Investing Little By Little
February 17, 2007
I made my second investment of the month on the 15th: I bought a 30 year Treasury Bond in the most recent auction on TreasuryDirect. It’s a very small bond, but it’s a start, and they’ll send me money every six months. I know that bonds are a conservative investment, but that fits my investing profile. I’ll probably be thinking about index funds next.
There’s conservative, and then there’s money loosing investments. If you’re going to make an investment with a 30 year commitment, you should be considering something that will pay a better rate than under 5%. Since you’re young, you should be looking for growth rather than income on your investments. Treasuries and bonds are great for a small percentage of your portfolio, but for the under-35 set your total allocation of those types of assets should definely be under 40%, and probably even closer to 10-20%/. For a low startup fund, take a look at the Vanguard STAR fund ($1000 minimum). If you have $5000, the Vanguard Lifestrategy growth fund or the Total stock market fund would be worth looking at. I can highly recommend the Bogleheads’ Guide to Investing for much more detail.
But I do want income from my investments, and I’m not in the under-35 set. And this is way under 40% of my investments; actually it’s under 10%. But I do have that book on my list of things to check out :)