When I was thirty ... hell, when I was forty ... I was stupid as a sack of doorknobs about investing.
Of course, when I was forty, I didn't have any money. So it kind of didn't matter how stupid I was.
But time is an ever-flowing river, and now I have acquired a few shrinking dollars, and hedge fund honcho Barry Ritholtz has offered a short and handy guide about what I (and others) should do with our money:
1. Pay off your credit cards: Most people pay have much higher credit card rates than they realize -- they creep up over time, especially if you have any sort of a balance. Even a late payments to someone else will also send your rate higher.
Paying these balances off are the equivalent of a guaranteed return of 18% (or whatever your rate has become). RISK FREE, GUARANTEED. You wont get that deal anywhere else.
2. Max out your tax deferred accounts -- 401k/IRA: Putting money into these accounts gives you the equivalent of an extra 40% or so investment capital (depending upon your present tax rate), which then compounds over the decades until you take it. When you retire and withdraw these monies (which should have appreciated nicely) you will be in a much lower tax bracket.
3. Dollar Cost Averaging ETFs: The simplest investment thesis: Set your account up for dollar cost averaging for a few different ETFs. Each pay period (or monthly), but the same dollar amount of your choices. example: $100 of DIA, $100 of SPY, $100 of Qs, etc.
When prices are high, you buy less shares; When prices are low, you buy more. It's pretty foolproof.
I don't agree completely with the above. If you plan to Dollar Cost Average, do it with bare bones index funds (Total U.S. Stock, Total International Stock, a Real Estate Index, etc.). Otherwise, brokerage fees are going to eat you alive each time you purchase Exchange Traded Funds.
Buy ETFs when you have a big lump of money to invest.
One last thought: The markets are going to go up and down. Don't freak when they go down. Just keep Dollar Cost Averaging and ignore the falling prices. And concentrate on the face that you're buying at a discount.