Have $2500 to invest and have some questions

[gijoe9]

You are welcome Wilks glad you are getting your money's worth I am getting an education from this thread as well I think the key here so far is considering your costs as part of your investing strategy. If you can reduce the cost of investing below 2% you give yourself some advantage before you purchase. The fees on certain things are very high even some DRIPS have fees but management fees on mutual funds tend to upset me more than on ETF's. The ETF's tend to be more performance oriented and the Mutual Funds fees are there regardless of performance. I feel I can do better than most fund managers in particular mutual fund managers so I will avoid them like the plague unless there is a good advantage to me.
I had another thought about your cash and the SPY thing. Maybe you can use a series of laddered CD's to finance your purchases of SPY. Buy a cd with the cash you have and save cash for a year at the end of the year you buy 5k or so worth would not know iff there would be an advantage to it I am not from the US so do not understand how they work. Here we use a similar thing called GIC's and they can be purchased for as low as 1k for 30, 60, 90 days or more. My thought here is that as you are saving toward a yearly or every 6 months purchase all your money makes good interest while you wait.

[aquaswim47]

If you want to be in the market, I would follow GiJoe's advice but to finance the purchase with mutual funds. Your other option is to contribute $600 quarterly or $1,200 every six months which is hopefully equal to your initial investment. There are six funds I like (four within Scottrade): SSGA funds, Wilshire Funds, ValueLine Funds, or Pax Funds. I also like Fidelity Funds and Vanguard Funds directly. Vanguard is the only type of mutual fund that should be held long-term as the fees on the other five are higher than on most ETFs. The only reason to use mutual funds for the short-term is to avoid racking up excessive commissions on low amount purchases.

[aquaswim47]

Off course with Zecco, as long as you have at least $2,500, you can always invest in ETFs as you are allowed up to 40 free trades per month. Thus, you never have to pay higher expense ratios to avoid a commission again. That's assuming that the Zecco business model continues to work in which I hope it will since it is a big favor to the small investor.

[derrekmay]

my opinion is to choose different stocks(some with a good background, others with a little bit risk) adn then see how it goes.. and if some stocks just don't work don't keep them in your portfoilio but make some room for other stocks witch give a better return..

[aquaswim47]

While Zecco has eliminated their minimum balance requirement, I heard from another poster here that Zecco is having difficulty with withdrawals from the account. I'm curious and conducting my own experiment.

I heard that poster is all set now . I think Zecco is a great broker as I personally can trade stocks with them for $0.

[pbear]

Hi Brian,

I suggest you define your goals into short, medium and long term.

Once you have a written plan you can decide what might be best, as to where to begin.

However, if you are carrying debt .. as in credit card debt ..
the very first goal should be to pay that off .. not down .. off.
and any new balance must be paid in full monthly.

At 12% to 18% interest per year there is no better investment than getting rid of debt.
This includes keeping money in CD's, or a savings account at less than 2%.

Once that step is completed you can begin investing in the market.

Remember, it's not about making money, it's about keeping what you made.

Interest paid out is a silent account killer.

[derrekmay]

Originally Posted by pbear

Hi Brian,

I suggest you define your goals into short, medium and long term.

Once you have a written plan you can decide what might be best, as to where to begin.

However, if you are carrying debt .. as in credit card debt ..
the very first goal should be to pay that off .. not down .. off.
and any new balance must be paid in full monthly.

At 12% to 18% interest per year there is no better investment than getting rid of debt.
This includes keeping money in CD's, or a savings account at less than 2%.

Once that step is completed you can begin investing in the market.

Remember, it's not about making money, it's about keeping what you made.

Interest paid out is a silent account killer.

pbear is correct.
If you have debts, you will not trade with a logic mind..
The only thing you then want to achieve is to lose those debts as soon as possible, this can be a great motivation or bad motivation because you won't see mann good deals in the longer term.