How exactly do I invest?

Question

Ok, I'm 13 years old and I've been reading up on how to invest. I'd like to invest to earn a little bit of money, I know it won't happen instantly I'll have to wait a few years. I'm a smart kid. Please don't spare the jargon. Tell me how, where and what if you can please.

Reply soon.


- Alex

Ok, I'm 13 years old and I've been reading up on how to invest. I'd like to invest to earn a little bit of money, I know it won't happen instantly I'll have to wait a few years. I'm a smart kid. Please don't spare the jargon. Tell me how, where and what if you can please.

Reply soon.


- Alex

ADD + I've got £500 ish, i've got enough time to wait until about, 35.

Answer 1

There are a lot of options at your disposal, but at 13 you will have to have one of your parents one an account for you under the uniform gifts to minors. Once it is open then you can do with it what you wish until your are 18 when is yours under your name.
Option 1. mutual funds or index funds or closed end funds. Index funds and closed end funds are traded like stocks and you can buy as few as one share, but that is not really practical because of broker commissions which run about 7.00 to 10.00 a trade. Some mutual funds can be purchased for as little as 250.00.

Funds offer diversity for beginning investors that they can not achieve with by purchasing individual stocks. But not all mutual funds are good. Some do not perform very well so you have to do some research to find ones that have good records.

Individual stocks offer opportunites and risks above funds. If you pick a good one you can double your money in a year's time. Or you can also very easily loose half or more of your money if you pick a bad one. Buying stocks offer more of a challenge than buying funds. Unfortunately, many young investors tend to attempt to make a killing by buying speculative stocks and wind up loosing a lot of money.

Ask your mom or dad to open an account for you at one of the on line firms such as TDAmeritrade, Etrade, Scottrade, or Tradeking. Fidelity I particularly like but they are more expensive than the others. You will need to fund your account to begin buying or selling stocks. I do not recall what each firm requires as a minimum deposit, but one requires only $500.

You might set up a practice portfolio at Yahoo Finance and see how it performs to hone your skills. And keep reading investment books. There are a lot of interesting one available.

Answer 2

With gambling, all the value on the table is from the players minus the rake so on average, less value is being returned to the players then they put in. The odds are also negative expectations so in the long run, you can only hope to lose. With investing, you are investing in business operations which are hopefully generating a profit which is either being distributed to shareholders as dividends or being reinvested in the business thereby increasing the value of the shares. There is more on the table than what was put in because the businesses generate a profit so on average, investors get more back then they put in. With investing, the expectations are largely unknown and can only be guessed upon. This affects the "money management" which is optimizing the geometric or logarithmic gains not the odds ( see St. Petersburg's Paradox ). With negative expectations as in gambling, no amount of money management will help. Poker is an odd beast as the expectation are too complex for most people to estimate and there is a psychologic factor. Sometimes the expectations are in a player's favour and can be identified as such therefore it's a game where some money management can be a benefit. Blackjack was also a game where the expectations would occasionally be positive allowing money management to be a benefit. Card counting is a system for estimating when the expectations are in the player's favour.

Answer 3

Alex, Wish I had started at 13 your doing the right thing
lookin' at the money markets.I think you might be better
trading, rather than investing.The main difference between
the two is that with trading, you can make money from your chosen Share/bond/indice going down. how easy is that? I'm what's called a TREND FOLLOWER.I only trade
the FT-SE 100 index. Simply put, If the FTSE 100 is going up I GO LONG (BUY) IF it's going down I GO SHORT (SELL). You will hear lots of "advice" form all over the place, It will all sound very clever and intelligent. Most of
the time these "experts" get it wrong, or we'd all be rich.
READ, READ, READ and then READ some more.Good sites.... ADVFN .com YAHOO (finance) Yahoo do a good
fantasy investor game, this is good for paper trading but
may have an age restriction. Best book.. Trend following
by Michael Covel. Check out CMCMARKETS .COM again
your age may be a problem (Wish I had that problem) Good Luck Big Al (the punters pal).

Answer 4

You might start by searching on the internet for the best interest rate on certificates of deposits or other "safe" (meaning guaranteed) investments. At your age, it's not a very good idea to invest where you can lose your money. If you want to take more chances, there are mutual funds available.

Answer 5

u dont hav time 2 wait - time is money.
If ur parents will but on ur behalf buy shares via motley fool share builder (very cheap), if not open a stake holder pension with scottish widows (there cheapish).
Buy dividend baring shares 4 the long term + avoid "safe" investments like managed funds & trackers, a safe managed fund means the manager dosent know what there doing - if they can only produce a safe level of return they shouldnt b in the market.
Trackers r too expensive, buy ETF's.

Answer 6

I assume you're asking about investing in the stock market. Well, congratulations on starting so young.

You should start by reading some stock investment books, like the ones from Peter Lynch and Warren Buffett. If you are patient, conservative, and have time to research, you should research what's called "value" investing, which is long-term investing in companies that are solid and growing, but undervalued (that is, their stock price is lower than the worth of the business for some reason). You can also read about the granddaddy of all value investors, Benjamin Graham.

If you're looking for something more advanced or faster-paced, you can move on to books by William O'Neill, who advocates a style of investing called CANSLIM (which is closer to growth or momentum investing than value investing). You can type any of these names into Google and find lots of websites that will explain them to you.

Don't buy any newsletters or stock trading systems online. 90% of them don't work, or actually lose money. Also stay away from day trading.

Once you understand the basics, open an account with a broker. You will probably need your parents to co-sign for the account, since you're under 18. You can download the forms online and mail them in. The cheapest good broker I know of is MB Trading, but they don't offer mutual funds or investment advice (of course, you don't really need it, because the Internet is filled with good advice). Most brokers will let you open an account for as little as US$2,000, and some as low as US$500.

You can conduct lots of free research on websites like Yahoo! Finance or Google Finance, or download company reports from www.edgar-online.com.

Since you're young, I would stay away from mutual funds, and instead learn to invest on your own. It's ironic, but individual investors actually have many advantages over mutual fund managers. In particular, if you read Peter Lynch's books, you'll learn that even though he was one of the most successful mutual fund managers in history, he says the same thing.

Sure, you'll make mistakes, and it's a lot of work, but the rewards, both in money and satisfaction, make up for it. You will lose money sometimes, but they key is to learn from your mistakes and never give up.

I'd give you more specific advice, but frankly, it depends on your personality. Research different styles of investing to choose the one that best fits you. Then open up a brokerage account and actually start investing. Actual investing with your own money is the fastest and most effective (but unfortunately also most expensive) way to learn.

Answer 7

To simplify-- get your folks to open that account-- since you mentioned pounds I must think you are British-- don't know how brokerage house are set up there. You don't want one that will charge you if your account is below??? £.
Open that account-- put your cash in it-- add to the account and learn. Watch financial programs on TV and learn the jargon. Until you are in your 20's, I'd just save cash-- maybe look into certificates of deposit for safety and to earn higher interest than usual accounts.
Time is definately in your favor-- learn to be thrifty-- don't fall into the "I need those £ 100 sneakers!!"--
Additional reading-- THE MILLIONARE NEXT DOOR....
good luck

Answer 8

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Answer 9

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Answer 10

how much you got kid, how long you got to wait?