Time to be an adult and buy stocks.

[Chino]

Hey DTF people.

I am ready to finally get into the stock market. Now, while I have never actually purchased stocks, I am very familiar with the market. I've been following it since high school, and when I was in college (it's weird saying that) we had stock competitions every semester. We'd receive $1,000,000 and play a against the market in real time. Out of more than 80 competitors, I won the last two years in a row. I also opened my 401K plan four years ago, a few weeks after I turned 21. I regularly move my funds around and my weakest quarter so far has been an 8.5% return (Highest was 22%).

Now that I'm working my full time job (as well as getting a few grand back in taxes), I am able to put a fairly significant amount of money aside on a regular basis. I'd like to start investing for real. However, I have no idea how to go about actually buying stocks. Elder members of DTF, please advise. 

[rumborak]

When I had stock options with my previous company, it was all through E-Trade. They were pretty good IIRC.

I eventually got rid of all the stock options. Having singular stocks require you to stay abreast all the time. I just don't care about money enough for that, so I invest in more conservative things (funds, bonds etc.)

[TempusVox]

Other than E-Trade as Rumby suggested, I would stick the money in your companies 401K. There are a number of options available to you. You might want to try some riskier options internationally seeing as you are younger. I would steer clear of bonds really until you get to be an older fart like me. Just doesn't give you the return you can make in the long run, and you really don't need the same level of security with your money as an older person would.

I have a number of stocks, and we're always buying and selling; but I have a lot of money invested, so I have financial planner, as well as a stockbroker who helps manage my portfolio. You might do well to get a financial planner. You could go it alone, but you could also go to the auto parts store and buy the stuff to fix your own car; but you'd probably be better served to take it to a reputable mechanic. A certified planner can help guide you into investments that help you with your financial goals and strategies as you get older. As you get older, and busier andhopefully more wealthy, your financial goals – and options – get more complicated. A financial planner or advisor can save you time, and maybe make you a bunch of money.

Make sure they are a CFP though. Any yahoo can call himself a planner, but make sure they are certified. Good luck

[Chino]

I'm already maxxed out with what I'm allowed for work contributions. I'm putting in 10% of my gross and my employer is putting in 6%. I've also been debating an IRA. Thanks for the wisdom.

[Blazinarps]

BRK/B.

You're welcome.

Solid history of beating the general market, and it's self diversified.

90% of my investments are Berkshire Hathaway.

[puppyonacid]

I'd try and avoid stock picking by yourself. It can be expensive and you can lose a lot of money.

Diversification is key as you probably know. Also investing for the long term means not getting jittery and jumping out every time your portfolio takes a hit.

I'd always suggest going for low charged index tracking funds. Aggressively managed active funds tend to be higher charged (and you pay the charges whatever the weather) and that can eat in to capital as well as returns.

Just my humble opinion.

[ReaperKK]

I'd try and avoid stock picking by yourself. It can be expensive and you can lose a lot of money.

Diversification is key as you probably know. Also investing for the long term means not getting jittery and jumping out every time your portfolio takes a hit.

I'd always suggest going for low charged index tracking funds. Aggressively managed active funds tend to be higher charged (and you pay the charges whatever the weather) and that can eat in to capital as well as returns.

Just my humble opinion.

This is some good advice right here. My main source of income is trading stocks and currencies, you will have to spend a lot of time researching and trading to make a good profit and steady returns.

[jonnybaxy]

I read 'Time to be an adult and buy socks' 

[puppyonacid]

Trading on the sock market is darn difficult and full of holes

[rumborak]

I'd try and avoid stock picking by yourself. It can be expensive and you can lose a lot of money.

Diversification is key as you probably know. Also investing for the long term means not getting jittery and jumping out every time your portfolio takes a hit.

I'd always suggest going for low charged index tracking funds. Aggressively managed active funds tend to be higher charged (and you pay the charges whatever the weather) and that can eat in to capital as well as returns.

Just my humble opinion.

This is some good advice right here. My main source of income is trading stocks and currencies, you will have to spend a lot of time researching and trading to make a good profit and steady returns.

Not only that, but the idea of consistently beating the market is pretty much a myth. There's people whose job it is to try to beat the market, and even they can't.

[puppyonacid]

I'd try and avoid stock picking by yourself. It can be expensive and you can lose a lot of money.

Diversification is key as you probably know. Also investing for the long term means not getting jittery and jumping out every time your portfolio takes a hit.

