INITIAL INVESTMENT 

If you're just starting out as an investor, doesn't matter your age, it's kind of scary. You know you're supposed to do something with your money, but what? Where do you really start and what's considered safe? Here are a few thoughts.

First, you'll probably want a brokerage account. Many brokers will open an account with no minimum amount to invest. For a comparison of online brokers, please see: www.gomez.com It gives the services of the brokers, including an initial amount needed to open an account. Opening an account with a broker is a good idea because when you're ready to invest, you'll have all the paperwork done and can simply enter your order.

If you don't want to work with a broker, you can buy many stocks directly from a company. It's hard to find the advantage anymore of buying stocks from individual companies because commission rates are so low with online brokers, plus you have all your investments on one statement. But some investors still want to buy stocks directly from a company. For a good directory of companies offering direct stock programs, please see: www.netstockdirect.com

But stocks shouldn't be the first choice for a new investor. Instead think about a money market fund or a mutual fund. A money market fund is a great way to park your money and earn interest before you make your first investment. In fact, if you open a brokerage account and place money in it, your cash will start earning interest the day you deposit it. The broker puts it in a money market fund automatically. You might like to have a checking account attached to your brokerage account so you have access to your money. With that feature, you just write a check for any amount up to the deposit you made. So if you open a brokerage account, deposit some money, you've made your first investment in a money market account.

Let's assume you've done some reading, and are ready to make an initial investment. One of the most comfortable ways to do it is to buy a mutual fund. Some funds will allow as little as $50 as an initial investment. Then you usually have to add the same amount every month for a certain period of time. Other funds require at least $2000 for that first purchase. One fund we found, for institutions, requires a $5,000,000 initial investment. You probably don't want to start with that one. For good information on mutual funds, see the Mutual Fund Magazine site (www.mfmag.com).

The type of funds you might want to consider: a balanced fund, one that has both stocks and fixed income; a short bond fund, specializing in bonds that mature within 3 years; growth and income funds which buy both growth and dividend paying stocks; an index fund, one that invests in the stocks that make up an index such as the Dow Jones Industrial Average or the Standard & Poor's 500 Index. Any of these funds will fluctuate in price, and your principle is at risk. But they give you a good place to start investing, and you don't have to put all your money in them initially. In fact, if you put in a set dollar amount each month, you will buy more shares when the fund is down, and fewer when it is up, thereby lowering your average cost for all your shares. Keep good records of each purchase because when you sell your shares, you'll have to account for each transaction.

Buying at least two or three funds is a good way to diversify your portfolio. If you have a small percentage of each kind of fund and the balance in cash, you can add different funds as you learn more about investing. Of course, each fund will have a good diversity of stocks or bonds within the fund, and a professional money manager will be running your money.

While you're starting out, read everything you can about investing. And watch CNBC, Louis Rukeyser, Lou Dobbs, all the financial programs. That way you'll hear the same phrases over and over, eventually wearing away their mystery.

Knowledge is power in investing. When you start, you have no knowledge and feel powerless. Keep in mind that you don't have to do anything bold initially. Start with the above strategy, then diversify into individual stocks as you gain more understanding of what investing is.