will still be earning the higher rates.
It will be completely safe insured up to $250,000. You'll get a range of interest rates with the opportunity next year of possibly getting higher rates for the 1yr cd or rolling it over to something else.
The problem with jumping into the other options offered, is that you don't understand what you are investing in - the number one wrong thing to do is to not understand your investment. That is essentially how Bernie Madoff conned all those people.
Then spend this next year studying investment options and differing opinions and outcomes. Determine what your risk tolerance is. Next year, you will be in a better position to make an informed decision about the kinds of investments that are right for you. You have the opportunity to invest both 2009 IRA and 2010 IRA in short order.
Consider a Roth IRA - your earnings will never be taxed but you do not get a tax deduction this year. Traditional IRAs are only deductible if your income is fairly low.
to tell you the truth if it was me and if i hardly had any knowledge of financial products or i didnt want to be bothered thinking about things myself this is what i would do..
i would open an account at fidelity and i would subscribe for 100 bucks a year to a newsletter like either fidelity insight or fidelity monitor .. these are independent newsletters not related to fidelity in any way. they only take an interest in knowing their funds inside and out.
you can pick a model portfolio based on your risk level and just buy the funds on your own that make up that model.... every friday they e-mail you an update of the market and if they are recommending any changes in your portfolio.
i have been using fidelity insight for over 20 years....
what i like about following their lead even though im very capable of putting together model portfolios in my sleep is the following.
first off they know the fidelity funds inside and out. you can buy an assortment of funds from the same fund family and end up with duplicate stock holdings in the funds all over.
they are up on all manager changes and let you know whether to stay or go
most important and this was priceless... as experienced and well seasoned investor as i am, there hand holding and forcing me to stay the course in plunging markets was priceless... having someone call the shots when our emotions get in the way is a major plus.
thru crashes, thru wars , recessions etc over the last 20 years i never had to ponder what to do and emotionally do the wrong thing... sometimes the more knowledge we have the more tempted we are to time things or beat the markets by darting out before the big crash and buying back in at the lows ... all a fantasy for most of us in trying to do this more than 2x in a row.
soooooo thats what i would do and thats what i still do.. i prefer fidelity insight myself but you will do equally well with fidelity monitor too
Last edited by mathjak107; 12-17-2009 at 05:09 PM..
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,690 posts, read 57,994,855 times
Reputation: 46171
Quote:
Originally Posted by CA central coast
Does anyone recommend a financial planner or just call Vanguard or Fidelity directly?
Probably the most significant missing info is:
1) your age (determines your risk level + financial performance needs)
2) and your level of interest in learning to be your own Financial manager.
That said... No one cares as much about KEEPING your money as you do. Financial advisers are very interested in keeping a decent cash flow from YOUR money, and thus their interest is in SPENDING you money.
There are lots of ways to learn, it is not at all complicated for the first few yrs, especially if a long ways from retirement.
It can be quite complicated if you listen to too many sources and get spread too thin. Research and find a decent plan, then stick with it and get some mentors who share your values.
There are some very simple training tools and the Fidelity info listed above will cover a lot of your questions. Vanguard has similar stuff, But I would not use financial advisers from these firms, I like independent perspectives AND many 'advisers' at these companies are younger than my kids
The key points being don't know anything and right now. I suggest you open a CD ladder with a good credit union or bank to start your safe portion of investing. Open a 1 yr, 2 yr, 3 yr, 4 yr, 5yr CD dividing what you can contribute this year.
If you decide to keep this portion going, the gambit is to buy a 5 yr cd each time one of them matures. That way, when interest rates rise, some of the money will be able to earn the higher rates. When they fall, some of the money will still be earning the higher rates.
It will be completely safe insured up to $250,000. You'll get a range of interest rates with the opportunity next year of possibly getting higher rates for the 1yr cd or rolling it over to something else.
The problem with jumping into the other options offered, is that you don't understand what you are investing in - the number one wrong thing to do is to not understand your investment. That is essentially how Bernie Madoff conned all those people.
Then spend this next year studying investment options and differing opinions and outcomes. Determine what your risk tolerance is. Next year, you will be in a better position to make an informed decision about the kinds of investments that are right for you. You have the opportunity to invest both 2009 IRA and 2010 IRA in short order.
Consider a Roth IRA - your earnings will never be taxed but you do not get a tax deduction this year. Traditional IRAs are only deductible if your income is fairly low.
I was thinking the OP was someone just starting out with decades to invest. If so, than a CD ladder is not needed until the last decade before retirement. I'm also thinking the OP can take a little more risk early on.
I agree that a CD ladder should be set up in the last decade, but depending on the OP's other income sources, the amounts won't be known.
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