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Plugging into Your Portfolio

  You hear it from your folks or anyone who starts talking shop about money with you. “The sooner you start investing the better,” they say. Then they launch into a chat about their portfolio and how it’s looking today, and how much money they’ll have when they retire. You decide you want to build one of these miraculous collections of stocks, bonds, and mutual funds so you can say how rich you’ll be when you retire, too. So how do you go about plugging those dollars into a portfolio in today’s market? Well, YB’s got some steps for you to take that will lead you into investment-ville.

Investing Options

To get that portfolio plugged in, you’ve got to invest in stuff. Right? Of course, but where do you buy what? There are several choices for investing, it’s not all just about stocks. If it’s bonds you’re looking for, try those friendly folks at the bank. Banks can hook you up with savings bonds, or if you want to start a savings account, you can earn interest on that. Savings accounts are pretty safe, but the payoff is pretty low.

For mutual funds or even individual stocks, you might check out a brokerage. These are places like Merrill Lynch and Chase. Brokerages like these can be almost full-service stops. Brokers can put your money in mutual funds, money markets, and stocks on the market and manage it for you if you want a pro to make your investment decisions for you.

Got some specific companies picked out and want some of their stock? Into handling decisions for yourself? Launching online and setting up an online trading account may be for you. There are several online traders, so look around for a while before just diving in on one. A few places you can trade online are Sharebuilder and E-trade.

Remember, if you’re under 18 you’ll need to enlist your parents in getting you set up!

Plug in and Stay-Tuned

Now you’ve picked your picks and built a portfolio you feel is a hot rocket to eventual riches. Time to go back to watching Cartoon Network? No way! You need to keep an eye on your portfolio, especially if you’re walking on the more risky side of investing.

If your investments are managed, keep in touch with your investment manager (the people you invest with will have one for you). Get the heads up from them. If you’ve got a lot of stocks you’ve invested in on your own, keep up with the news on TV or the papers, and check out Web portfolio tracking tools. Places like Microsoft’s Money Central or Quote.com have portfolio tracking tools online.

Use some of these methods to keep an eye on your investments. Just remember, staying in for the long run is the better option. Don’t bail at the slightest piece of troubling news; it could cost you in the future!

The Wonderful Land of Risk

Whenever you start investing, you’re entering the land of risk. You’re risking that the money you put in might disappear on the chance of it making money over time. Usually, the more money you build in interest, the bigger the risk to your cash. Before you dive in and start putting together that portfolio, you have to balance how much you want to gain over time with how much risk you want to take with your hard-earned cash.

One good way to balance out your risk load is by diversifying, or spreading your cash into several different areas, both low and higher risk. Shoot for an average amount of interest you want to gain each year, and balance out your money for the lowest-risk way to get those returns.

Last but not least, start soon! The longer you can have that money working for you, the better.