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Where to start investing? I am 21 with over 20k in mutual funds and bonds.?

I am currently investing through my fathers FA, but I would like to be more involved. What types of investing should I consider and how would I start. What broker sites are good ? Any books that good out there that I can read up on? I am from Canada, I don't know how that might affect other things. Anyways, any help would be appreciated. Thanks

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  • 1 decade ago
    Favorite Answer

    you begin by learning.

    there is a lot to learn.

    fortunately, the early parts are free -- books at your public library.

    ***

    it is ok to read the American authors on the subject -- investing principles are the same almost everywhere because the economy wide return to added capital is positive in almost every country in the world [Singapore is the maybe exception and Chile is catching up to that point.]

    [positive return to added capital means that for the nation's economy as a whole more tools and properties will increase output beyond their cost, including the return on the capital used.]

    **

    while you're learning, continue to rely on your Father's advice -- he's done well for you so far.

    **

    after you've devoured three to four books on the subject, including both equity [stock] investments, bonds, and real estate it is time to begin learning seriously. [the three or four first books, in essence, teach you the language used.]

    **

    you'll want your own copy of "Trade Your Way to Financial Freedom" by Van Tharp, Ph.D. It is that important to anyone who invests or trades in an organized market [stocks, bonds, options, commodities, futures, etc.].

    {disclosure: I am a customer of Van's. I receive nothing for touting his book. The second edition is better than the first.}

    **

    You'll also want to visit a university library and read a few of the annual editions of "Stocks, Bonds, Bills, and Inflation" by Ibbotson Associates. Yes, they're Yanks and talking about American markets. Again, the principles involved are the same.

    the university will likely need to have either a business school or an economics school to have Ibbotson in its library. It probably does not circulate and you'll want to xerox about 20 pages or so from the most recent edition you can find [it comes out in April each year for the prior year] and maybe 10 or so from prior editions. {fortunately, the library catalogues of many universities are online and searchable over the web}

    GL

    Source(s): mba/cpa (Yank) and investor. Among other places, I invest in Canadian equities as well as US ones. I am currently out of the US markets and fully in [long] in Canadian ones -- up to my country allocation limit.
  • 1 decade ago

    1. You are smart for starting early in life

    2. Stick with ETFs over Mutual Funds & Stocks until you feel more comfortable investing.

    3. Read Mark Hulbert from Market Watch. He is the consumer report of news letters.

    If I were just starting out. I would divide my money into 1/3 increments and invest in 3 ETFs.

    Relative Strength (RS) - Stronger stocks

    PDP - Top 100 RS US stocks

    PIZ - Top 100 RS Developed Nation Stocks

    PIE - Top 100 RS Emerging Market Stocks.

    These ETFs will rebalance once a quarter so you do not have to do anything and the ETF will keep you in the strongest areas.

    Always stay 100% invested. Yes you will hit bad times but over time you do better than trying an time the market.

    Do not try get rich quick schemes. I have tried many over my life time and only 1 hit. I would have been much better off staying conservative.

    There are many discount brokers to use. My friend in Canada uses Interactive Brokers and likes them.

  • 1 decade ago

    If the mutual funds are well diversified then just leave the money for a while and get a sense of what the market is doing. It looks like it's not going higher any time in the near future. But for the long haul, find a trusted family friend who is in the business of financial planning and run some things by him. Don't move all of it at once- dollar-cost average. Don't put all your eggs in one basket- diversify. Add new money as you can. You are young and there is no better time than now. Compounded interest is an amazing thing!

  • 1 decade ago

    Read..."Investing for Dummies"

    It is an easy to read book that explains a lot about investing...may it is available at you library, if not , it can be ordered at any bookstore and maybe even at www.amazon.ca

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