I live in an area where there really are no finance-related jobs for high school grads (local banks weren't hiring), so I ended up with a minimum wage job for the school district. I'll probably make about $2900 before taxes, and I know they'll wipe some of it out.
I'm going to a cheap, public university because I decided Dartmouth and NYU weren't worth the debt, so I'll be able to save what I earn this summer. I'd like to invest some of it, so I have a few questions:
Should I focus on mutual funds and stocks? How much should I allocate to each?
I know it all depends on the purpose and amount of risk I want to take on, but if you had about that much money to invest, how would you do it?
I know there are online simulators that allow you to invest much more, but I've used them and am not interested because I want to try to make some use of the money I earn and, more importantly, actually be motivated to research companies and markets while learning about finance over the summer. Not that they aren't helpful, but using a fake simulator would not give me the same incentive.
Errr, well Dartmouth probably would've been worth the debt, though I don't know what public university you're going to.
And I'd really do some research on investing. You've got all summer before you make the $2,900, so that'll be a good project for ya...
invest in a few stocks whose businesses you like after going through their 10k's. You'll probably have 2k after taxes, spending, and adding to your bank account. 400-500 bucks in 4-5 stocks is probably good, any less and transaction costs are cut gonna into you. Maybe take out a stock or two and invest in the S&P for general diversification if you don't trust your stock picking. Mutual funds are kinda a waste imo since you don't do any fundamental analysis and in general i'd compare them to the S&P since they have diversification requirements.
Also, treat this as a learning experience. When you start full time and make 70-100k/yr you're roll your eyes at any stress this gave you.
Finally, keep it simple. Don't go nuts with your stock ideas and analyze some small cap semiconductor company or some convoluted financial institution. You'll probably learn most reading the 10k's of companies you understand anyways. There are still lots of profits to be made in these companies. Finally, don't invest outside the USA.
Just my 2 cents
Dude. Go back and do EVERYTHING you can to get into these programs for next semester. A cheap public university will only allow you to keep doing what you're doing this summer for the rest of your life. You will have trading play money. You need ~$5000 for each stock you want to invest in if you're serious about going that route to allow for some diversification and decent profits. Open an account on Vanguard, and put all your money in maybe 1 (2 max) etfs and don't touch it for at least a few years. Read some books - One up on wall street by Peter Lynch, Intelligent Investor by Ben Graham etc. Whatever you do, before you invest, understand that whatever amount you decide to allocate to your brokerage account should be left in there for a few years. Do not go back and take some out. Once it is there, leave it there. Or don't invest. Investing is a long term process. You will not see huge gains and double your money in a week. It will take months, most likely even years.
One thing I've learned is to do your research, stick with your idea, even if it drops 10-20%, DO NOT SELL. If you did your research and you really believe in the company you just bought, BUY MORE. Do not sell in dips, buy. Although that applies more to individual stocks, the same principal can be applied to mutual funds and etfs. It's all about controlling your emotions, and having a deep understanding of the security you are buying. That's only the tip of the iceberg. Best of luck. Read, read, and read some more.
Michigan is the only one I've seen holding its own (especially for NYC opportunities).
Echoing Waymon3x6 and DM. Making price/debt the determining factor when choosing college is like deciding to take the bus instead of a cab because it's cheaper when you're in a rush to get to your own wedding. I.e. not a very important consideration under the circumstances and provided the potentially dire outcome.
wtf go to dartmouth wth are u doing man?
As far as your question goes, put 75% in vti and 25% in bnd.
If you need that money for school, you shouldn't be investing it at all. First rule of investing: don't invest what you can't afford to lose.
That said, it's such a small amount it isn't even worth getting excited about. Just throw $1000 each into an S&P etf and a REIT etf. Lots of people expect a crash to come soon though, so expect that money to disappear...
Invest it in the following: booze, drugs, condoms, sports/golf, clothes and gas money. You'll thank me later.
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