1) Gold is a commodity like soy beans or pork bellies. Dont bother with it. It is an emotional investment. If you want to put 5% of your total portfolio into gold as an inflation hedge, that's okay. But no more than 5%.
2) Dividend stocks are a great idea. In the last 100 years 40 % of equity returns have been in compounded dividends. The long-term average dividend yields have been around 7%, way, way above where there are now, but the pendulum will swing around again in your lifetime.
3) Yes, a portfolio is YOUR total investments. Does not have to be in one place, brokerage, bank, or whatever to be, all together, your portfolio.
4) Get into an S&P 500 ETF. It is a way to buy into ALL the biggest companies in America so you are investing in ALL of America. Some go up, some go down, but, by having them all, you get the average. And, remember, every year 80% of money managers fail to beat the S&P 500 average.
As for emergency money, if there is an emergency, you won't need all of it the first day of the emergency, so, instead of keeping it all in cash, you could spread some of it out over several short-term investments, such as, 3 month or 6- month CDs. That way you know the money is available soon (3 months) but it is still working for you (even if the rates suck right now).
Also, the 401k is only a portfolio (wallet) not an investment. What you put in the 401k (stocks, bonds) is the investment. And get an IRA after you max out the 401k. Either Roth or traditional. There's a way to fund a Roth by doing a traditional first and then convert and that way you don't pay any taxes but no room to detail that here.
Good luck! And stick 10%-20% of every dollar you ever earn into your investments (S&P 500 ETF) and you'll be a millionaire by 45 y/o.
Hey I'm 19yrs old, and I've been developing an interest in investing. I currently have an 401k through my employer which i have set to 5% of every pay. I've also been taking 20% of every pay and putting it in a savings account at 0.30% which I don't touch. But i wanted to do more investing but had a few questions.
1.) I was thinking about buying a 2.5g gold bar and keeping it until I retire and occasionally buying more gold here and there. Is that a good investment?
2.) Do dividend paying stocks pay good dividends? I was considering buying some dividend paying stocks in companies I trust and letting it build. I didn't want to actively trade stocks because I don't want the fees eating up all my profits plus I'm not an stock expert and I don't like wasting money.
3.) If my investments are all separate could I still call/consider it a portfolio? Like my 401k, along, with gold, and some stocks would that all together be considered a portfolio?
4.) Finally my last question, whats a good investment that i can moderately grow without me having to make a bunch of decisions? I was thinking along the lines of mutual funds but I'm not 100% if thats best.
*Note: I planned on saving up atleast $1000 for emergency money before I started investing but I just wanted to start planning my investment strategy early. I fear I wont grow up to be a big millionaire like I hoped so while time is still on my side at age 19, i figure I better start investing the little money I have. Thank You!
