What Would a Good Company Be to Invest in for First Timer?

Question

I'm 18 and looking to possibly invest in some stocks. Nothing too big, probably about $1000 total.

What would be some companies I should take a look at that generally have some strength? I wouldn't mind taking a looking at the foreign markets, since especially the Middle East seems to be a hotspot that could produce some results.

Let me know your thoughts.

Answer 1

Try ETFs or index funds - you'll do about the same as the market. Before you risk real money, try managing a mock portfolio on a site like xearn.com. You can also see what other people are investing in there.

Answer 2

If you don't want to take too much risk, you should invest in ETF's (index funds). These are stocks you can buy which are actually a collection of 10-100+ different companies all in one package. For example you can buy a Gold Index Fund with 30 of the top gold companies, invest in EWZ or FXI if you want to invest in Brazil or China as a whole, etc.

If you are interested in foreign markets, have you considered foreign currency exchange (Forex)? This is a great potential spot to make some money.  There are lots of scams in this area to watch out for though. If you want more info, send me a message or check out my blog: http://yarcofin.wordpress.com .... www.babypips.com is also a great beginner's reference.

WHETHER YOU CHOOSE STOCKS OR FOREX, I HIGHLY RECOMMEND YOU USE A DEMO (FREE) ACCOUNT FOR AT LEAST 1-2 MONTHS BEFORE PUTTING REAL MONEY ON THE LINE!

Answer 3

I think the first question you want to ask yourself is how upset you'd be if the $1000 were to get cut in half; if that's too much to bear, I'd recommend putting into a government-backed security rather than in shares.

However, if not, then you need to ask yourself a few questions first... i.e. how much risk are you willing to take; do you go for well-defined business in the emerging markets (asia) or stick with home countries.

There's also the fact you could put it into a company that pays dividends, so, while the money is in shares, you also are getting something out as well.

Frankly I wouldn't suggest punting money at the middle east, it's too unstable and unlikely to present real growth, with the possible exception of pre-existing big players in that market.

In terms of strength, pick a market sector and start researching companies... obvious ones are Google, Exxon, Goldman Sachs, etcetera.

ADDENDUM:

buying shares in Harley-Davidson because of high gas prices is a bit like buying shares in McDonalds as a result of skyrocketing meat prices... you're better off putting the money into the people taking that money; namely oil producers

Answer 4

If you get it done NOW... get a little ( $ 450.) into WNR, a refiner just taking off with oil prices tapering off and gasoline usage going up... and get that other $ 450./ $500. into an ETF ( exchange traded fund) something like EEM ( invested in emerging mkts) or EEB ( invested in Brazil, Russia, India and China) or XME ( invested in companies in metals/ mining...raw material for the oversesa growth)...or in MOO ( agricultural companies that are doing soooo well lately)

Just learn to watch your investments and don't get greedy... sell off a little if you hit 25%/35% profits... and keep looking for companies with good news in their favor.

...or if you just want to sit back and watch, you buy the likes of Procter & Gamble...or Johnson & Johnson... things that people just depend on and buy from constantly...maybe Wal-Mart, too.

Then if you have some profit after a few months..."play" with that, but keep your base as is.

Just a few thoughts...good luck.

Answer 5

Unless you are experienced and know how to time the market (which no one I have heard of has yet been overly successful at), forget about "hot" sectors, stocks, markets, etc.  Before picking a stock you must know your goals (time horizon) for the money (which you didn't tell us).  Remember the "hot" tech bubble of the late 90's.  It burst during March 2000 and here it is 8 years later and the NASDAQ is still only 1/2 the level it was at its high.  So if you really need the money before about 10 years, be safe, CD's (see www.bankrate.com for the highest rates).  If you don't need the money for at least 10 years, and want stocks, and will be busy working, at college, with dating, etc and won't be able to CLOSELY follow your investment, then you should invest in a company that makes a product used worldwide, used up quickly, and more is bought.  Oil comes to most peoples mind, but the oil company pumping oil today may be pumping sand tomorrow.  Tech, machine companies may sell worldwide, buy the company in the next town may come out with a more advanced product tomorrow putting your company's product obsolete.  Think about products such as soap, toothpaste, shampoo, & other non complicated (therefore hard to improve on) products.  Proctor and Gamble (PG), Colgate-Palmolive (CL), Clorox, Alberto Culver, etc makes such products.  Not only as Proctor and Gamble been making money, but they have made enough to be able to increase their dividends each year for the past 51 years.  Hard to beat that.

(The above is not a recommendation, just a suggestion, do your own research).

Answer 6

Because of the gas prices, i just bought some shares in Harley-Davidson !