10

This might seem like a silly question, but I have a few things that make this quite difficult for me.

  1. I do not live in my home country and the market here is not a market I would like to be investing in. Good place to live though.
  2. I have been fortunate to always generate a good income by focusing on my core skills, but this focus has left me lacking in understanding of the investment mine field.
  3. I do not know what the best options are in terms of getting advice on investment planning etc. Trust issues? especially locally.

Are there companies I should be approaching that can help me on the right track with out taking me to the cleaners on fees etc.

  • Can you indicate the countries involved? – user296 Nov 21 '10 at 0:43
  • @fennec, I am from South Africa, but my family and I live in Cyprus, an island in the mediterranean. – Chris Taylor Nov 21 '10 at 7:37
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Don't do it until you have educated yourself enough to know what you are doing.

I hope you won't take this personally, but given that you are wandering around asking random strangers on the Internet how to "get into investing," I feel safe in concluding that you are by no means a sophisticated enough investor to be choosing individual investments, nor should you be trusting financial advisors to choose investments for you. Believe me, they do not have your interests at heart.

I usually advise people in your position to start by reading one book: A Random Walk Down Wall Street by Burton Malkiel.

Once you've read the book by Malkiel you'll understand that the best strategy for all but the most sophisticated investors is to buy an index fund, which simply purchases a portfolio of ALL available stocks without trying to pick winners and losers.

The best index funds are at Vanguard (there is also a Vanguard site for non-US residents). Vanguard is one of the very, very, very few honest players in the business. Unlike almost any other mutual fund, Vanguard is owned by its investors, so it has no profit motive. They never try to pick individual stocks, so they don't have to pay fancy high-priced analysts to pick stocks.

If you find it impossible to open a Vanguard account from wherever you're living, find a local brokerage account that will allow you to invest in the US stock market. Many Vanguard mutual funds are available as ETFs which means that you buy and sell them just like any other stock on the US market, which should be easy to do from any reasonably civilized place.

  • +1 for so many things: Do not jump into investing until you have learned about it. Financial advisers do not have your best interest in mind. And, if you are not really into it, but do have faith in the overall market then low-cost index funds are the way to go. The Motley Fool has been suggesting that for many years now. Well said, Joel. – George Marian Nov 21 '10 at 4:12
  • I definately don't take it personnally :), in fact I agree. The advice you gave above is prtty much what I have come across anywhere. Trust me, I do not intend to take the responses I get from strangers as gospel, but rather to use the responses as pointers for things to start investigating. Thank you for your advice. – Chris Taylor Nov 21 '10 at 7:26
  • @ChrisTaylor Another book that is particularly good on the subject is The Four Pillars Of Investing by William J. Bernstein. Malkiel's book is excellent but I find Bernstein's more approachable as a first read. amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/… – Chris W. Rea Nov 21 '10 at 14:02
  • It seems you are promoting Vanguard. I maybe wrong, but are you involved with them in any way ? You should put a rider on your opinion. One guy's heaven maybe other guy's hell. – DumbCoder Nov 24 '10 at 14:07
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    I'm just stating objective facts. For people that don't know me, I am the CEO of Stack Overflow, the company that operates this site. I do not work for Vanguard or any other financial services company. – Joel Spolsky Nov 24 '10 at 15:08

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