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How much should you invest?

If you're new to investing, it can look complicated. But it doesn't need to be. This is part 1 of 5 parts.

By MSN Money staff

The editors at MSN Money have put together this Beginner's Guide to Investing to help you start putting your money to work:

Your investment strategy will depend partly on how much time you have and how much money you want to put to work (watch the video to the right for details).

A few options to consider:

$50 a month or more, with no lump sum

It may not seem like a lot, but even small regular investments in mutual funds or exchange-traded funds can add up through compounding. (Read "Stocks 102: the magic of compounding.")

A lump sum of less than $10,000

You have more options in this range, as many mutual funds have minimum-investment requirements of $500 to $2,500. The key is to make sure all your eggs don't end up in one basket. Invest in five or six different types of mutual funds. If U.S. stocks aren't doing great, your holdings in international stocks or real estate may help keep your overall portfolio afloat.

A lump sum of $10,000 or more

The trick here is not to jump into the market all at once, potentially putting all your money in just before stock prices tumble. One approach: Put one-twelfth of your money into the market each month for a year, a technique known as dollar-cost averaging.

Power of time

Time is a crucial element to any investment strategy. The sooner you start socking it away the better. How much, though? Check out the calculator below to see how far $50 or more a month goes. Once you're done, continue to part 2 of the beginner's guide.

Part 2: Start with a single mutual fund

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TD2K
#1
Wednesday, November 11, 2009 10:36:50 AM
Specifically, you deduct $3,000 in the next 5 tax years and $2,000 in the 6th tax year.
TD2K
#2
Wednesday, November 11, 2009 10:35:45 AM
You keep deducting $3,000 each tax year until it's all used up.  It's obviously going to take a while but it's not just 'lost'.
Wednesday, November 11, 2009 10:31:37 AM
Quoted text:  You get to carry the unused portion of your losses (in this case $17,000) forward applying it against any future gains and a $3,000 deduction each year until it's used up.

Thank you for the info.  But I won't have any future gains cause I was wiped out.  And I think the most I can deduct is another $3000 loss for another year.  That's all.  Am I wrong?
TD2K
#4
Wednesday, November 11, 2009 10:20:35 AM
Suppose you lose $20000, IRS only reduce your tax based on $3000 loss.  Someone else has to pay more tax based on $20000 gain.  Go figure.

You get to carry the unused portion of your losses (in this case $17,000) forward applying it against any future gains and a $3,000 deduction each year until it's used up.

Wednesday, November 11, 2009 10:06:32 AM
Stock market is for suckers.  It's pure gambling.  The only way you can make money is another sucker will pay higher price for your shares.  When the last sucker panics, he will sell at a loss.  The cycle starts over again.  The only guaranteed winners are the fund managers, brokers, analysts, bankers, and the government (tax collection).  Do you know you can only claim maximum $3000 deductible on loss while there is no limit on gain?  Suppose you lose $20000, IRS only reduce your tax based on $3000 loss.  Someone else has to pay more tax based on $20000 gain.  Go figure.
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Updated Nov. 3, 2009