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Archive for Monday, February 4, 2013

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Go-Getter: Try investing

February 4, 2013

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It’s the time of year when you’re looking at your financial situation as you prepare to do your taxes, so it makes sense to think about investing your hard-earned money. A local expert told us how to do it.

Getting started

First, ask yourself why are you investing. This will determine where you’re going and what you should invest in. There are many ways to invest money, including stocks, bonds, mutual funds, real estate, gold and more. Make sure to evaluate your interests, income, time and goal amount before making a final decision.

“You need to know where you’re going before you get there,” Peter Knutson, owner and adviser of McDaniel Knutson Financial Partners, said. “Know your destination first, and backtrack from there.”

Cost

Depending on what type of investing you chose, it could be as little as $50 out of every paycheck. A financial adviser is also going to cost. Some have a minimum, which you should find out ahead of time, and some charge an hourly rate. Online trade places for stocks or mutual funds like E-trade Financial, Scottrade, TD Ameritrade Institutional are also an option. These websites are cheaper than an adviser because the investing is on your own. Knutson said these websites can be used if you’re confident in what you are investing in.

Experts and where to go

First ask a friend about who they have used to get a reference, Knutson said; also, look for how long an adviser has been in business and how many initials are behind their name.

Here are just a few local experts and online resources:

  • Reinhardt Financial Services, Inc., 211 E. Eighth St.
  • McDaniel Knutson Financial Partners, 2500 W. 31st St.
  • Rademacher Financial, Inc., 515 Rockledge Road
  • Wells Fargo Advisors, 1811 Wakarusa Drive
  • Yahoo Financial
  • Morningstar.com

Comments

Ron Holzwarth 1 year, 8 months ago

Here's another good tip: Read Warren Buffett's letters to the shareholders of Berkshire Hathaway. It might sound like boring reading, but it's not at all, the letters read like a novel, they are page turners. You do not have to be an accountant to understand them. Start at the beginning and read them all, then you will be an expert on most matters of investing. They are available free of charge here:
http://www.berkshirehathaway.com/letters/letters.html

And, there are two basic rules of investing. For a small investor, there is no excuse to not follow the first, but it's not always possible to follow the second:

1) Never invest in any investment vehicle that you do not thoroughly understand.

2) Never invest more than 5% of your portfolio in any single investment vehicle.

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Ron Holzwarth 1 year, 7 months ago

Something to keep in mind when someone is giving you investment advice is exactly why they are giving you that particular advice. It should be a warning flag to you if they are advising you to invest in only one investment that they control, especially if you do not fully understand it. Always refuse to invest ALL your money in only one investment!

There is an practice sometimes done by fraudulent stockbrokers called 'churning', where the stockbroker calls clients and advises trades frequently, and then collects a fee for selling and buying a stock each time. I am not sure how common that is, or if it is even illegal. It is never practiced by ethical trading houses. But, if you are using an online brokerage firm, or have an agreement with your stockbroker, it's all up to you, and so you can trade every day if you want.

So, after the fee is collected over and over, after a while, not much is left. That happened here in Lawrence a few years ago, fortunately under the name of a well respected brokerage firm. So, everyone's money was refunded, and the broker was kicked out of his job. But, always beware of a stockbroker that advises trades that seem very frequent, and get a second opinion, as you should for many other things.

Investing money is something that must be taken seriously if you want to be successful at it, just like anything else.

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