Beginner advice for investing?

Question

Is buying stock on etrade.com a smart thing to do for a beginner that knows very little about it?

I will research what a plan to invest in but I am leaning toward solar energy, or something that has to do with being "Green". Also any advice for someone that wants to be a future investor?

I am 18 years old and am lookin to make money on the side. I am working two jobs (My mother is also) struggling to make bills and I am looking for a way to make a little extra money in my future. I don't have the time & money to take classes at this time but plan to in the future.

Answer 1

Before you open any brokerage account, it would be in your best interest to learn what you are doing, why you are doing it and how to do it.   If any one tells you anything differently they are doing you a great injustice and providing you with information that will only hurt you.

You'll never be a successful investor unless you have a plan in place before you do any investing, not after you start.

Unless you educate yourself, you never will make "money on the side", in fact you will in all probably loose what you do invest.

You should think very seriously about investing in Mutual Funds and/or Exchange Traded Funds (ETFs).  One purpose of mutual funds is to help investors like you, who are either just entering the investment world or who have no investing experience.  Once you feel you at least have an understanding of investments you should look into ETFs which are similar to mutual funds but are traded on the exchanges.

Mutual Fund companies as well as ETFs have an entire array of products many will fit your needs. You can go to the MSN.Money website http://moneycentral.msn.com/home.asp  it has an entire section on mutual funds and Exchange Traded Funds.  Read about the various products and in doing so you will be getting investment ideas and at the same time educating yourself about investing.

You could also contact the funds companies for more information.  I have found that Vanguard & Fidelity can meet your needs for mutual funds.  The service and information they provide is all free and you will find it helpful

Answer 2

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Answer 3

Through my experience i can say that:

1. Update knowledge: Get familiar with the technical analysis, fundamental analysis, indicators and tools.

2. Make use of stop loss, limit orders and trailing stops.

3. Make sure of the entry and exit points.

4. Don't greed. Predetermine your targets and then follow them strictly.

5. NEVER repeat your mistakes. Learn lessons from your loss and try not to repeat them.

6. Never follow what people say, make your own strategy and use them cleverly in trades.

7. Choose a good broker who can help you to make smart trades

Actually trading is a smart activity done my smart people. therefore be smart and make a unique strategy.

Answer 4

If you're interested in an on-line broker go with one that has the lowest commission, allows you to trade options to hedge against price declines and larger gains. In other words doesn't limit your trading. Don't forget, your broker gets paid before you do and gets paid whether you make money or not. Buy on the dips. The trend is your friend. Don't try to catch a falling knife and never fight the overall trend.

Answer 5

I have to say that 95% of all advice and books on investing are not going to help you. You'll end up getting frustrated because it's not going the way you thought it was supposed to and you may lose money.

Real brief, here's why:

1. sophisticated investors always have better timing than you do. They know things way in advance. By the time you get around to buying, they've already sold. They don't advertise their opinion until after the fact.

2. there's a staggering amount of unpredictability in financial markets, handicapping both amateurs and professionals

3. investment advice follows standard "formulas" that everyone has repeated for years. but the actual results of these formulas, looked at scientifically, little better than worthless.

What I'm saying here is already extensively documented. I suggest you familiarize yourself with it before making a decision:

The only real way anyone can make money in investing is by becoming an expert (not by following the methods most people tell you), or by putting your money with someone who knows what their doing (extremely rare.)

I have a friend, he's well educated, smart, and has been investing for years. I recently talked to him and he informed me that he put a lot of money into certain stocks recently and has seen his account balance drop by more than 50%. He said he "never would have thought" that those stocks would do that.

Be careful

http://en.wikipedia.org/wiki/Random_walk...

Wall Street: the Other Las Vegas by Nicolas Darvas (check your library)

A Random Walk Down Wall Street by Malkiel (check your library)

Answer 6

The time you open a brokerage account is after a year of learning and understanding what you're getting into.  Even after that you should always be increasing your knowledge base.

If you don't take the time to learn...... I guarantee a very costly experiance trading.

First 5 rules of trading;

Understand what you're investing in.

Have an exit plan before you take a position.

Always position size.

Always have an edge.

Never take stock tips from anyone.