Is it a good time to invest in mutual funds for a 27 year old?

yes to the investing part, but no to the 50% part, the 100% NA stocks part, and the 2% part.

I don't see why 50% is a bad idea, I was even thinking of putting in more.

As for the 100% NA stocks and 2% fee, that's what they offer at the bank. Well one of the plans that seemed good to me

Finance man wrote:

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I am thinking of taking at least 50% of my pay checks and put them into mutual funds that has 100% north american stocks. Ill let someone at my bank manage them for a 2% fee.

Is this a good idea?

(1) Saving money is always a good idea

(2) Investing in equity mutual funds is a good idea IF you will not be needing the money for ten years or more and a drop of 30% or more will not make you lose any sleep or change life plans for the worse.

(3) Staying with 100% North American stocks in NOT a good idea. Diversify worldwide for minimizing your risk at a given expected return (or maximizing your expected return for a given risk level).

(4) Letting someone manage them for a 2% fee is NOT a good idea.

(5) Use Vanguard low cost index funds. The simplest approach would be to simply invest in one fund - Vanguard Total World Stock Index Fund Investor Shares (VTWSX) should do it.

No worries.

Finance man wrote:

I don't see why 50% is a bad idea, I was even thinking of putting in more.

As for the 100% NA stocks and 2% fee, that's what they offer at the bank. Well one of the plans that seemed good to me

You are right, the 50% is not a bad idea.

As far as 100% NA and 2% fee, there is no need to invest through your bank.

well maybe to the 50% part, if you can afford it. But no way you should own just NA stocks and absolutely no way you should pay 2%. 1% is industry standard and I charge 0.8% in most cases.

You should own everythign in the global financial marketplace - you are more likely to get higher returns at a lower risk that way.

And of course they are probably using mutual funds with high expenses. Cripes, your total fees will probably be close to 4%. Which is absurd - that is almost half your expected return.

They is robbing youse. fight back.

agip wrote:

well maybe to the 50% part, if you can afford it. But no way you should own just NA stocks and absolutely no way you should pay 2%. 1% is industry standard and I charge 0.8% in most cases.

You should own everythign in the global financial marketplace - you are more likely to get higher returns at a lower risk that way.

And of course they are probably using mutual funds with high expenses. Cripes, your total fees will probably be close to 4%. Which is absurd - that is almost half your expected return.

They is robbing youse. fight back.

My answers are simpler (and more correct).

The market is near it's peak. Hold on to your cash and invest when it is off at least 25% from high. You'll have a lot more money 30 years from now.

tinman winner wrote:

The market is near it's peak. Hold on to your cash and invest when it is off at least 25% from high. You'll have a lot more money 30 years from now.

The market is near its peak, unless, you know, it isn't. Don't listen to people who try to time the market.

...unless you don't want to maximize your gains. Put it all in now and you'll be sorry later.

donkus wrote:

tinman winner wrote:

The market is near it's peak. Hold on to your cash and invest when it is off at least 25% from high. You'll have a lot more money 30 years from now.

The market is near its peak, unless, you know, it isn't. Don't listen to people who try to time the market.

Some things to consider here:

(1) We are at the top end of a trading range between roughly 800 and 1600 in the SP 500 that goes back 15 years. There is no evidence at this point whether we will break out to the top side, or top out and make another trip down to the 800 region (which has happened twice before).

(2) During the period we have been in this trading range, Pimco's Bill Gross has outperformed virtually every stock fund with bonds, and his Total Return Fund is the largest fund in existence as far as I know (I am an investor in this fund).

(3) Companies are making record profits, but earnings momentum has clearly peaked. But at the same time, real estate momentum is on the upswing in a big way.

(4) The majority of highest performing stock mutual funds for the last 5-10 years are small cap funds.

(5) Top US hedge funds are moving assets from NA to Europe, as the returns in Europe are expected to be higher, and perhaps significantly higher.

(6) When John Q Public jumps into the market tends to be a very risky time to join. Public investors are always late, and flow of capital for stock funds since 2007/2008 didn't turn positive for the first time since January of this year. Beware.

Simply going out and buying NA stock funds at this point is rolling the dice. The market has not been much higher than now for a long time, and this could continue for a long time--or it could end in a breakout next week. But at this point, it is difficult to see where the earnings to put the market in a new era are going to come from. If you are going to do it, you will be safer with a "asset allocation" mix of small caps, bonds, and cash or international.

You can simply be patient, given that your returns are likely to be limited until something changes. If the market does break out above the current trading range, go with it. If it tops and goes back down, assume you are going to see the 800-1000 region again, and simply wait for the party to begin again.

...or coach d.

Where would you suggest I go to educate myself on stocks and investing? Books? Sites? Financial advisors?

I still think some of these replies were very helpful to me, even if it is anonymous.

Finance man wrote:

Where would you suggest I go to educate myself on stocks and investing? Books? Sites? Financial advisors?

I still think some of these replies were very helpful to me, even if it is anonymous.

Read Bogle's books. Of course, there are hundreds of other good choices (along with thousands of really bad ones), but you will know all you need to know if you understand the easily readable Bogle books.

The Little Book of Common Sense Investing

The Clash of the Cultures

Common Sense on Mutual Funds

Bogle on Mutual Funds

No worries.

Simple (and correct) Answers wrote:

Finance man wrote:

Where would you suggest I go to educate myself on stocks and investing? Books? Sites? Financial advisors?

I still think some of these replies were very helpful to me, even if it is anonymous.

Read Bogle's books. Of course, there are hundreds of other good choices (along with thousands of really bad ones), but you will know all you need to know if you understand the easily readable Bogle books.

The Little Book of Common Sense Investing

The Clash of the Cultures

Common Sense on Mutual Funds

Bogle on Mutual Funds

No worries.

And if you have time, A Random Walk Down Wallstreet by Malkiel.

Educate yourself - it doesn't take long, and you certainly don't need to possess any particular aptitude. Then you will not have to rely on market timers, anonymous message boards, or worst of all, salesmen.

I appreciate your help. Again thank you

In defense of the industry - many (most?) people are simply not interested in learning to be investors. They are good musicians, teachers, lawyers, doctors, whatever. They don't need to have a new thing to master, with the possible downside of losing all their money.

You hire professionals to change your oil, do your taxes, check your health, write your will. Sure you COULD do these things yourself, but most people don't want to do the work to figure it out.

You mess this up, you are $*%$&ed.

That said, I myself told the OP that paying 2% was = to being robbed. There is a fair price, and I think 0.8% is that price.

Simple (and correct) Answers wrote:

...or coach d.

What you don't like as I have exposed the BS from people promoting Vanguard as investing a number of times. If you go through lists of best performing money managers, as you can see here:

You won't find anything from Vanguard. It's just a sop to people who don't know what they're doing and want to make believe throwing darts at the market is investing. It isn't, and the market won't bail you out as long as its in a trading range.

coach d -

this whole 'trading range' notion of yours breaks down when you look at the markets. It only makes any sense if your whole investment universe = large cap stocks. Virtually every other asset class has broken out to new highs long ago. Small cap, mid cap, emerging markets, metals, REITS, etc. balanced accounts have done spectacularly well - blown through highs long, long ago.

http://finance.yahoo.com/echarts?s=VBINX+Interactive#symbol=vbinx

;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

That's why everyone tells the OP not to just invest in North AM.

And Vanguard is God's own company.

agip wrote:

You hire professionals to change your oil, do your taxes, check your health, write your will.

The difference is that these people know what they are doing.