I just started graduate school (physics), and for the first time in my life, I know I have a steady income for the next 5-6 years. I don't make a lot, but I'm very froogle, so I can probably save about 10k/year. I've read Mr. Lichello's book, and it sounds like a good strategy for investing, but I do have a few questions. I was hoping some seasoned AIM users could chime in with their knowlege.
1) I was thinking of making my first investment an ETF--probably a SPDR, or an S&P 500 small-cap index fund. My reason for doing so is that Robert Lichello used the DJIA as an example for AIM in his book. However, I'm wondering if a SPDR will provide the necesarry volitility to make AIM work.
2) I've read a lot about how commissions and fees can eat into one's profits. Is there a minimum amount one should invest in a security in order to gaurantee that profits aren't canceled out by fees? I've opened an account with Scottrade, so it will cost me $7/trade (limit or market).
3) I've considered putting my investements in a Roth IRA. My problem is, I'm just not sure I want to lock my money up until I'm 60. What if I need that money some day (I'd like to start up my own business down the line, and that take dough)? If I borrow money, the interest on that will likeley be higher than the money I make in the stock market. That doesn't seem to make sense to me. Do I really need to worry about taxes? The way I look at it, if I'm paying taxes, that means I'm making money.
4) Regarding my investment plan, I was going to systematically start individual AIM accounts for different commodities. For example, once I've saved up $5k, I'll start an AIM account for a SPDR. Once I have another 5k to invest, I'd start and AIM account for something else, say an emerging market ETF. I would continue this as long as I can, diversifying as I go. I was going to manage the AIM account on a limit order basis (i.e. calculate buy/sell points rather than evaluate my portfolio month-to-month). Does this sound like a good plan? Does anybody have an suggestions as to how to improve this plan?
5) Lastly, have people on this board have success in selecting individual stocks? By successful, I mean you've made more over time on stocks than you would have investing in index funds alone. If so, is there a place where one can find free information on stocks (beta, ATR, etc.)?
If you want to address anything that isn't on my list of questions, feel free to do so. I'm a novice, and I'd like to learn from other rather than learn from my mistakes. Thanks so much for any advice you can offer.
Matt Lorig |