I'd always suggest going for low charged index tracking funds. Aggressively managed active funds tend to be higher charged (and you pay the charges whatever the weather) and that can eat in to capital as well as returns.

Just my humble opinion.

This is some good advice right here. My main source of income is trading stocks and currencies, you will have to spend a lot of time researching and trading to make a good profit and steady returns.

Not only that, but the idea of consistently beating the market is pretty much a myth. There's people whose job it is to try to beat the market, and even they can't.

So says the Efficient Market hypothesis.

Beating the market is down to luck rather than skill. That's what the evidence says any way. The way I look at it, in a class of dunces somebody has to come top. Also, active managers get quite choosy about where their funds are benchmarked which can be massively misleading.

Historically the markets always produce a return in the long term. Interestingly though, there have been significant periods where bonds and fixed interest products have outperformed equities.

Ultimately though, if you're in your 20's and investing for retirement you want to go for nigh on 100% growth (equity) stocks rather than fixed interest. That gives you 40 odd years to smooth out even the most cataclysmic stock market crashes.

But remember kids - past performance is no guide to the future.

[rumborak]

I have all my money in Fidelity, and they have a neat investment analysis tool that lets you plan your investments. So, you say on a dial how aggressive you want be for growth, and then it suggests a mix that will achieve that goal. Very cool, and you don't have to talk to a smarmy guy, the kind of guy you hated in highschool.

[puppyonacid]

Where I work we tend to go for Dimensional, Blackrock and Vanguard funds.

16 index trackers from sectors from bond funds all the way to emerging markets. Then the mix depends on tolerance for risk and we put them in to a model portfolio on that basis.

We have clients that use fidelity. It's all much of a muchness really. As long as you keep charges low then you're on the right lines.

[Blazinarps]

Since it seems my original post was ignored, I will just post this.

https://www.google.com/finance?cid=9614464

[rumborak]

BRK/B.

You're welcome.

Solid history of beating the general market, and it's self diversified.

90% of my investments are Berkshire Hathaway.

Yeaaaahhh ....

While they may have a good track record, and they may be large enough to not see super-big fluctuations, I think it still counts as putting all your eggs into one basket.
Putting 90% of your money into a single stock is *never* a good idea, no matter what you might think of the company.

[puppyonacid]

Agreed

Plus you're in for one hell of a volatile ride. That fund is very bumpy and looks like it has a higher beta than the market average (beta is how closely a stock follows market movements. A stock with a high beta will exaggerate market movements by going higher and dipping lower than the market average).

But hey it's all a crapshoot. Long term strategy with high diversification is the bottom line. That Berkshire Hathaway fund would be a useful addition to the aggressive part of a portfolio but as rumborak said, I wouldn't be lumping all in to one stock or fund.

[Blazinarps]

Actually, beta is the measure of risk against the general market.

So a beta of .47 a very good thing.

Agreed investing in one company only is a terrible idea, unless that company is BH.

See the list of what BH owns/manages.

https://en.wikipedia.org/wiki/List_of_assets_owned_by_Berkshire_Hathaway

If you had a diverse and well chosen portfolio, you would likely only get 50% ROI of what you would get only owning BH.

Put this way, if you're going to have an actively managed portfolio, would you rather have a guy down the street manage it, or the greatest investor of all time?

[puppyonacid]

That is what I said. Beta is a measure of systematic risk which indicates the volatility of a stock relative to the market. By definition the market has a beta of 1, and the beta of an individual security reflects the extent to which the securities return moves up or down with the market.

No one is disputing the returns of offer from the fund you offered up. But you cannot predict with any certainty how that individual fund will fair over the next 10 years. What you can saywith some degree of certainty based on empirical evidence is that the market will bring you a return over the long term.

You are right in the if the Berkshire Hathaway fund were only half of your portfolio then by definition only half of your portfolio would reap the benefit of that return - or half your capital I should say. But the converse is just as true. If that fund takes a dive (and it could. You have absolutely no way of predicting what factors will dictate whether that happens) then only half your capital will be affected. That is the principle behind diversification and hedging.

I'm offering an alternative view to yours. That's all.

[Blazinarps]

Sigh.

I didn't say anything about BH being half of a portfolio.

What I said, in possibly clearer language is that the ROI of BH versus the rest of the market is 2-1.

Investing in an extremely well diversified company, to which I have linked proof, which has beat the rest of the market for ALMOST 50 years is  not just a GOOD idea, but probably the BEST idea.

[jasc15]

I'd try and avoid stock picking by yourself. It can be expensive and you can lose a lot of money.

