I am 21 years old and would like to start investing but don't know much about the stock market. What can I do

Question

I am going into my senior year of college this fall and have worked an internship that pays pretty well this summer. However, I would like to see my money grow but am not too in tune with the stock market. I'd like to somehow wisely invest the money I've made but without taking big risk actions. What is the smartest thing I can do with my money in order to reap the benefits in the future?

Answer 1

If you are new to the stock market, some research is necessary to be done on your part.

Try the below url:

http://www.sogotrade.com/help/faq.aspx.....

For New visitors, it has extensive information available like:

How do I get started?

How do I fund my account to buy stock?

and Investing section gives information like:

How does the stock market work?

What are the risks and advantages of investing in the stock market?

How do I choose what to buy?

What are some tips for beginning investors?

The following tutorials might be helpful to you:

Definitions: http://www.sogotrade.com/Help/Glossary.a...

http://ezinearticles.com/?Stock-Investin...

http://ezinearticles.com/?Things-to-Know...

http://ezinearticles.com/?How-To-Buy-Sto...

Answer 2

Read the book by Benjamin Graham, "The Intelligent Investor".  

Don't ever take advice from people who are trying to sell you something.

Answer 3

Find the book The Index Fund Solution.  It's easy reading and tells you how to start investing with Index funds.  Think of investing as long term, not something to put $ in this week and take out in 2 months.  At your age, the best thing you can do is invest (even a modest amount) and leave it there to grow!  And it will....investments go up and down but ultimately go UP!  As a 'senior citizen' I can tell you I wish I had thought to invest even $20/week when I was your age...I would be rich now!

Answer 4

Dollar Cost Averaging (DCA), meaning putting in a little regularly, in to a diversified mutual fund is the best way to start and gives you good average returns.

Then later as you learn you can control you investments more if you think you can do better than "average".

I too like Vanguard.  

Answer 5

hello - great that you are thinking about this!  there are a lot of books out there for the beginning investor - find one you like and read it.  it could make sense to hire a fee only financial adviser as well, they can provide good guidance.  good luck!  

Answer 6

Great that you are ready to start investing, especially investing in the stock market. First, before you start investing, familiarize yourself w/ basic investing terminology like collateral and stop loss. Put up a plan such as do you want security, comfort, and rich.

There are many books I can recommend such as:

"Guide to Investing" by Robert T. Kiyosaki

"Stock Investing for Dummies"

"How to Make Money in Stocks" by William J. O'Neil

"The Neatest Little Guide to Stock Market Investing" by Jason Kelly

"The Five Rules for Successful Stock Investing" by Pat Dorsey & Joe Mansueto

There is a website called "investopedia" that should help you in understanding what concepts about investing you should know about.

If you don't want to go through all this, you should have a financial advisor or stock broker to help manage your money.

*Word of caution though*

When picking out an advisor or broker make sure that person is someone who want to make money for you and isn't a biased salesperson. A salesperson will try to sell you an investment opportunity that will sure make big returns but do some research before you jump the bandwagon. Also, there are some online stock brockerage websites where you can buy, hold, and sell stocks through a computer rather than the traditional way of stock picking over the phone w/ your broker.

There are some concepts every investor "must" know about regardless for any reason and that is: balance sheet, income statement, statement of cash flows, & statement of retained earnings. Know how each one works and you'll be able to pick winners from losers.

Answer 7

Here's an aggressive Mutual Fund strategy which is optimized for a $10,000 portfolio.

http://screen.yahoo.com/a?cc=&nm=&proy=&...

Why $10,000? Because each fund provides DIVERSIFICATION but may focus on a specific industry or market sector. You achieve further diversification by

investing $2500 each in 4 funds which focus on areas like Asia or Oil.

Many funds require $2500 initial investment and ask for $1000 additional investment increments.

Using Yahoo's Funds Screener, you can compare your choices against other funds a few times a year. That should be all you have to do to manage your

portfolio.

How good is 30% annualized gain? Here are two benchmarks.

Warren Buffett's lifetime average is 18.1%. Walmart achieved a 10-fold increase in 3 successive decades. That means, you could have invested $1000, waited

30 years, and had $1 million.

30% gain for 10 years is 13.8x -- beating Buffett and Walmart.

There are arguments for other strategies. I could make a good case that a young person should buy some gold because it protects you from the next 40

years of inflation.

But, logically and historically, my FUNDS SCREENER system is nearly perfect.

Good luck,

- CarlD

Answer 8

Visit the Vanguard website.  Vanguard is the ideal place for a novice investor to begin investing wisely.  They have a wide range of investing options to choose from plus they have low fees.

Their website will also help you choose which fund is right for you by answering questioners.

Answer 9

Hi,

Seek Best Brokers advice.

www.blogger.com/home.....view blog and click on Ad's

Answer 10

Stay away from individual stocks.  You need a portfolio of at lest twenty different companies to spread your risks and you would need some major funds to create such a portfolio.  Mutual funds are by themselves collections of individual stocks.  If you are planning on investing for your retirement, buy ROTH IRA's with your choice of mutual funds as the investment direction.  If you can only afford one or two investment directions, make them index funds.  

Answer 11

pls. call to 9480572768  

Answer 12

There are many great investing books and online tutorials out there.  My favorite web resource is Investopedia ( http://www.investopedia.com/ ).  It's a great website to learn more about the stock market and investing in general.

If you wish to invest wisely and without taking big risk, stocks are probably not the best choice for you.  Instead, I believe that you should take a look at mutual funds.  Mutual funds are diversified collections of stocks and bonds, thereby making them less risky.  They are professionally managed so you don't have to worry about lack of experience because you don't have to make any of the decisions.

In order to trade mutual funds, you will need a brokerage account.  I currently use Firstrade ( http://www.firstrade.com/ ) and I'm very happy with them.  They are cheaper than big name brokers such as Etrade, Ameritrade, Schwab, and Scottrade.  Their website is very easy to use, making them perfect for beginners.  I would definitely recommend that you check them out.

Answer 13

If you want to make an investment, but don't want such a high risk, consider IRA/ROTH accounts. Most banks can open a ROTH for you.  Traditional IRA's you have to pay the tax on, but ROTH's are tax deffered, or you might not have to pay at all. Just open it and let it sit. Usually they want you to deposit a minimum of $500- $100, of course the more you put in, the larger the gain on it will be.