I have to agree with the many remarks regarding paying down debt prior to really sinking your teeth into the market. However, for those of us who are waiting quietly to finally rid ourselves of Sally (that's Sally Mae
) there is nothing wrong with being well informed...
On that note I personally prescribe to the The Motley Fool .... awsome daily newsletter, and usally an unbiased opinion about basic steps regarding investing, e.g. stocks, vs mutual funds etc...... Honestly, I've been picking through my new hire package for residency.....tax sheltered annuities , 403B's etc...and I'm so happy that I have a basic understanding of the options that are out there.
peace
---- brief article about mf investing from the Fool...... i
By Shannon Zimmerman (TMF Zman)
Advisor, Motley Fool Champion Funds
This past weekend, I had the thrill of a lifetime: I celebrated
my first Father's Day as an actual father.
For gifts, I received a hammock, which I immediately assembled
and read the newspaper in, and a fancy-schmancy grilling-out
toolkit from Williams-Sonoma (NYSE: WSM).
Not feeling especially motivated -- what with the hammock and
all -- I haven't put my new tongs, sauce brush, and sundry other
pieces of impressive-looking equipment to work quite yet. Still,
it's certainly nice to know that the next time I spring into
barbecuing action, I'll have the right tools for the job.
Best of all, though, was the card I got from my 11-month-old
daughter, whose mom says she merely transcribed what little
Penny Lou told her to write. I have my doubts about that story,
but it sure was a sweet message, one that made me think,
naturally enough, of mutual funds.
Why so, you ask? Good question. Here's the good answer: To my
way of thinking, a portfolio made up of carefully selected
mutual funds is tailor-made for folks with more on their minds
than how the market happened to fare on this day or that.
DON'T GET ME WRONG
I invest -- very selectively -- in individual stocks, too, and
I certainly think performance tracking is part of the fun of
investing. Indeed, it's for that reason that we keep daily tabs
on each recommendation I've made since the Motley Fool Champion
Funds newsletter service first opened for business back in
March 2004.
http://www.fool.com/m.asp?i=1685110&u=31914327
And, like many of you, I'm planning for my family's financial
future based on assumptions about the rates of return I'll earn
over the number of years I have to invest. Those returns,
therefore, matter a lot to me and so, to put it simply, my
personal and professional aim is to beat the market over the
long haul. But -- and this is key -- I want to do that with a
minimum of volatility.
Take this year, for instance. So far, the S&P 500 has managed to
eke out just a small gain. Folks who invest in such 500-tracking
stalwarts as SPDRs (AMEX: SPY) and Fidelity Spartan 500 Index
(FUND: FSMKX), for example, may not be exactly thrilled with a
return in the neighborhood of 1%, I'll grant you that.
Still, compared with folks who have been invested this year in
such individual names as IBM (NYSE: IBM), AIG (NYSE: AIG),
United Parcel Service (NYSE: UPS), and Verizon Communications
(NYSE: VZ) -- S&P 500 stalwarts all -- they've had a smashing
success: Each of those companies has posted a double-digit loss
thus far in 2005.
This dynamic works in the opposite direction, too, and if you
can stomach the volatility, your search for nearer-term
10-baggers probably lies in the direction of individual stocks.
For me, though, when it comes to saving for retirement,
I prefer to ride a Segway, not a roller coaster.
AH, SWEET SANITY
Which is precisely why I invest primarily in funds.
A portfolio composed of just individual stocks can easily be
rocked and rolled by a mere shred of ultimately meaningless news
-- a "bellwether" company missing earnings estimates by a penny,
say. With funds, on the other hand, there's never a need to hang
out at your computer all day, constantly refreshing your browser
to find out just how much more (or less) wealthy you are than
before that analyst on Squawk Box made his off-the-cuff remark.
Mutual funds are priced just once per day, after the close of
business and after all the day's market dust has settled. As a
long-term investor who likes to hang out in his hammock, I like
the sanity of that policy.
Indeed, I take it as a comforting metaphor for the process of
fund investing itself. At the very least, it sure beats whatever
the heck is happening on the floor of the stock exchanges
whenever you see them as backdrops during business news shows.
What are those people doing, anyway? Whatever it is, it sure
makes the concept of "efficient markets" seem like an oxymoron,
doesn't it?
CHOOSY INVESTORS CHOOSE CHAMPS
Still, while I think fund investing is the smart choice for
virtually all long-term investors, that's only the case if you
pick the right funds. And that's precisely why Champion Funds
exists. The newsletter focuses like a laser beam on just those
funds with core criteria -- cheap price tags, talented
management, and sound investment strategies -- that make 'em
worthy of a portion of your nest egg.
http://www.fool.com/m.asp?i=1685111&u=31914327
What's more, they're the kind of funds that allow you to swing
(or even sleep) peacefully in your hammock while the stock
market world churns and turns.
What, I ask you, could possibly be better than that?
