Experts give advice on investing strategies
Students can achieve their financial goals easier by making decisions early
Emily Hartwig
Issue date: 2/20/06 Section: Money/Health
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"I look for companies with little risk that will grow gradually," Lowenberg said.
If a student doesn't know where to start in the investment world, some advise looking at the actions of top investors.
According to www.investopedia. com, Braden Glett, a top stock market strategist, recommends that people refer to new 52-week high lists to pull together a list of prospective investments.
These lists provide people with information on companies that are doing well, and can be a good starting point for personal investments, according to the Web site.
"Look for mutual funds," said William Ogden, a professor in the accounting and finance department.
He said mutual funds are generally for people who want to be in the market for a longer period of time, since it is difficult to pull out quickly, but are good for students who want to get a head start on their future.
In particular, he recommended investing in a market index, which follows a specific group of stocks.
Ogden said a market index doesn't require much management skill and the fees are low. In addition, since the investment is spread out among many interests, when one company takes a hit, the loss will average out and won't drastically affect the overall investment.
He said adding companies to a portfolio one-by-one can be risky because then the investor is riding a "rollercoaster."
"(Mutual funds) diversify your money for you," Lowenberg said, who has invested money in Washington Mutual Funds for four years. Mutual funds are opposed to investing in companies directly, she said, and it minimizes risk.
She said students should do research on the companies they want to invest in, including looking at income statements, since publicly-held companies are required to provide these.
"You can go to different banks that will give you advice," she said.
Ogden said one problem college-aged people face is coming into a significant amount of money through an inheritance.
In this case, he said, the student should look into investing the money so it is secure. He said he knows of some students who have taken risks in the market, but he thinks that this is the exception to college students' investing habits.