Rookie Investor: Mutual Funds or Stocks?

Question

I am 27 and I am been pretty conservative when it comes to investing. To date, I have mainly been investing in RRSPs and RESPs. In the last year I have bought and sold a couple stocks (based on tips for friends) with limited success.&#xD;&#xA; &#xD;&#xA;I am have been watching Mad Money lately and I am trying to learn more about stocks. What is an average/good return on a stock? I&#x27;ve also been looking into Mutual funds and I see lots with 50%&#x2B; compounded returns for 5 years (around 10%/year). With stocks is it realistic to consistently achieve much more than 10%/year?

BountyHunt · Answer

I am 27 and I am been pretty conservative when it comes to investing. To date, I have mainly been investing in RRSPs and RESPs. In the last year I have bought and sold a couple stocks (based on tips for friends) with limited success.&#xD;&#xA; &#xD;&#xA;I am have been watching Mad Money lately and I am trying to learn more about stocks. What is an average/good return on a stock? I&#x27;ve also been looking into Mutual funds and I see lots with 50%&#x2B; compounded returns for 5 years (around 10%/year). With stocks is it realistic to consistently achieve much more than 10%/year?

toady13 · Answer

My advice is to invest in mutual funds. Within mutual funds, you can still invest in stocks, but instead of individual stocks, it's a group of stocks wrapped into one fund. Different funds have a mix of stocks, bonds or whatever. Since you are relatively young still, have a growth fund that is primarily invested in stocks.

I don't advise picking individual stocks. If you picked well, then you should be a pro stock picker. Mutual funds are great because it balances out the risk. Not only that you don't have to waste/spend time doing research on all your individual stocks.

Vermeer · Answer

As above, they offer diversification (pick a couple at least, one domestic, one internationally oriented)...just make certain you know the expense ratio, and certainly, given this market, past performance hardly guarantees future results!!!

Dodge and Cox, Third Avenue, or many others out there I would look at.

Toadyrock · Answer

MDLOX&#xD;&#xA;Black Rock Global Allocation is a great blend portfolio ~12-13% ave annual return over past 20 years.  It is a great core holding. awsome track record, little downside exposure.

claycourtlesson · Answer

Mutual funds.  Don&#x27;t mess with this stuff until you really get some seasoning.  No doubt anyone with a brain can do his/her own investing, but it takes some time to learn the ropes.&#xD;&#xA; &#xD;&#xA;I&#x27;ve done my own calls for about 18 years now and have beaten the SP over that time, but I "STILL" get scared when executing a new order for a "day trade."  And I definitely know my way around the US stock markets.....it just can be that rough at times.&#xD;&#xA; &#xD;&#xA;Cheers

tkf18ny · Answer

[Quote: Originally Posted by Toadyrock]  MDLOX&#xD;&#xA;Black Rock Global Allocation is a great blend portfolio ~12-13% ave annual return over past 20 years.  It is a great core holding. awsome track record, little downside exposure.  [/Quote]5.07 front load fee lololno thanks

70-Six · Answer

trading stocks=WORK WORK and more WORK,more than Im willing to do for I dont have the time,resources,or brains to be successful trading.&#xD;&#xA;mutuals are the way to go until you get a good feel for the markets and you can develop a feel thru paper trading for at least 6 mos. to a year.even then I would start with ETF&#x27;s.&#xD;&#xA;take Mad Money very lightly,you dont want to become one of Cramers sheeple,the guy is smart and I dont think hes out to fuck people but you must think for yourself,its your money.

AZGrinder · Answer

My advice is mutual funds with money you want to be "safe" stocks with money you want to take chances for much better gains with and stay from penny stocks.&#xD;&#xA; &#xD;&#xA;Typically loaded funds suck but in some cases they are just fine if held for a long time(agthx for example) because they usually have much lower annual expenses than no load funds....but be vary careful with the loaded ones.

Stuckey · Answer

No load mutual funds. There is no argument here. Even that fucking idiot Cramer has been quoted saying he alters the market, and he has cost people a lot of money.

Without inside info, you are not going to make money over the long run investing in stocks.

Just get a diversified mutual fund portfolio, and make sure you put money in over time, consistently rebalance, and adjust for age based allocation. No loads because every single dollar counts when youre talking about compounding growth.

Stuckey · Answer

My first through when I saw this post.  Can&#x27;t believe people buy these things

Toadyrock · Answer

&#xD;&#xA;I buy at NAV as an employee.&#xD;&#xA;Don&#x27;t forget ROA.

tkf18ny · Answer

great advice

Rookie Investor: Mutual Funds or Stocks?

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