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I found this quick and straight forward video on what investments a 20 something year old should be making.
Check it out. Let us know if you have any good investment advice in the comments below.
Here’s the transcript of the video:
Katrina: Hi, I’m Katrina. I’m the Social Media Manager here at The
Motley Fool. We’re here to answer your investing
questions, and I’ve got a batch in from Facebook and
Twitter. I’m going to send them down to our analyst who
will answer them with their Foolish opinions. Here’s a
question from Guy on Twitter. “What investments should 20-
somethings be making who don’t have student loans?”
Anand Chokkavelu: So what does a 20 year old with no college debt do
with their money? Of course you want to make sure you’re
paying off all your high-interest debt, if you have any
credit card debt, and you want to establish an emergency
fund. Then, because of your long time horizon, you’ve got
40 years ’til retirement, or thereabouts, you want to be
heavily weighted in the stock market versus, say, bonds.
With that money, you want to make sure you’ve got at least
a five-year time horizon. You don’t want to be dipping back
into the money if you’re in the stock market, because it is
so volatile and you don’t know where it’s going to be in
the next five years. Over the long term, stocks should be
going up. There are two ways to really approach the stock
market, if that’s where you want to be. There’s the easy
way and the more difficult way.
The easy way is to purchase index funds and ETFs. There’s
no shame in this. You’ll track the market. The dirty little
secret is most investors don’t beat the market. I think
everyone should be weighted at the core of their portfolio,
even if they pick individual stocks, in these indexed
mutual funds and ETFs. I think Vanguard is the best
provider of those. They’re very low cost and very
shareholder friendly. If you want to buy individual stocks
in at least part of your portfolio, I think you’ve come to
the right place! At Fool.com we hope you come to our site
and read up about individual stocks.
Now we want to hear from you. Leave your comments below.
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