Expert: Paul Henneman - 6/9/2006

Question
Dear Mr. Henneman,
I am a Junior at UW Oshkosh.  I would like to take a little money(that is all I have, ha ha)  and put it some were like an IRA or a roth IRA for the furture.  I have about 1,000 to put away.  I don't need the money now so it could sit for years.  I just want to see something become of it.

Thank you

Answer
Hi,
   Thank you for your email and question! The best thing for you, I believe, would be to consider a mutual fund. Specifically I would suggest an index fund based on the S&P500.
   The problem with many investments is that they must be monitored. Things change, and you would have to research, and track your investments and make adjustments according to market changes, and changes in the specific investment environment that would occur. But it sounds like you are looking for an investment that could sit on its own for a long time, and not require much thought during the process.
   An index fund is designed to trade and copy the overall market. The S&P500 is perhaps the most stable index, and is the best one for such an index fund. The fund can at times drop in value, but over time and in the coming years will grow and offer you a good return on your investment. There are typically not much in terms of fees to buy an index fund.
   The best website to research mutual funds is www.morningstar.com  Once you find the index fund that you want to purchase, this can be done on most online brokerage firm websites. My favorite is www.FOLIOfn.com, very low fees. You would not need one of their monthly fee accounts since you would only be making one purchase. It would be better to pay the single trading fee instead of the monthly subscription fees.
   I hope this helps! Please do not hesitate to follow up with me if I can be of any further service,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
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