Diversification is key as you probably know. Also investing for the long term means not getting jittery and jumping out every time your portfolio takes a hit.

I'd always suggest going for low charged index tracking funds. Aggressively managed active funds tend to be higher charged (and you pay the charges whatever the weather) and that can eat in to capital as well as returns.

Just my humble opinion.

Another +1 for this.

You cannot reliably pick stocks and beat the average market returns over any significant time period.  And any "advisor" who says he can would be making billions of dollars doing it, and wouldn't need you for his commissions.

Check out www.bogleheads.org for a whole world of passive index investors.  Lots of info and studies on why it's a fool's errand to think you can do well actively trading.

This is not a "you get what you pay for" industry.

A few gems

"The stock market will fluctuate, but you can't pinpoint when it will tumble or shoot up. If you have allocated your assets properly and have sufficient emergency money, you shouldn't need to worry." (AAII Guide to Mutual Funds)

"Endless tinkering is unlikely to improve performance, and chasing last period's stellar achiever is a losing strategy." (Frank Armstrong, author and adviser)

"It must be apparent to intelligent investors--if anyone possessed the ability to do so (market time) he would become a billionaire quickly." (David Babson, author, adviser)

"What it really takes to improve your returns and diminish your risks is a willingness to stop focusing exclusively on the movement of the markets." (Baer & Ginsler, The Great Mutual Fund Trap)

"If we haven't said it enough, we'll say it again: Market timing is dangerous." (Barron's Guide to Making Investment Decisions.)

"Only liars manage to always be "out" during bad times and "in' during good times. (Bernard Baruch, famed investor)

"Market timing recommendations have an impressive track record of being harmful to an investor's financial health." (Peter Bernstein, author, researcher)

"There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know." (Wm Bernstein, author and adviser)

In January 2008, only 2 out of 248 Bogleheads, forecast how low the S&P 500 Index would fall that year (Boglehead Contest)

"If you're determined to succeed at investing, make it your first priority to become a buy-and-hold investor." (Jack Brennan in Straight Talk on Investing)

"When you give up the hope that some advisor, some system, some source of inside tips is going to give you a shortcut to wealth, you'll finally begin to gain control over your financial future." (Harry Browne, author)

"For the 12 years ending 1997, while the S&P rose 734% on a total return basis, the average return for 186 tactical asset-allocation mutual funds was a mere 384%." (Buckingham Financial Services)

"We have long felt that the only value of stock forecasters is to make fortune-tellers look good." (Warren Buffet)

"Market timing is an ineffective strategy for mutual fund investors." (CDA/Wiesenberger)

"Any investment method that relies on predicting the future is doomed to fail." (Chandan & Sengupta, financial authors)

"A successful investor has a good knowledge base, a well-defined investment plan, and nerves of steel to stick with it." (Andrew Clarke, financial author)

"Most investors are unable to profitably time the market and are left with equity fund returns lower than inflation." (2003 Dalber Study)

"Take my word on it. Buy-and-hold is still your best long-run strategy." (Jonathan Clements, author & journalist)

"The buy and hold equity investor (S&P 500) would have earned a return of 8.35% for the 20 years ending 12/08, while the market-timer would have earned just 1.87%." (Dalbar research)

"Market-timing is bunk." (Pat Dorsey, M* Director of Fund Analysis."

"The performance of 185 tactical asset allocation mutual funds was compared with buy-and-hold strategies and equity mutual funds over the years 1985-97. Over this period the S&P 500 Index increased 734%, average equity funds increased 598%, and tactical asset allocation funds increased 384%." (David Dreman, author)

"Market timing is a wicked idea. Don't try it-ever." (Charles Ellis, author of The Loser's Game)

"Do nothing. I think all of this market timing is statistically unfounded. I don't trust it. You may avoid a downturn, but you may also miss the rise. Choose the risk tolerance you're OK with and hold tight." (Professor Eugene Fama)

"Forget market timing in any form." (Paul Farrell, (CBS Marketwatch.com)

"The best practice for investors is to design a long-term globally diversified asset allocation based on present and future financial needs. Then follow that plan religiously, through all markets good and bad." (Rick Ferri, author and adviser)

"Benjamin Graham spent much of his career trying to devise a good formula for when to get into--and out of--the stock market. All formulas, he concluded, failed." (Forbes, 12-27-99)

"Buy and hold. Diversify. Put your money in index funds. Pay attention to to the one thing you can control--costs." (Fortune Investor's Guide 2003)

