What stocks to buy? How to research?

[Anonymous]

Thought I would get an early start on my resolutions and figure out how to invest in stocks. I inherited a small sum of money (8k) that I want to use to learn. Where do I start, wise DCUM?

[Anonymous]

just buy a low cost, broad market index. you will do better than about 80% of people in the stock market.

[Anonymous]

Anonymous wrote:just buy a low cost, broad market index. you will do better than about 80% of people in the stock market.

Sorry to sound like a fool, but I don't know what that means. Where can I read more about it?

[Anonymous]

google "boglehead forum" and start there.

you should probably buy a mutual fund from vanguard that tracks the stock market generally (e.g., their total stock market index or their s&P 500 index). you won't make insanely high returns, but over time you will likely do better than you would if you bought actively traded funds (where analysts try to pick stocks and time the market). whatever you do, don't get into buying individual stocks, at least not now. you will lose your ass.

[Anonymous]

VISA

[Anonymous]

Anonymous wrote:just buy a low cost, broad market index. you will do better than about 80% of people in the stock market.

more like better than 90% of the people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:just buy a low cost, broad market index. you will do better than about 80% of people in the stock market.

more like better than 90% of the people.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:just buy a low cost, broad market index. you will do better than about 80% of people in the stock market.

Sorry to sound like a fool, but I don't know what that means. Where can I read more about it?

you should read up at bogleheads, but the really simple version if you want to be in the stock market is just to buy the vanguard total stock market index.

[Anonymous]

Plz OP - I'm trying to be kind here but if you don't know what a low-cost index broad market fund is then you have zero business buying stock. That is a risky venture, best left for institutional investors, not Harriet Homemaker.

Get online with Vanguard or Fidelity. Research their funds. Funds are basically a bucket of stocks manage by the company and not by you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:just buy a low cost, broad market index. you will do better than about 80% of people in the stock market.

more like better than 90% of the people.

+1 Don't pick individual stocks or highly managed funds.

[Anonymous]

Bogleheads is a great resource. Be prepared though, if you want to ask a question in the forums you need to do your homework first. They will want to know about any current investments, income, debts, risk tolerance etc.

A simple 3-fund portfolio may work for you, giving you exposure not only to the U.S. stock market but to the international stock market and the bond market:

Vanguard Total Stock Market Index Fund (VTSMX)
Vanguard Total International Stock Index Fund (VGTSX)
Vanguard Total Bond Market Fund (VBMFX)

The percentage that you have invested in each would depend on your age, risk tolerance, and your asset allocation in any other investments. For a young person without many other investments you might do 50% U.S. stock, 20% international stock and 30% bonds. Then add to it regularly.

http://www.bogleheads.org/wiki/Three-fund_portfolio

[Anonymous]

We have done very well with the Vanguard total market index fund. Vanguard also has funds that are allocated between their mutual funds do that you are always a certain percent stocks vs bonds. Fees for those are slightly higher but still very low.

[Anonymous]

Anonymous wrote:Plz OP - I'm trying to be kind here but if you don't know what a low-cost index broad market fund is then you have zero business buying stock. That is a risky venture, best left for institutional investors, not Harriet Homemaker.

Get online with Vanguard or Fidelity. Research their funds. Funds are basically a bucket of stocks manage by the company and not by you.

OP, no offense taken but ya gotta start somewhere, no?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Plz OP - I'm trying to be kind here but if you don't know what a low-cost index broad market fund is then you have zero business buying stock. That is a risky venture, best left for institutional investors, not Harriet Homemaker.

Get online with Vanguard or Fidelity. Research their funds. Funds are basically a bucket of stocks manage by the company and not by you.

OP, no offense taken but ya gotta start somewhere, no?

Yes, and as PP pointed out, that somewhere is buying a fund from vanguard or fidelity (I would go with V, because their expenses are very low). That somewhere is not buying individual stocks. You might as well go to the casino and play blackjack (quite honestly, that also goes for many people who "know what they're doing," which is why I will probably never actively buy stocks and stick to index funds - nearly impossible to beat the market over a 30-year period.).

[Anonymous]

Put most of it in Vanguard; the rest, a small sum - maybe $500 put in Sharebuilder and do automatic investing with brands you like and actually use. That is a good way to start. I buy and hold - I don't generally buy things I don't believe in long-term.