Stock market noob.

[Skeeter]

I know I am breaking rule #1, but I am going to do it anyway.

How does someone get started in the stock market. I want to start slow and build a portfolio over time.

Should I call a broker or buy my own or what? I plan on doing some extensive research before I start. But I figured this was as good a place as any to get a little baseline on what to look for.

[Jenisi]

Well first thing is, don't get greedy. Secondly, whatever money you put in, be ok with losing if it so happened. To make money, you should start with at least 3k minimum and do a lot of research before buying. Also if you haven't done anything like this before, I"m sure there are programs or games you can use to buy "fake" stocks and tests your skills and strategys before using real cash.

[Back]

One thing you can do is build on-line portfolios to experiment with. Personalized Yahoo pages let you do it. Google maybe.

[Trouble]

Many of the real brokerage sites will let you set up accounts with fake money. I've seen people advise that if you can make money over a 3-6 month term with a fake account, you might be ready for a real account.

I advise staying away from margin accounts, while they can multiply your gains 10-100x, they can also multiply your losses just as much. Some of the margin accounts have auto-calls on them though to minimize losses (you'll likely still hurt though).

You can look up sites that show you how to attempt to predict market trends (most of the ones I have seen relate to commodities instead of stocks though) based on pricing patterns over time. Just find one of the free ones if you do look for one.

[Gan]

I personally have a broker to manage my portfolio. That is because I do not have time during the day to do what I do and watch the market as well.

That being said, technology and online trading has allowed easier manageability of funds by using automatic calls for high/low points etc. So your exposure to wild fluctuations would be minimized.

Do your research, invest about 3-5k for a while and see how you do. If you find you cant do it, or lose your shirt. Hire a professional broker to help you.

[Miss X]

IM Melissa, she rules at this stuff!

[Valthissa]

Since you asked I'll give you the advice that I give to young engineers here at work. I have assumed that since you are planning on doing extensive research that you want to control your portfolio.

1) do you have $10,000 in cash?

If yes proceed to 2, if no then save until you do

2) have you maximized any 401K investing options?

If yes proceed to 3, if no increase your contribution

3) Without spending any of the above cash open an account at an online discount broker (TD Ameritrade is the one I use, but there are many)

4) Dollar cost average (buy a share or two every month) into index funds over the course of the year. Good choices include triple Q's (QQQQ), diamonds (DIA), spiders (SPY), Russell 2000 (various choices like IWM)

5) During the year use an online tool and, as was suggested earlier, buy fake stocks and track your results.

6) Review your test performance against the index performance and decide what you want to do in year two. If you stick with the index funds it is important to dollar cost average (buy a little each month) versus market timing (buy & sell specific stocks).

Note that index funds typically have more risk in down years than a managed fund (the years 2000 to 2002 demonstrate this effect).

unrelated to the above, I like REIT's.

good luck and have fun

C/Valth

[Sean of the Thread]

RULE #1) Don't take advice from Jenisi. ROFL
Step 1) Contact Elanthia Siren.
Step 2) Get 50,000 and start hedging and shorting baby!

[Parkbandit]

Rule #1 - PAY OFF YOUR DEBTS FIRST. It's absolutely retarded if you are making payments on your house or car or credit cards.. losing anywhere from 6%-18%... while investing money in the stock market and hoping for a 5-8% ROI. Own your home and vehicle.

[Gan]

You could always invest in carbon offsets too.

:whistle:

[Stanley Burrell]

Do what Troubled suggested, that way, you'll have the bubble economy and chaos theory all SHAOLIN Wall Street Master Splinter'd the next time there's an assassination, a nuke goes off, or aliens invade.

You have to be especially careful about the intentions of aliens since some seem to be sure-shot bull market benefactors, but when given food after midnight, they shed their adorable little alien coats and start sporing when thrown in the water.

The Gremlins were, in fact, non-Hispanic space aliens from the insider trading galaxy of Martha Stewart's home nebula.

