New Investor - Newbie Question

[theMINI]

Hey everyone,

I am a full-time student (so I don't work) and I am getting $15,000 for my birthday next week. I want to invest it but I am not sure what I should do... My friend told me that since I only have 15k I should invest 5k in gold stocks, 5k in financial (like manulife) and 5k in telecommunications...

Basically I want to invest my money in order to make more money. Eventually I want to be able to live comfortably off of my investments and interests. I am only 22 years old so anything about retirement or any longer investment goals seem unnecessary right now.

What would you guys do if you just received $15,000 and want to be able to make more money relatively soon in order to invest some more? Remember that I don't have a job or any other way of making money, this is basically all I will have until I finish my studies.

Thanks.

[MikeKlenner]

Hi..

I am also a student. If I got such i will definitely invest it in some sort of stocks which could yield me more money.

[LafserMarketplace]

Don't invest it all at once. The market goes up & down, and you are better off buying in increments. Btw, gold is near an all-time high. If you bought today and it dropped 15% tomorrow, what would you do? Instead, invest a percentage of your gold investment now, if it goes up over the next month, buy a little more. If it goes down, buy more. If it goes further down, buy even more and get the advantage of dollar cost averaging. If you want to buy gold, I would recommend buying ticker GLD, which is a golf ETF that tracks the price of gold.

As far as telecom, I would not recommend putting 1/3 of your money in telecom. Instead, I would spread it across a few firms, each from a different industry so you create a diversified stock portfolio

I'm not sure about the 1/3 you are earmarking for Manulife. Bonds can be dangerous as the value goes down as interest rates rise, and rates are near an all-time low. If you are looking at life insurance, consider a different investment. Instead, I would recommend putting a majority of the remaining 2/3 of your money into solid, dividend yielding stocks.

If you are interested in building a stock portfolio, you might want to consider buying stocks of stable companies that pay a dividend. You won't get rich quick like you could speculating on the next hot stock, but you won't lose all of your money either when it implodes like the banking stocks did in 2008, or like the dot.com stocks (also known as the dot.bom) stocks did in 1999/2000.

If you aren't familiar with accounting or finance, you might consider taking a class or buying a text book. It's extremely helpful if you have a general understanding of a balance sheet, income statement and cash flow statement. This will enable you to look at information provided by firms when they file their quarterly and annual reports. (Another option is to buy the book we are close to finishing which puts this material into a very basic, easy to read ebook). It's also good to do some prep work to better understand the company and how it is doing versus it's peers.

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