"Dont' sell out of fear or buy out of greed. Just keep making investments, and let the market take its course over the long-term." (Norman Fosback, author, researcher)

"We have two classes of forecasters: those who don't know-and those who don't know they don't know." (John Kenneth Galbraith, Economist)

"I've learned that market timing can ruin you." (Elaine Garzarelli, a once famed market-timer)

"Staying on course may be just as difficult in bull markets as in bear markets." (Good & Hermansen, Index Your Way to Investment Success)

"For most investors the odds favor a buy-and-hold strategy." (Carol Gould, author & financial columnist)

"If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting that's going to happen to the stock market." (Benjamin Graham)

"From June 1980 through December 1992, 94.5% of 237 market timing investment newsletters had gone out of business." (Graham/Campbell Study)

"Your very refusal to be active, and your renunciation of any pretended ability to predict the future, can become your most powerful weapon." (Graham & Zweig, The Intelligent Investor)

"The best advice: buy and hold." (John Haslem, author and researcher)

"Even in a bear market, market-timing and actively managed mutual funds generally hurt investment performance more than they help it." (Mark Hulbert, N.Y.Times columnist)

"After receiving the Nobel Prize, Daniel Kahneman, was asked by a CNBC anchorman what investment tips he had for viewers. His answer: "Buy and hold."

"I am not a trader, and don't believe in trying to time the market or outguess the short-term fluctuations." (Lawrence Kudlow, CNBC)

"Timing the market is for losers. Time IN the market will get you to the winner's circle, and you'll sleep better at night." (Michael Leboeuf, author)

"No one is smart enough to time the market's ups and downs." (Arthur Levitt, former SEC chairman)

"Markets will go up and they'll go down over your investing lifetime, but it's time in the market that counts, not market timing." (Mel Lindauer, author and Forbes columnist)

"It never was my thinking that made the big money for me. It always was my sitting." (Jesse Livermore, author & famed investor)

"Nobody can predict interest rates, the future direction of the economy or the stock market." (Peter Lynch)

"Buying-and-holding a broad-based market index fund is still the only game in town." (Burton Malkiel, author of classic Random Walk Down Wall Street)

"At the peak of the bull market in March of 2000 only 0.7% of all recommendations on stocks issued by Wall Street brokerages and investment banks were to "Sell." (Miami Herald, 1-26-03)

"If you can't handle the short term, if the uncertainty is stressful and the headlines are unbearable, then the markets are too hot for you: get out of the kitchen." (Moshe Milevsky, author & researcher)

"Timing is public enemy number one in investing." (Mutual fund manager)

"We're not keen on market-timing. It just doesn't work." (Morningstar Course 106)

"We've yet to find anyone who can accurately and consistently predict the market's short-term moves." (Motley Fools)

"In 1999, 70% of day traders sustained losses that wiped out their accounts." (North American Securities Administrators Association)

"The most active traders earned 7% less annually than buy-and-hold investors." (Odean & Barber study of 66,400 investors)

"Forget trying to time the market and do something productive instead." (Gerald Perritt, financial author)

"The market timer's Hall of Fame is an empty room." (Jane Bryant Quinn)

"Setting a plan to take some risk and sticking to it isn't always comfortable, but I can tell you that it works a lot better than the alternative." -- Pat Regnier, Assistant Managing Editor, Money magazine

"Countless studies have proved that no one is able to time the market effectively." (Mary Roland, author & journalist)

"Trading is based on the rather arrogant belief that the trader knows more than the buyers and sellers with whom he is trading." (Ron Ross, The Unbeatable Market)

"In the long run it doesn't matter much whether your timing is great or lousy. What matters is that you stay invested." (Louis Rukeyser, TV host)

"For the 10 years that ended 12-31-2000, only one newsletter out of the 112 that Timers Digest follows managed to beat the S&P 500 Benchmark." (Jim Schmidt, editor)

"What do I really think is going to happen? -- I have absolutely no idea. (John Schoen, senior producer for msnbc.com)

"I have learned the hard way that market timing and trying to pick a fund that will out-perform the market are both losing strategies." (Bill Schultheis, author and advisor)

"I'm a strong advocate of buying and holding." (Charles Schwab)

"It turns out that I should have just bought them (securities), and thereafter I should have just sat on them like a fat, stupid peasant." (Fred Schwed Jr., Where Are the Customers' Yachts?)

