*My stock investment strategy -- Advice Welcome*?

Question

I recently joined www.ingdirect.com which has the option to automatically invest in stocks every month based on your preferences. I am completely new to stocks and this is my current plan:

$50/month --- Wal-Mart

$50/month --- Apple

$50/month --- McDonalds

I am just looking for a way to invest my money instead of sticking it into a bank account with low interest. These stocks seem to be consistently increasing and low-risk. What do you guys think? I need all your good advice please!!

Answer 1

I suggest that you play a virtual market game to better understand how the market fluctuates.

www.updown.com is a great stock trading game, if you beat the s7p 500 they even send you cash lol

If you are only using the market as a "bank" for your capital then sure go for it.

AAPL is currently going for nearly $200 a share.

WMT is at almost $60 a share

MCD is near $65 a share.

Investing in well established companies is a great long term investment, all of those companies are great and are never going to die.

I also want to remind you that buy low sell high is NOT a cliche, it will make you $$.

Ex: Wait until

A. Oil goes up again which will cause these stocks to plummet and allow you to get into the market for less money per share.

B. Keep an eye on those stocks and always buy when they drop ALOT. (those companies have nearly NO chance of going out) buying in a slump will surely get you some $$$

Good Luck,

And remember pick a price you feel the stock is worth and only buy at or below that price!  

Answer 2

It's evident that you have planned a wise "build a portfolio" strategy. Buy low Sell high doesn't matter to you because you are in the long-term building stage.

If you were moving thousands of dollars at a time, then you would need to pay more attention to market fluctuation. At $150 per month, you are a long way from worrying about that.

A friend of mine began that same strategy about 15 years ago. He earned a few bonuses at work that he also plowed into his market accounts.

His strategy was to fund his IRA fully each year to take advantage of the tax break. Any available funds over the IRA needs he put into regular market accounts, and he did it all online using Scott trade.

He now has nearly $1 million in his account. So, your plan will work. Long term investing has historically shown a steady increase. Stick with the three you've chosen and continue your monthly investments.

It will pay off in the long run.