I want to invest in stocks?

Question

i never did it before, and i want to do this right. it is hard to sort of understand it all and i want to make sure i make the correct decisions. and i want to make some money from it. any suggestions? also, i dont want to spend alot of money doing it? can you start small? what stock is good?

Answer 1

Well, first of all,... this is an odd time to start.  The stock market has just changed over from what is known as a "bull market" to a "bear market" (one that tends downwards).

While there are still many diehard optimists out there, many people believe that we may be entering into a possibly long and possibly extreme market retraction.

Optimists would tell you that a good way to start would be to invest in a US or Global index mutual fund.  A mutual fund is like buying a bunch of shares in different companies in just one transaction.. they are managed. (I don't know how extensive your understanding is.)

Other optimists would say that this is a great time to buy beaten down blue chips like General Electric (ticker GE) or Pfizer (PFE)

I'm not one of those optimists.  The best I can suggest is that if you want to try, be ready for some possibly unusual turbulence.

Answer 2

Congratulations on your decision to consider investing some of your money. Historically, the market has proven over and over that it is a good way to grow your way into a bigger bank balance, IF you are prudent.

Having said that, I would suggest that anyone who gives you specific advice in a forum like this is wasting your time. In order for someone to give you truly useful advice that's applicable to YOU and to YOUR situation, they need a LOT of information about you, your long-term/short-term goals and needs, your ability to absorb risk, and so on. If people just fire out the name of one stock, or one mutual fund, what they are really doing is either telling you what they think is best for them, or they are "pumping" something, and really don't care about what you need. You need to treat investing like you would any other subject, and study... and maybe, get an objective adviser that you trust.

Answer 3

Please dont buy penny stock (so many so call stock guru suggest that). Instead I suggest you to buy bottom blue-chip stock.

http://www.mnc2u.com/

Answer 4

Without having more information about your personal information, such as age, current income and other data such as risk tolerance, martial status, and demographics it would be very inappropriate for me or any other responsible person to provide specific investment information in this type of media

Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.

Here is some reading material that can get you started in the right direction,

The first book you should read is Rich Dad Poor Dad by Robert Kiyosaki

Then try some of these

What Works on Wall Street by James O'Shaunessey

Beating the Street by Peter Lynch

One Up on Wall Street by Peter Lynch

The Warren Buffett Way by Robert Hagstrom

Mastering the Trade” by John Caster

How to Make Money in Stocks” and 24 Essential Lessons for Investment Success both by William O’Neil

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance.  (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why.  This site has some basic information for beginners. If any site offers free information, take it.

Other website that can provide instructions and help with procedures and terminology are

Investopedia - http://www.investopedia.com/  Stock Charts - http://stockcharts.com/

http://www.investorshub.com/  http://www.1source4stocks.com/



Visit some of the more professional websites like Zacks - http://www.zacks.com/

Smart Money - http://www.smartmoney.com/  Schaeffer’s – http://www.schaeffersresearch.com/

Some of these web sites will have advertisers who are worth looking into also.  And remember, if they offer free information, get it.

Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses.  Try to get some fee information from the stocks exchanges they all have (had) free booklets, SIAC and some of the regulators (FINRA SEC MSRB CBOE) may provide some free literature.

You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest. Good luck on your journey

Answer 5

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds.  If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds.  However, some young people will go all stocks, and some very conservative people will go all money markets.  The links below have on-line questionnaires which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of investment.



You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks.  Back in 2000, Some people bought all internet stocks; they got burnt when they all crashed together.   You have to diversify across industries.  Unless you know what you are doing, it is best to buy mutual funds.  Buy no-load, low cost funds.  Mutual funds should have expense ratios of less than 0.5%.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.    

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Answer 6

There are a number of website that have good FREE information.  Like Motley Fool, Yahoo and MSN Money.  I invest through Charles Schwab its a discount broker with a lot of research available.  Only 12$/trade.

I'd look at big names that are down like GE or MMM...and reinvest the dividends.

Answer 7

You might want to create a practice portfolio at http://www.top10traders.com - the site is free.  If you are looking for investment ideas, here are all of my favorite stocks right now:

http://top10traders.com/ViewPortfolio.as...