Is this a good strategy? Would you do this with your money? I'm hoping the risks are worth the rewards. This 9k is mostly insurance money so if I have it in stocks hopefully I will forget about it. I can continue building our regular emergency fund at Bank of America and hopefully bring that to $10,000 by 2010.
Also any broker recommendations? Scottrade seems to be the best. I also have an account with E*Trade but I've heard so many horror stories that I don't think I want to deal with them. I have no experience with ING Sharebuilder but their costs seem low.
Any thoughts?
HS
Also any broker recommendations? Scottrade seems to be the best. I also have an account with E*Trade but I've heard so many horror stories that I don't think I want to deal with them. I have no experience with ING Sharebuilder but their costs seem low.
Any thoughts?
HS
9 comments:
I don't own any single stock just because of how volatile they have become. Things were going so well at Enron, WorldCom, Tyco....AIG? When it comes to investing money, there are certain rules. If you need access to the money within 5 years, that's savings. If it's beyond 5 years you're officially investing. Now if I don't need the money for less than 5 years, why should I put such high risk on it when I'm in it for the long haul? I always look for mutual funds with a long term rate of return in the teens or better.
Let's face it, the market is down right now and will go back up, but it will also go back down later. If you want to try to time when to get in and out of the market, via single stock, that's your call. I plan to invest money in safe investments regardless of what the market is doing. Last year I was down about 30% but this year I'm up 26% so just about to break even, and the market has not even got back to 10k yet.
Do you have a Roth IRA? I would look into establishing something like that so you can take advantage of the tax free growth while your income is still under the limit of $150-160k. I don’t recommend buying gold at all because the only ones making money at that are those who sell it.
I would not do this, the worst is yet to come for markets.
Are you sure this money is yours? You could be made to pay it back, with interest (and additional penalties, perhaps) if this is insurance fraud. I wouldn't rely on what one insurance agent told you. Make sure you have their policy in writing from a higher up.
Sorry, Me again. And I'm with Jim. Mutual funds, no individual stocks.
I wanted to do the same thing! I just took an investment class and the biggest lesson taught was DONT BUY INDIVIDUAL STOCKS! Over 90% of the time you will lose! Mutual funds are the way to go. Of course I learned this after I bought Pfizer among others (all down BIG). There were many reasons behind this and they all made sense. You have been warned....
I really think this is a bad idea. First, the percent the stocks are up does not sway me. Past performance is not an indicator of future performance. As others have said, if you are planning to do taxable investing you should do low cost mutual funds or EFTs from Vanguard, Fidelity, or T. Rowe Price. But it doesn't sound like you've exhausted your options for tax-deferred investing.
The first thing you should do is make sure you're at least getting all of the employer match for your 401k. After that you should strive for 15% of your income going to retirement in a mix of 401k and either IRA or RothIRA. It's only after you've gotten to that point that you should begin to consider taxable investing. After you have got a solid portfolio of low-cost mutual funds or EFTs (ex. Small Cap, Large Cap, Domestic, and International), only then should you think about investing in single stocks as "play money" (ie. money you are comfortable never seeing again).
Most importantly, you do not seem to have a proper emergency fund. From the amount you and your wife seem to spend every month, 10k would not get you very far if one of you lost your job or you had a significant home repair.
Please, Please, Please do not put this money into the stock market.
I would go with Scottrade. They have great rates and if you get over 25k in the acct the tools are amazing (you get elite access) pay a bit more and you can get better then real time for Nasdaq stocks...
I do about 50-300 trades a day with my scottrade acct. they rock.
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I would go with Scottrade. They have great rates and if you get over 25k in the acct the tools are amazing (you get elite access) pay a bit more and you can get better then real time for Nasdaq stocks...
I do about 50-300 trades a day with my scottrade acct. they rock.
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