What should a young guy like myself invest in?
Answers:
As a financial advisor, I love when young people are as proactive as you.
A Roth IRA is ideal for you. While there is no current tax deduction, the money gets to grow taxfree, and future "qualifed" distributions are tax free too!
Mutual funds are perfect for a Roth. Load or no-load, pick one or two funds to start. As you are only 22, you can afford to be more agressive. That said, be careful about chasing the hot sector of the day.
If you have any specific questions, feel free to email me.
Roth IRA invested through mutual funds. Call Smith Barney or a similiar type of company.
I recommend mutual funds that deal in energy and utilities. These are things that every business and household needs.
Check out a stock called Bank Rate Inc.
Have you considered investing in the stock market? you can go through Wells Fargo's it's called Share builders.com
this allows you to invest small amounts like the $100-150 a month for smaller fees of $4 for each purchase. However if you decide to sale any of your stocks they will hit you with fees as well. I would get on the web and really research it, and invest in well known companies. If you work with a well known company you may want to consider investing the funds in the 401-k plan because some companies match dollar for dollar up to a certain percentage of your income that you invest in your 401k to give you $300 invested instead of the $150..
Remember that if you have to draw the money out of an IRA, the government will penalize you approximately 40% in taxes.so if you have $1000 in IRA and something happens and you need the money now, you withdraw the funds called early distribution you will be penalized 40%= $400 on this, using your own money. This is setup to discourage people from early withdraw. Good concept until you need the funds in an emergency.
Hope that helps.
Mutual funds don't beat the market very often although an index fund matches the market so it's a better option. If you bought an exchange traded fund, you have more control because it trades like a stock but looks a lot like a fund. But keep in mind you are very young and can take on more risk. That means buying small company stocks. You can also buy stocks directly through some large companies with small amounts of money and avoid big fees, they are called No-Load stocks. The Roth IRA is a good option too.
Do you already have a house?
If you dont have time to manage your investments go with an index fund in a Roth.If you have time to track your investments daily pick 5 good value stocks and agressively invest in them, buy on all the unreasonable pullbacks in the market. Your likely to beat the professional mutual fund managers doing this and come out with a return much higher. Your young so Id be more aggressive.
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