Buying Stocks?

Question

I just inherited $10000 from a deseased relative and was wondering how to go about buying stock. I am going to place $5000 aside in a CD for 1 year, but i want to play around with the other $5000 and see if i can make a little bit of money in the process. I have no idea where to begin can someone steer me in the right direction. I have been told mutual funds are a safe bet, but yeild very little profit, i want to take a chance i am young and have plenty of time to recurperate if i lose money. I

Answer 1

Forget what everyone else said.

If you don't know how to pick the right stocks, pick them all. Invest in the entire stock market, which always goes up over time. Invest in a index fund. It diversifies your holdings automatically, and you get the garenteed returns of the market.

Think about, Vanguard Total Stock Market Index Fund

Answer 2

Never buy a stock because someone told you to buy it -

Always do your own research. One easy way is to buy stocks of companies that you relate to. For example all the things you do from the time you wake up till you go to sleep, figure out all the products you use. Find out who makes them. Find the trends with your friends etc. You will find that those companies will stay in business for a very long time - those are the ones owned by Berkshire Hathaway aka Warren Buffet. If you are a novice investor, my suggestion is to first study the company very carefully their stock chart over the last year and all the events. I use www.iminers.com - eChart for that. Then I use E*Trade or Fidelity to dig deeper. Then there is Yahoo Finance and Google Finance for more research. Do not invest even $1 in to any stock until you have done your research. Don't take the approach that many take - let me buy a few shares and see what happens! That is classic gambling!

Good Luck.

Answer 3

First invest in your education and take some finance classes at your local college. So that way you will make well educated decsions about your personal finances. Also make sure your max out your IRA, if you haven't done so already. Then play with about $2,000 in the stock market, to get a feel for the market and make sure you are always researching the stocks you wanna pick. Basically you wanna get to a point where your money is working for you, instead of vice versa. good luck

Answer 4

a good place to start is with a brokerage account. There are several that have a very low initial investment requirement. Sharebuilder is one with no minimum and a $4 charge for stock purchases. Start with something relatively secure, like an DIA or SPY and invest regularily.

Answer 5

I agree with transceva answer. if you are new to investing, mutual fund is the best for you. this will help you to do the right diversity while maintaining good ratio of profit/risk.

research more about mutual fund on the net.

Answer 6

Don't buy anything unless you understand it (fully). Have an "asset allocation plan", and most important;

Don't take advice from strangers that can't be verified, qualifications verified & motives verified. If you're just curious about what answers you'll get.... that's OK. But it's nuts to take advice from people on Yahoo Answers or any other web forum.

Answer 7

You should look for stocks with high Return on Equity and Return on asset with a low P/E.

Answer 8

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