"If you are not going to stick to your chosen investment method through thick and thin, there is almost no chance of your succeeding as an investor. (Chandan Sengupta, financial author)

"Investors should look with a jaundiced eye at any market timing system being peddled by its guru-creator." (W. Scott Simon, financial author)

"Investors desperately want to believe they can time the markets, but the statistics tell an entirely different story." (Liz Ann Sonders, Schwab Chief Investment Strategist)

"Buying and holding a few broad market index funds is perhaps the most important move ordinary investors can make to supercharge their portfolios." (Stein & DeMuth, (authors & advisor)

"It's my belief that it's a waste of time to try to time any market decline, or try to pinpoint a market bottom." (James Stewart, Smart Money columnist)

"It's a staple of personal finance advice: Buy-and-hold, because trading the stock market is a sucker's bet." Larry Swedroe, author and adviser.

"People should stop chasing performance and just put together a sensible portfolio regardless of the ups and downs of the market." (David Swensen, Yale Investments)

"Trust in time and forget market-timing. Allow time to work its compounding magic for you. Let market-timing inflict its miseries on someone else." (Tweddell & Pierce, financial authors)

"Stay invested. Not only does buy-and-hold investing offer better returns, but it's also less work." (Eric Tyson, author of Mutual Funds for Dummies)"

"Few if any investors manage to be consistently successful in timing markets." (Wall Street Journal Lifetime Guide to Money)

"If you're considering doing your own market timing, the best advice is this: Don't." (John Waggoner, USA Today financial columnist)

"From 1963-1993 stocks returned an annual average of 11.83% for time in the market. Conversely timing the market or trading returned an average of 3.28%." (University of Michigan survey)

"We Believe market-timing and performance-chasing are losing strategies." Vanguard link

"If you buy, and then hold a total-stock-market index fund, it is mathematically certain that you will outperform the vast majority of all other investors in the long run." (Jason Zweig, author and Wall Street Journal columnist)

"I do not know of anybody who has done it (market timing) successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently." (Jack Bogle)

[lordxizor]

My advice would be to contribute to the max matching amount in your work's 410k, which it sounds like you're doing already. Next max out a Roth IRA, which I think is $5500, or maybe $5000. Then go out an start an account at and invest in stocks outside of a retirement account. Your best off just investing in index funds rather than trying to pick individual stocks. Chance are you'll never beat the market and you're going to spend a lot of time and money to earn less than just plopping it in an index fund and not looking at it for a year.

This is all assuming you're debt free. If you're not, pay off all your debt (except perhaps a mortgage) before doing anything outside of the 401k.

[orcus116]

I read 'Time to be an adult and buy socks' 

I'm glad I'm not the only one.

[rumborak]

I also have to say, whenever I read statements like "I beat the market average consistently in the last X years", there's two things at work:
1. Publication bias. Of 100 people investing in stocks, a small percentage of those will beat the market. Not so much by clairvoyance, but just as a law of averages would predict. So, who of the 100 people will tell you about their stock investment? Of course the people who did beat the market. The other 95 percent will just mumble into their beard "yeahthatdidntworkasiplanned". And, as the law of averages also tells you, those 5 percent's past success is exceedingly likely turn to failure sooner or later, bringing them down to the average.
2. Very likely they're sugar-coating it too. They might not tell you about their other stock investments that failed.

EDIT: Actually, there's a third one: The person telling you about stock X trying to generate interest in it so that the price goes up (thus improving their own stock investments), a practice called "Pump and Dump". Frankly, no offense to Blazinarps, but I can't help but getting that vibe here.

[orcus116]

My friend did that with his poker playing. You only heard about his few large victories, not his dozens of losses.

[Blazinarps]

EDIT: Actually, there's a third one: The person telling you about stock X trying to generate interest in it so that the price goes up (thus improving their own stock investments), a practice called "Pump and Dump". Frankly, no offense to Blazinarps, but I can't help but getting that vibe here.

No offense taken, although I would say that someone just starting to learn about stocks is not going to have enough money to invest to move the price (i'm guessing) 1/10000th of a cent.

EDIT: It just dawned on me that people in this thread likely don't know what Berkshire Hathaway is, and maybe that's where skepticism is coming from. It's the company headed by Warren Buffet.

No more plugging for BH, but it will be interesting in a year to look at the link I posted and compare BH to the rest of the market. I won't rub it in too badly when I'm right.

Typically you would see someone with like 2 posts doing that.

My other advice when you start trading, is to actually look at how much you're paying in a brokerage fee per trade.

If a stock is, to make it easy, $10 per share, and you pay, say, $5 per transaction, you need to figure that into your price.

If you have 100, you will be able to buy 9 shares, for $95, or 9.50 a share.

