Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Young Investors
Old 03-27-2006, 08:58 AM   #1
Recycles dryer sheets
 
Join Date: Dec 2004
Posts: 273
Young Investors

Our daughter, who will be married shortly, has an IRA and Roth, both in foreign funds (Scudder) and both of which have performed well (about $8k and about 9% annulized).

When they get married (they are both still in college) and begin investing, what are some suggestions for diversification using VG. I say VG because I believe that if I can get them steered the right direction they will not fall into the friends, broker, heard it on the tv investing trap.

Already, FSIL said he was thinking of buying some WMT stock and I had to put some brakes on that and fill his head with diversification thoughts. My suggestion was to DCA about $50/mo into a diversified fund. They don't know it yet but I will be providing this boost to get their life started.

Any thoughts?
__________________

__________________
time flies like an arrow, fruit flies like a banana
larry is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Young Investors
Old 03-27-2006, 09:35 AM   #2
Thinks s/he gets paid by the post
JPatrick's Avatar
 
Join Date: Jun 2005
Posts: 2,494
Re: Young Investors

There are many index portfolios floating about, some being; Coffee House, Margarita, CouchPotato, to name a few.* Lots of info if you google these.
A good read is Paul Merriman's "Live it up without outliving your money."* He lays out many portfolios, some using VG exclusively.
Index portfolios are touted as the "set it and forget it" solution, but they too, need rebalancing to stay in tune with current market conditions.
Live style/target retirement funds are also a possibility.* More of a set and forget, and they have gotten much better over the past few years.
__________________

__________________
JPatrick is offline   Reply With Quote
Re: Young Investors
Old 03-27-2006, 09:41 AM   #3
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,618
Re: Young Investors

Give 'em a Bogle book, send them over to the Vanguard Diehards discussion board, let them teach themselves, and back slowly away with your hands in the air.

We can step in many times with our years of accumulated wisdom, but new investors also need to learn to do this for themselves. Wal-Mart is not such a bad stock to begin learning the risks & rewards of investing and it might actually be selling at a discount. Humberto Cruz & Charles Carlson made their ER portfolios from individual stocks and it can still be done that way. It's a lot more work but maybe it's the way they've decided to go.

They'll learn much more quickly from a $1000 loss than from anything we old pharts have to say.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is online now   Reply With Quote
Re: Young Investors
Old 03-27-2006, 09:58 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
Re: Young Investors

If they have to start out small, Vanguard STAR would appear to be the best (only) fund available until it gets built up over time (a few years). After that, or now if she has enough to meet the mininum, I would recommend that she look at the Life-Cycle series of fund-of-funds. They are cost effective and give you instant diversification. As time permits she can slice and dice as she feels necessary or can ride the L-C fund all the way to the end.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is online now   Reply With Quote
Re: Young Investors
Old 03-27-2006, 10:20 AM   #5
Recycles dryer sheets
 
Join Date: Feb 2006
Posts: 403
Re: Young Investors

Personally, I had more fun investing in individual stocks than in funds or indexes, which in turn encouraged me to save more (to have more to invest). Now it's either (a) go on vacation or (b) pick up 100 more shares of that company I have been watching. This might come back to burn me but I don't have more than 15% in any one company and so far so good.
__________________
macdaddy is offline   Reply With Quote
Re: Young Investors
Old 03-27-2006, 11:52 AM   #6
Recycles dryer sheets
 
Join Date: Dec 2004
Posts: 273
Re: Young Investors

Quote:
Originally Posted by Nords
Give 'em a Bogle book, send them over to the Vanguard Diehards discussion board, let them teach themselves, and back slowly away with your hands in the air.

We can step in many times with our years of accumulated wisdom, but new investors also need to learn to do this for themselves.
They'll learn much more quickly from a $1000 loss than from anything we old pharts have to say.
How about my personal bible, Making the Most of Your Money by Jane Bryant Quinn?

I think you are right to back away and let them make their own mistakes, that is one of the hardest things to do for me as a parent but I agree that is probably best in this situation. What do they say about the school of hard knocks, it's where you pay for your lessons before you're even granted admission?
__________________
time flies like an arrow, fruit flies like a banana
larry is offline   Reply With Quote
Re: Young Investors
Old 03-27-2006, 12:05 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Young Investors

wmt does seem cheap though. Saw the stock sign in the front of sams club yesterday...48 or something like that. Wasnt it 56 just a couple of years ago?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Young Investors
Old 03-27-2006, 12:07 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Young Investors

Quote:
Originally Posted by Senior Cute 'n' Fuzzy Bunny
wmt does seem cheap though.* Saw the stock sign in the front of sams club yesterday...48 or something like that.* Wasnt it 56 just a couple of years ago?
Eh, hard to get excited about WMT. They have succeeded in drawing so much ire that I think they will be the target of local, state and national attacks for years to come. You should see all the brouhaha over their application for a bank charter...
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Young Investors
Old 03-27-2006, 12:35 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Young Investors

They seem to be doing things to try to mitigate the negative press. See any of the stuff they're doing with organics and fisheries? Not raiding the existing organic farms and the existing fisheries and wiping out the supply, but buying defunct or down on their luck businesses and rebuilding them and increasing their capacity.

All arguable stuff, to be sure, but from a PR perspective, I see a trend to heal their image.

Worlds largest retailer. Still though, its not cheap. Just hasnt gone anywhere in a while. Hard to say where the next move is towards.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Young Investors
Old 03-27-2006, 12:38 PM   #10
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,618
Re: Young Investors

Quote:
Originally Posted by Senior Cute 'n' Fuzzy Bunny
wmt does seem cheap though.* Saw the stock sign in the front of sams club yesterday...48 or something like that.* Wasnt it 56 just a couple of years ago?
You should see the stock sign at Costco, if they even bother with one.

Wal-Mart & Costco started at opposite ends of the stock-price spectrum and have switched places. It'll be interesting to see what happens if the world's largest retailer starts treating its employees like Costco, and if WMT can attract board members like Charlie Munger.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is online now   Reply With Quote
Re: Young Investors
Old 03-27-2006, 12:43 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Young Investors

My old megacorp used to have a stock price sign out front. When the stock was down, they put out a bigger sign.

I'm still noodling over whether that was a good idea or not.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Young Investors
Old 03-27-2006, 12:45 PM   #12
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,618
Re: Young Investors

Quote:
Originally Posted by Senior Cute 'n' Fuzzy Bunny
My old megacorp used to have a stock price sign out front.* When the stock was down, they put out a bigger sign.
I've been watching INTC's stock price for the last couple months, and that sign must be huge...

Aren't they having a fire sale? Why is everyone running away screaming?
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is online now   Reply With Quote
Re: Young Investors
Old 03-27-2006, 06:07 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Young Investors

Used to drive Grove crazy. Even during the late 90's the stock was just sitting with a PE in the 30's. He used to complain "We've got the E...where the hell is the P?!?" I so wanted to tell him...

They're probably painting the stock price on the parking lot.

Certainly a very efficient manufacturer with much better new management...
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Advice for VERY Young Dreamers (16-21) BigMoneyJim Young Dreamers 40 12-11-2007 12:06 AM
Investors' actual returns versus total returns JohnEyles FIRE and Money 0 11-14-2006 01:20 AM
Greenspan Chides Investors mikew FIRE and Money 0 08-27-2005 07:56 AM
Young Workers Not Saving Article Mountain_Mike FIRE and Money 59 07-12-2005 01:02 PM
Welcome Young Dreamers! BigMoneyJim Young Dreamers 56 04-06-2004 12:39 PM

 

 
All times are GMT -6. The time now is 01:07 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.