[TheEschaton]

Generally, the less money you start off with, the more stable you want to be. Margins aren't for you. Hell, I just authorized my broker to go into margins trading now and only with my explicit approval of all trades, with required parameters of the loss I'm willing to accept.

-TheE-

[Sean of the Thread]

A well-respected investment bank that provides financial services.

http://www.comedycentral.com/motherload/player.jhtml?ml_video=11887&ml_collection=&ml_gateway=&ml_gateway_id=&ml_comedian=&ml_runtime=&ml_context=show&ml_origin_url=%2Fshows%2Fchappelles_show%2Fvideos% 2Fseason_1%2Findex.jhtml%3Fstart%3D16&ml_playlist=&lnk=&is_large=true



may be NSFW.. comedy central language.

[Skeeter]

I'd invest with the Wu-tang. they ain't nuttin to fuck wit.

besides this is real life, you gotta protect yo neck.

[Hulkein]

A stock I bought 10k shares of at .04 cents two months ago went up to .25 cents today.... Paid off my shore house with half the earnings.

[Stanley Burrell]

Skeet skeet is spot on with the Wu-Tang comment. 36 Chambers Studio holds the market down with iron mics.

Well played, fellow G-o-d. 10304.

[Drew]

The less money you have and the younger you are the riskier you can afford to be.

[The Ponzzz]

Rule #1 - PAY OFF YOUR DEBTS FIRST. It's absolutely retarded if you are making payments on your house or car or credit cards.. losing anywhere from 6%-18%... while investing money in the stock market and hoping for a 5-8% ROI. Own your home and vehicle.

I will echo this.

[Keller]

The two smartest things I've seen in this thread which I'd like to reiterate:

1) Pay off your debt before you begin investing. This is not to say you shouldn't keep a nest egg in a mutual fund for emergencies -- but don't take money out of your monthly budget to invest for 8% returns when you could pay off your debt and reduce interest accrued of 10%+.

2) Max out your 401k before you invest. Especially if you have some kind of matching system. This is one of the things young people overlook when planning for their future. The 401k is an awesome vehicle for future financial independance -- from a tax perspective I'd say it's the best.

[Kranar]

A stock I bought 10k shares of at .04 cents two months ago went up to .25 cents today.... Paid off my shore house with half the earnings.

$2000 in 2 months ain't bad at all. At first I thought you bought 10,000 dollars worth of their stock and I was in awe.

[Hulkein]

Hah, I wish. I almost bought 20k shares, but put the rest of the money in more stable stocks. I only put 1k in the account to mess around. I figured I'd spend the time to learn about the market if I actually had money in it.

[Stretch]

Some of it has already been said, but...

(1) If you have any debt where your interest is > 8%, pay it off first. If at all possible, carry NO credit card debt if you're not in the middle of a teaser APR. If you have any payday loans/pawnshop debt outstanding, punch yourself in the kidney and pay it off.

(2) Maximize your 401(k) up to your employer match. Past that, maximize your Roth contribution (for most people, that's $4k per year). If there's any left over, consider maxing out your 401(k) contribution (15%)

(3) $10k is NOT enough for you to have any semblance of a diversified portfolio, once you factor in trading costs. The only reason I have any shares of individual stocks at all at this point is because my company matches $0.1765 for every $1 I put in. And also because Apple is doing extremely well for me.

(4) If you INSIST on purchasing individual stocks, do your due diligence. Look for good performing companies that either offer strong growth prospects (i.e., Apple) or high dividends (Bank of America). But you're putting a lot of chips out there.

(5) DO NOT PUT IN WHAT YOU CAN'T AFFORD TO LOSE.

(6) General rule of thumb: put 110-your age into equity, and put the rest into a savings account, municipal bond, or some other form of relatively safe debt.

[Stretch]

Also, don't look for "quick hit wins," since you seem relatively inexperienced in this area.

I made a killing off of New Century, because I shorted it at $15 and closed out at $2.81. Was it risky? Yeah, but the signs for a subprime mortgage collapse have been apparent for several weeks, and that sharp drop on Feb 26th was the signal to MOVE.

