Fund picks and pans stocks

Potato Head says:

S&P 500 Index. Vanguard has one with a $3k minimum.

George Kaplan says:

Now is absolutely the time to invest, provided you don’t need the money for 5-10 years.

The minimum you can invest depends on where you have an account and what you buy. Mutual fund accounts often have minimums (in the $1,000 – $10,000 range), but discount brokerages usually don’t.

As for index funds, go with ETF’s. They don’t require a minimum to purchase, trade like individual stocks but hold a diversified collection of stocks (like mutual funds). You only need 3 for good diversification:

Vanguard Total Stock Market ETF (VTI) (U. S. companies only)
Vanguard FTSE All-World ex-US ETF (VEU) (foreign markets)
Vanguard Total Bond Market ETF (BND) (bonds)

You’ll have to research what percentage to allocate to each, but many suggest:

Stocks : take 120 subtract your age and that is the total % in stocks. Of that, split it 60-70% in US, the remainder in foreign.

Bonds: the remainder of the first percent.

So, if you are 35 years old, you have (120-35) 85% in stocks and 15% bonds.