I will definitely look into a money market accounts (probably getting some cds from my bank). I am trying to absorb all this information from all possible sources because it does seem like a lot to learn. If I shouldn't focus on ETFs as my main investment what should I do once the market starts to calm. I do understand that right now the market is very shaky but isn't that a good time to start buying? Or am I being naive in embracing fully the buy low, sell high philosophy. Also what are the opinions on VTI Vanguard Total Stock Market as a broad based fund. I am sorry for all the questions I am just excited about starting to invest for my future and I just figure its better to ask people that know what they are doing.

The problem you will have with ETFs is the brokerage fees if you plan to invest 1-200 per month.  That is why I suggested Vanguard mutual funds.  Vanguard Total Stock Market mutual fund would be a good start.  It would give you the whole U.S. market in one fund.  Once you open a mutual fund, you can add to it monthly without any fees involved.   Next open an international fund to cover the foreign developed countries.  Schwab some years ago, developed a philosophy called core and explore.  It used index type funds for the core part of a portfolio.  Then add a small percentage of an aggressive managed fund to try to boost the return.  The hardest part you will have is saving for the initial opening amount for each fund you want.  Any more questions, just continue this post.  Best of luck.

Robert

One thing I didn't ask is your reason for investing.  Will it be for retirement as in a Roth IRA or a taxable account for buying a house or condo later.

My previous post is not to convince you to not use ETFs but to delay you until you have more money invested.  The trouble with ETFs is the brokerage fee for buying or selling.  Unless you buy or sell at least 100 or more shares at a time, the transaction fee really digs into your profits.  That is why I suggest Vanguard's index funds.  I have used ETFs now for quite awhile  and find it a great way to invest in a sector or the whole market.  It just took a few years to accumulate the money to invest in them at a reasonable cost.

 

Here are my opinions: In all respects except one, I agree with try2win. I do believe that now is a fine time to invest - I do not agree that you can or should try to time the market (that is what try2win is indicating). So, you could start investing now, but as try2win says, you need to gather some more cash and consider what you are investing for before buying ETFs.

Right now, you must plow any available cash that you have into your 401K/IRA and use broad market (For your age I suggest US 40%, INTL 50%, EMERGING MKTS 10%) - that would be 3 broad mutual funds with low expense ratios (Vangaurd is the best). If you are going to school and working part time or are self employed, open a ROTH IRA at Fidelity and max it out. Use Vangaurd mutual funds if you can.

After you have totally maxed out your 401K/IRA and want to invest more, that is the time to start considering ETFs.

If you really want to do some "smart" gambling in the market (instead of blowing $200 at a casino or a bar), play with options. You may get lucky and be a big winner. The odds are stacked against you but you may find it fun and you will definetly learn a lot. I actually got very lucky and made a million or so in the 1990s. But you need to always remember that you will most likely lose any money you invest in options - but IMO the odds are way better than at the casino! and man-o-man that is fun!

Anyway - before you play with any hard earned cash, max out your yearly retirement account(s) FIRST.

Note also that there is a school of thought (and some compelling scientific data) that would indicate that at your age that you could actually borrow money, invest it in the broad world market, and make a killing - all because your time horizon is so long. You could easily buy and hold an investment for 40 to 50 years! Old guys like some of us that have a lot of experience can not consider that. (Why is youth wasted on the young?!) I wonder if it is legal to get a student loan and buy ETFs with that...

(BTW, if you own your own company, invest all you can in yourself, those returns can be really great.)

So, max out your retirement accounts in your 20s and you should be a multi-millionaire in your 50s. And, don't forget to eat right, exersize, and do a good deed - everyday!

Good luck!