Investing is really quite simple. I don't know why everyone is making it sound so complicated. Here's the scoop: First, as Nalod said, either hire a professional adviser, or educate yourself to make good investment decisions. Then, invest regularly over a long period of time. For example, if you could invest $5,000 per year for 30 years, you'd have invested $150,000 dollars. However (here's the wonderful part) $150,000 is not the final value of your account. That final value is....

$4.95. That's right. Four whole dollars and ninety five whole cents! When you collect this princely sum, you will be glad you invested that money instead of wasting it.

Hopefully our politicians will get their act together and allow us to start investing our Social Security money in the stock market too.

Posted by loweyecue:

That last post by Nalod has some good general advice, you do learn by doing. With all the information available it is amazing to note that only a small percentage of traders use fundamental analysis as the SOLE basis for trading, so called "gut feel" or intuition still plays a large part. But you absolutely have to do a lot of reading and research and it takes a good deal of time and can be confusing. So for someone not schooled in the complexity of finance this can be adaunting task. So Nalod's other advice about using professionals is not a bad one.

There are brokergae firms where you can "qualify" for some degree of "advice" when you have certain minimum balance in investment accounts with them and this can be as low as 50K. Not saying that everyone has 50K to invest just stating what may be available in terms of advisory services.

The third thing from Nalod's post that I agree with is that right now the indexes are close to 20 year lows or something such. And that is not the direction you want see things going when you are invested in index linked MFs or ETFs. But the case for diversication is made easy by this, if you look at most Mutual funds that focus on a sector most of them are down a lot more than the indexes are. The purpose of diversification is to minimize risk (volatility) but it works both ways, it also means the indexes dont go up as much when the trend is upwards.

If you want to read about investing basics there is some good information out there, try Fidelity.Com --> Research, Bloomberg etc. Yahoo finance and Google finance are also both good for watching day to day market trends. Use Investopedia.com if you need to understand some of the jargon that's used in these articles.

Thanks for the response. I pretty much figured that I can't talk to a professional, and still have some quite some time to accumulate 50 K, which is why I am just reading and seeing what kind of decent/good investment I can make with the little money I have. I am curious, what kind of advice do these expensive professionals offer? Do they offer advice or do they give you the options to invest in hedge funds, or some other funds that requires some large initial investments?

I actually have taken some financial courses and learned some basic about deratives and constructing them. My international finance professor, a renown expert in the field, said stock/currency investing is like gambling with very large amount of money. Also, stock speculating (not talking about investing for appreciation and dividends) is a zero game, as in, in order for someone to win, someone has to lose; the big reason why financial companies are making money because of transactions fees. Also, a lot of those stock investors who makes it to the top, have some insider information or have enough resources to play chicken against countries and financial institutions. George Soros, the guy who broke the bank of England in the early 90's, was able to pull it off because he had enough money to pressure and bet against Britain's fragile Banking system at the time. George Soros is also a guy whose been accused of insider trading and have lost a lot of money trying to to bet against the Asian financial market in the late 90's. Not saying the guy is not smart and gutsy, but he's a speculator and has enough money and networks to play chicken with a country's bank and its currency.

Here's what Former Federal Reserve Chairman Paul Volcker think of him.

"George Soros has made his mark as an enormously successful speculator, wise enough to largely withdraw when still way ahead of the game. The bulk of his enormous winnings is now devoted to encouraging transitional and emerging nations to become 'open societies,' open not only in the sense of freedom of commerce but—more important—tolerant of new ideas and different modes of thinking and behavior."

http://en.wikipedia.org/wiki/George_soros#Currency_speculation

I probably have enough finance background to work for the financial industry, but good thing I didn't, or I would be unemployed or worrying about getting laid off. Even though I have taken financial courses, I understand these are just theories and didn't spend too much time focusing on taxes and transaction costs, which really can eat up your earnings. Well, enough of my rants, I just thought some of you guys might be curious as to what those financial guys learn in class. And my friends who were finance majors, they don't know much more than I do, in terms of what kind of investments to make. They just know that if you're rich, then you should buy hedge funds.

Thanks for all your help, and I will still have to look more into ETF, mutual funds, and bonds. I am not really aiming for incredible returns, just better than the rate I can get from Banks and CD's in a 10 year period.