How Should YOU Invest Your First £10,000?
Have any of you seen the show Mad Money? Well the show’s host, Jim Cramer, has some great advice on how to invest your first 10,000! We all know that in today’s market your best shot at getting rich is to starting investing, and do it as soon as possible!
The biggest asset for young people is time! All helped along thanks to the perks of compound interest!
But now you know that you should invest but now the question is where you should be putting your extra money when starting out as a young investor.
Jim Cramer has recently answered this question for you. His advice is to: “Invest your first 10,000 in index funds”
“Index funds are a type of mutual fund pegged to a stock market index, such as the S&P 500”.
He noted that years ago before the financial crisis of 2008 he would have given completely different advice – Take your first couple thousand and invest in four or five different stocks.
But he has seemed to turned a leaf as he states “Now I’ve change my tune a bit”, “I want the first 10,000 in index funds because I feel that the market is so unforgiving and that if you have two bad stocks out of five you could get hurt. But once you’ve saved 10,000, then you have some mad money, and they you can be diversified with some stocks”
However, you need to watch out for the stock fees that can bite away at your investments. Yes, fees are unavoidable, but some fees are much, much lower than others and so result in less of a burden. So my advice to you is that you want to invest in the low-cost funds.
As for Cramer’s top picks, he recommends Fidelity Contrafund and Fidelity Magellan, both of which have reasonably low costs.
But the best thing you can do right now is to do your own research into the market and make a calculated risk off that when deciding how to invest! But remember, the sooner the better. So what are you waiting for, start saving and then start investing! Good Luck!