The stock will need to move up .50, or 5 percent, before you even break even.

That's a lot to overcome, so it would be best to wait until you can buy more shares before starting.

The more shares you can buy/sell per trade, the less the broker fee will play into your earn rate.
That should be obvious, but it's easily overlooked.

[jasc15]

I think most posters here know of BH, and also know that most of us are not Warren Buffet.

[Chino]

Update. I finally got around to dropping some money into the market. It got put on hold shortly after I made this thread last year because I decided to buy a house instead. I'm still not willing to put a few thousand in at the moment, so I figured I'd just mess around with a couple hundred just to learn the Fidelity site and see how everything works. I'm aware that what I am about to say comes off as irresponsible, but I'm fine with that. I'm looking at it as though it's a trip to Mohegan. There have been a few Marijuana related stocks I've had my eye on for the last six months, Oxis International especially. It's currently trading at $0.024 per share and has seen 350% growth over the last year. I bought $200 worth of this particular one. They've recently acquired some new talent and a new CEO that have done wonders for similar companies over the last several years (taking shares that sold at $0.30 and brought them as high as $8.00). Honestly, I know it's not much different than just throwing money down on a roulette wheel, but I'm alright with that.

There's no question that marijuana stocks will start doing really well in the coming years (Alaska became the 3rd state to legalize today), it's just a matter of identifying which ones will be the heavy hitters. I'm having a hard time deciding on whether I want to invest in companies that are focused on the medicinal practices or the ones that are banking on legalization. If these stocks tank, no skin off my back, but if even a just one of them reaches $1.00 (I know that's easier said than done), I'll clean up.

[jasc15]

Don't fool yourself into thinking you can figure out the market and make money based on what you learn.  Folks are paid millions of dollars a year to figure it out, and they still can't beat market average.  Your reasoning may seem sound based on what you know, but there is a lot you don't know that puts you at a disadvantage.

If you are just putting in a few hundred to have fun, that's one thing.  But don't call it investing; it's gambling.

[Chino]

Don't fool yourself into thinking you can figure out the market and make money based on what you learn.  Folks are paid millions of dollars a year to figure it out, and they still can't beat market average.  Your reasoning may seem sound based on what you know, but there is a lot you don't know that puts you at a disadvantage.

If you are just putting in a few hundred to have fun, that's one thing. But don't call it investing; it's gambling.

Hence why I said "I'm fine with that. I'm looking at it as though it's a trip to Mohegan.". 

[jasc15]

Sorry, yes you did, and I read it.  I just feel very strongly about this and my alarms were going off and I had to extinguish the fire. 

[Chino]

It's all good. I just started my new job. On top of a higher salary, I'm also contributing 12% of my gross instead of the 10% I used to. The company is still matching the same maximum of 6%. Those I monitor more closely and take them much more, for lack of a better term, seriously.

[hefdaddy42]

My advice would be to contribute to the max matching amount in your work's 410k, which it sounds like you're doing already. Next max out a Roth IRA, which I think is $5500, or maybe $5000. Then go out an start an account at and invest in stocks outside of a retirement account. Your best off just investing in index funds rather than trying to pick individual stocks. Chance are you'll never beat the market and you're going to spend a lot of time and money to earn less than just plopping it in an index fund and not looking at it for a year.

This is all assuming you're debt free. If you're not, pay off all your debt (except perhaps a mortgage) before doing anything outside of the 401k.

This.  Paying off your debt is a HUGE investment in the future.

[Chino]

My advice would be to contribute to the max matching amount in your work's 410k, which it sounds like you're doing already. Next max out a Roth IRA, which I think is $5500, or maybe $5000. Then go out an start an account at and invest in stocks outside of a retirement account. Your best off just investing in index funds rather than trying to pick individual stocks. Chance are you'll never beat the market and you're going to spend a lot of time and money to earn less than just plopping it in an index fund and not looking at it for a year.

This is all assuming you're debt free. If you're not, pay off all your debt (except perhaps a mortgage) before doing anything outside of the 401k.

This.  Paying off your debt is a HUGE investment in the future.

I have no debt outside of my mortgage. Well, no, that's not true. I still owe $700 on a rowing machine I bought a few weeks ago, but I'm paying above the monthly minimum on that, and when my tax return comes in, I'll just pay the rest off in a lump payment.

[Kotowboy]

Closest I'll ever get to buying Stock is gravy granules.

[Prog Snob]

The first five times I read this topic title, I thought it said 'buy socks.'