bobmsmythe

First off, I'm assuming you aren't carrying any outstanding debt. If you are, then that has to be step one. If you're paying 10% on your credit card, paying that down is the same as investing you money and getting 10% back. Now, you're in your early 20s-- should I assume you're looking at buying a home at some point? If so, you're going to want to keep your assets relatively liquid so that you can get that money into your down payment when the time comes around. I'm pretty bearish on the stock market right now, as you can probably tell. There aren't too many brokerages that will let you open an account with $1,000, anyway. Even those that do will charge you commission to trade. The cheapest of discount brokers are going to charge you about 10 bucks per transaction (I know there are cheaper, but they don't usually operate starting at the $1,000 level). So just to ante in is going to cost you 1% of your capital. Then when you want to get your money back, it's going to cost you another 1%. So already you've put yourself in a 2% hole. That's without even talking about the downside of the market.

If you plan on being able to invest some amount of money on a regular basis, and don't need to pull it out, you might want to think about an IRA. That has the advantage of being tax-sheltered, meaning you don't pay income tax on what you make, if anything. But from what you're describing I would say your best bet is probably something like a treasury bill-- it's safe, it's secure, and it's guaranteed. You don't need a broker to buy them and you can get your money back at any time.

Overall, stocks are a good investment, and you're right to want to diversify (as the spiders do right off the bat). But the short term picture doesn't look that great. Unless you're prepared to really sock that money away for the long haul, I'd keep it out of the stock market.

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2. I'm currently working on a BBS in Finance. Once I graduate, I'll be doing 4 yrs in the Army as an officer. I plan on staying in the Army until retirement but just in case I change my mind, do you have any advice on getting into the industry?

Best way to get into the industry is to know somebody already in the industry. Second best way is to major in business or economics and try to take internships through college. Honestly, it's really, really hard to get in right now-- everybody is cutting back. Hopefully in four years it will be better. If #s 1 and 2 are out, I'd recommend trying to locate individuals at companies for which you'd consider working and finding out which ones served in the armed forces. That can take you a long way.

Bob