I wouldn't bother trying investing yet with only a couple hundred 9duece. The transaction/commission costs will almost insure you will see negative returns on that small amount. Just park it in a moneymarket account for the time being until you can build that amount into a good 4 figure sum. You can still paper trade or find websites that allow you to invest in stocks/funds with play money in the meantime.

I would think about better diversification (you have 0% in bonds) even if your risk tolerance is med-high, but maybe think about being more aggressive by investing more in small cap than originally planned. Your current 80/20 in large and small is not what I would consider aggressive for someone who says their risk tolerance is med-high. Check out the discovery fund though and think about investing a small amount in it.

With such little knowledge of you, the investor, I can not give you recommendations for your allocation. I do have two recommendations though: 1) Do not listen to the above response to your post that says to keep it in a money market. 2) shy away from the freedom (year) funds

I don't think there is any obvious way for you to easily keep close to the same expected return while moving significantly away from stocks towards some other basic, index-friendly investment options. If you move towards bonds you will lower the expected return. Maybe you could rebalance more broadly across different markets but your current allocation sounds reasonable and maybe it would just make it worse -- I'm sure there's research out there on this but I don't know what the "answer" is here.

Your basic instinct is really good though. The idea that "if I get exposure to multiple pretty uncorrelated asset classes with high expected returns, I will get a high return with less risk" is basically what David Swensen at Yale came up with two decades ago to make himself famous. He's investing in stuff like timber and private equity though -- which is tough to do unless you're wielding institutional money.

Also, are you planning on living solely off this money or are you going to get a job or do something else? If you will still have income you're still really young and may be in a position to keep up a risky profile and not worry too much about the shorter-term swings.

This one is more an accountant's territory. I think the answer is basically going to be no though. Certain kinds of municipal bonds are tax-free, which means the interest payments you get from them aren't taxed. But that won't help you avoid income tax on the poker income you earned -- it just means you'll get some tax-free interest (and yes, that interest will generally be lower than the taxable interest you could get, as markets do try to adjust for this). You could talk to an accountant about any kind of tax-advantaged retirement accounts you could set up this year (401Ks and SEP-IRAs) -- again probably won't shield most of it but the law is weird especially for the "self-employed" and it's worth investigating.

Country you live in-USA
Income-38K
Risk Tolerance-Med-High
Timeframe for investment-40 Years
Debt-$1200 CC
Any other information you might have that would help us-Just graduated college (23 years old), start job in June, have 8K sitting in checking account. Housing is cheap ($500/month), and hope to net around 10K yearly on the live pokerz playing on the weekends/whenever I get the chance.

The main questions I have are:

-New employer offers a 401k match, should I immediately contribute the full amount I can?

-Should I put some money (of the 8K I currently have) into the market or put it into a savings account?

-How much of my paycheck should I be putting away into savings/investing? 10-15%?

Go talk to a financial advisor and ask these questions.
-Yes you should take full advantage of the match.
-Take a look at investing in a ROTH.
-As much as you can while not lowering your standard of living.

Thank you, much appreciated.

Pay yourself first.

You will find that left unchecked, your expenses will find a way to always grow to consume all of your disposable income.

Likewise, if you pay yourself (savings) first, you will find that you will adapt to live on what is left. Don't just set your contributions at x% and leave them either. Next year when you get a raise at work, commit 1/4 or 1/2 of that raise to increasing your saving.

Even when we were a 1 income family and I was putting my wife through law school we maxed out 401(k) and set aside other monthly savings. Things were tight enough that we cancelled cable for a couple of years to make ends meet. Today, I have zero regrets for what I might have missed on TV but our savings is easily on target for a comfortable retirement.

So, I advocate living beneath your means early in life so you can take advantage of decades of compounding interest and live above your means later in life.

Thanks for the advice, I might move some out of the contrafund and into some small cap/discovery stuff.

I think I know what DuffMan is saying, the 4.95/trade fee is going to kill me if I am only buying $200 worth of stock. I know it's -ev but with just $200 for now, i want something to gamble with/entertain me. I'll work on trying to be smart with my 401k money.

Thanks for the advice. This definitely makes sense. I switched to Netflix ($8/month), and usually just go to a friends' house or bar for sporting events I want to see. Making small cuts seem trivial, but they definitely add up. Since making a simple budget sheet 6 months ago, it has made it much easier to plan, save, and see what I can adjust.

Also, the personal finance leaks thread has a ton of great advice, especially for rookies like me.

pay off the credit card if you haven't

if you're looking for a gamble, stick it all into an ETF that tracks silver or a related commodity as they've been very liquid and very volotile this year. Good chances to study and learn from their price graphs.
GL

Remember, he said "gamble". There's more risk involved with this advice than normal. Just wanted to warn ya.

invest in my grad school education. guaranteed returns

If considering this advice I make sure you have a bankroll of at least 30 BI's.

