Overall a good post. I agree with everything said in this one except for #4. Just because you invest in a mutual fund doesnt necesarily assure you of a return(especially long term). Mutual funds arent as safe as everyone makes them out to be. Aside from that, investing is still important…just learn how to read technical charts and be willing to study companies. Again very good advice you have here for those in there 20s.

I have to agree. The only mutual funds I own are in my 401k, and that’s because it’s my only choice. I own a total of three different stocks in my personal portfolio. I tend to agree with Warren Buffett; you’ve heard the saying don’t put all your eggs in one basket? Mr Buffett suggests you can put all your eggs in one basket, just watch that basket VERY close!

Hmm…stock based mutual funds are okay I guess but the problem with having them is that you can only make money in a bull market. Especially with a 401K, the only thing you can do is pray that the value of your stocks or mutual funds or whatever increases with time. I also think it is important to diversify. Put some money into real estate, either by doing your own real estate investing or purchasing REITs (Real Estate Income Trusts). Here in Canada we have a slew of REITs that specialize in a wide variety of income property, from office space all the way down to residential condos, etc. Another thing that I believe is important is to keep a portion of your retirement funds in precious metals. Precious metals are a good hedge against inflation and they WILL preserve your wealth at the very least, and you also stand to gain from the increasing value of the precious metals as the national currency continues to depreciate due to inflation, budget deficits and other financial problems.

However, if you have the determination I think overall it would be best to learn to be a trader instead of an investor. A trader knows how to make money even in a bear market by shorting a particular stock or currency. You will never be able to short anything in your 401K that’s for sure, so that’s why I say that these so called retirement schemes are just clever government tricks used to fool the people into putting their capital in the market while the “smart money” toys an short the very stocks you’re hoping would go up and up forever. They make tons of money by toying with the value of your investments, and they just repeat this process of buying at the dips and selling at the tops. If you can learn to harness the power of the market in this way you are far better off than just being a passive investor and a consumer of the so called “traditional” investment products such as mutual funds. This is however not for everyone though as tradiing for yourself is not a piece of cake.

Another good market to diversify into is the FOREX market. Do some heavy research and find a good MA (managed account) company who will trade a portion of your overall wealth in the forex market. You will be surprised how lucrative this market can be.

Lol..ok I better shut up now as I have this nasty tendency to go on and on and on..like that energizer bunny.

I had a nice chunk of change in some REI’s but had the good sense to take everything out before the bottom dropped. I think, over-all, I made money with them.

I’m not a traditional investor, in that except for my 401k, I don’t bother with mutual funds. I normally research my own stocks and go from there. Generally I stick with industries I actually know something about, so when I read the annual reports I understand what they’re talking about. I tend to go for long term investments because I don’t have the time to sit and watch my stocks beyond listening for news reports.

I tend to buy when the stock is low, and hang on no matter what. I focus on value stocks, ie Warren Buffett style. FOREX is something I’ve been looking at, but everything I’ve looked at is more interested in selling you something rather than teach anything.

Yeah REIs can be great BUT I always advise people to stay away from REIs that deal in residential properties as during bade economic times vacancies can really hurt a REIT’s bottom-line. REITs that deal with commercial properties are safe as usually the type of tenants they cater to are more financially stable and they usually enter into long term lease agreements.

Word of caution about FOREX - it is HARD! Prepare to do a lot of reading, learning and of course practicing. I guess that goes without saying as this is the general pattern when trying to gain any worthwhile skill, but the FOREX market is a finicky beast. If you aren’t careful it will eat you alive. Learn good money management skills as that will ultimately be the thing that will either make you or break you.

Start small with a mini forex account and play with REAL money (not much - like $10 to $50) and just trade, trade, trade and trade some more until you overcome your emotions. As you all know any financial market operates on two principles, fear and greed, so learn to conquer the former and reign in the latter and you will be a large step ahead of the “newbies” and “shark bait” (as the pro’s call them). As far as what forex broker you should start with, well, there are so many out there, but for absolute beginners I recommend Marketiva (I have a full review of it on my blog btw) since you can start with as little as $1 and they’ll even give you $5 free to get started. There is always InterbankFX which is another good trader but the absolute minimum account size for them is $250.

Find a system that suits you and stick with it. Test it out and learn it as see if it produces results. DO NOT switch systems every day of the week. In order to know if a particular forex trading system works and valuable you have to test it for longer period of time - I’m talking months here, if not years!

Also there are other venues you can explore to take advantage of the forex market, such as putting some money into Managed Forex accounts or buy ing one of those “forex trading robots” (some are pretty good and offer relatively low risk), or even subscribing to so called “forex trading signals”.

That’s all I have to say for now, so let me end this long post by wishing you many pips and success with your trading!

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