Keep in mind that the US is in the middle of a credit turn now. If you're going to invest, be prepared for volatility. In a normal environment, the market overreacts to minute details and press release wordings; in this environment, be prepared for the worst before things stabilize.

[Ignot]

You probably need a broker as i cant imagine how effective doing a portfolio review is on a message board.

How much money are we talking about? If it is less then 250k you may not be able to find a local advisor however alot of big brokerage companies are offering full service advice over the phone. Merrill, Fidelity, Charles Schwabb have all started to do this.

Now if you want to actually get rich you need to learn to trade options!

PM me if you need help with anything though.

[Skeeter]

The 401k is a good idea, I'm not positive if I'm at full match, so I need to double check that.

I have about 2k to play with from poker winnings sitting in a savings account. Still doing the research, but it sounds like I may need to wait till I have a bit more.

[Anebriated]

If nothing else you could put the winnings in a low risk steady payout stock or mutual fund at least until you have enough to start the portfolio you want. I'm not an expert by any means but you might as well make some money on your little egg while you are waiting.

[kookiegod]

As far as interest, do remember that mortgage interest is tax deductible, and credit card is not, do pay off the latter before the former. I definitely agree with the 401K, and definitely take advantage of any employer sponsored plans. I got like 2500 in company stock for my savings, which were pre-tax themselves.

I try not to do individual stocks, and have a financial planner who's paid 1 percent do the majority of the work based on the investment strategy we have developed together for my age and needs.

Without a great deal of time and research, making a killing on any one stock is a chore, and i'd rather leave it up to experienced money managers.

~me

[Sean of the Thread]

we have developed together for my age and needs.

~me



So basically invest in Pfizer?

[Back]

Been watching GILD rise over the past two years (makers of Tamiflu, supposed bird flu vaccine). Its doubled.

[Ignot]

Options damnit.

[Skeeter]

I need to find out if the pr0n industry is really going to switch to blu-ray. If they are I'll invest every penny in that.

[Ignot]

I had a client call me on thursday and she said she wanted to buy this stock. I asked what it was and she said she didnt know.....i asked if she knew the name or what they do? She said she wasnt sure but that it might start with an R? She said she saw it in the paper but threw her paper away and not can't remember but she was sure it had something to do with drugs and began with a D or R. I told her it was probably Dendreon b/c she probably saw it on the news. She said "No! it began with an R! Im sure of it" I explained that im not gonna buy something for her if she cant give me any information on it.

Besides the fact that these are some of the retards i deal with it turns out she wanted to buy DNDN alright which went up 150%. She missed out and how it must suck to be so stupid.

[Renian]

Read "The Neatest Little Guide to Stock Market Investing," "The Intelligent Investor," and "How To Make Money In Stocks: A Winning System in Good Times or Bad." THEN get started.

The Neatest Little Guide will tell you the basics and a plethora of techniques. The Intelligent Investor is the book that made Warren Buffett the best investor of all time--he also studied under the author. How To Make Money in Stocks will teach you the CANSLIM system in more depth, and the Neatest Little Guide touches on that.

[Ignot]

Everyone loves Warren Buffett. What you don't realize is he just does the opposite of what the common investor does. If the common investor is always making mistakes then why not do the opposite?

You should take a modern portfolio theory approach.

[Kranar]

Everyone loves Warren Buffett. What you don't realize is he just does the opposite of what the common investor does. If the common investor is always making mistakes then why not do the opposite?

You should take a modern portfolio theory approach.

Because that's a fallacy. It doesn't have to follow that just because some popular trend fails, that the opposite trend will succeed. If only it were that simple; unfortunately it's possible for them to both fail.

Also, it's not the case that the common investor always makes mistakes, in fact, the vast majority of people who invest money actually profit from doing so.

[Ignot]

It isnt a fallacy that he follows that strategy. And the question i asked was rhetorical, i wasnt looking for an actual response from you.