A possible bad beat that could hurt you would be the raise of the Fed fund, which MANY investors believe will happen soon/ should have been done a while ago. This could cause a drop in commodities' prices.

NJ, Age 24, Poker Player, No house, No debt, Pay quarterly Taxes, Risk Tolerance- medium. I have 72k in Sep IRA,130k in stocks, 140k+ in savings, Poker accounts are about 100k + FTP and UB money ill never see. Real question is i have a LOW risk account ( mainly municipal bonds) that some snub nosed broker takes care of ( or lack there of) that my grandfather left for me , roughly 180k, I wanted to know where I should take that money if i'm not looking to invest in a house for about 2 years.

• Country you live in: USA (Miami, FL)
• Age: 25
• Status: Married
• Amount to save: Around ~$3000/mo
• Risk Tolerance: High
• Timeframe for investment: 3-5 years
• Debt: None
• Purpose: Buy a house/apartment/condo

Hi everyone,

My wife and I already have about 20k in a savings account, and I hate the low interest rate. I'd like something with a better return that we could liquidate in a few years when we're ready to settle down and buy a place.

Thanks!

If you think it could be 5 years before you need the money it could be worth your while to invest in a diversified portfolio. Do NOT put too large a % in the market.

Walmart is offering a 10% dividend yield, plus the core stock value is going to rise. It's a great buy, go for it.

did you seriously take the 2.6% dividend (for the year) and multiply it by 4? The dividend is 2.6% and you sure provided a lot of evidence as to why you think Wal-Mart is a great buy.

that may have been one of the worst posts I've ever seen

Yes, the dividend is 2.6%, but wort post ever? C'mon man.

despite getting the dividend wrong I dont think putting a large chunk in WMT is bad.

Well, I like Walmart because its one of the companies that Warren Buffett has surpreme confidence in. Similar to sports betting, my strategy with stocks is to look at who the most successful investors are, and take their advice.

LT22 - is that so bad? Did I really make the worst post ever?

Warren Buffett aside, Walmart also enjoys centralized ownership. The Walton family retain their near-majority ownership of a 200B company which is extremely rare for most corporations. This is important because it means the company doesnt get stuck in corporate bureaucracy - it very much moves in the direction Sam Walton's descendants want the company to move in. That's very important to succeed (look at what happened to Microsoft in recent years).

In the next 10 to 20 years you can pretty much count on Walmart not to go anywhere. Very nice and consistent dividends that grow, with the core stock set to grow as well, I think it's a nice buy. And I don't think thats the worst post ever.

Telling somebody to buy a stock b/c it has a 10% dividend when it's 2.6% is bad

Telling somebody to buy a stock w/out giving a reason is bad, you corrected that by explaining your reasoning. The only problem I have with Wal-Mart is that everybody and their brother knows about Wal-Mart. I haven't run the numbers on the stock, but I'm going to assume it is quite efficiently priced. I do like that Wal-Mart should be low-risk to go bust and shouldn't be too volatile. Buffet (and I) prefer to find good companies like Wal-Mart when they are well under value. It might, however, be a great stock for somebody who doesn't take the time to analyze companies.

Dude, there you go again with the personal insults.

It might be a great stock for somebody who doesn't take the time to analyze companies?

So if you buy WMT stock you are somebody that doesn't take the time to analyze companies? Chill out already man, I'm trying to be productive and you keep insulting me.

I made a mistake on their dividend yield because I could have sworn I read on Google Finance awhile ago that it was 10%. Did they recently cut down their dividends? Was it ever that high at some point? It was an error man, geez

Also: with a P/E ratio of 13.18 (where you can say avg. is about 15) it is underpriced as is right now.

So you dont think Walmart is a good buy? Your comparing yourself to Warren Buffett; Warren Buffett is the one who is buying more Walmart stock. Its in his annual and quarterly reports how many shares of which companies he's buying, and his ownership of walmart has been on the rise.

It's not fast money, if that is what you are looking for, but it's good money, and it's safe money... I think it's a good buy, their not going anywhere.

facepalm

((((It might, however, be a great stock for somebody who doesn't take the time to analyze companies.))))

I mean there are probably better buys out there for people that are willing to do research. It wasn't a personal insult calm down.

RE: Dividend yield, no the div yield has never been that high nor should it be if they are amazing company they are much better served keeping the money in their hands and reinvesting it

P/E ratios are useful, but they are not the reason to buy a stock