What would you tell a friend that is about to put in a large amount of money into stocks? Explain your advice.

Answer 1

1.)If you don't know everything you need to know to make good choices on your own, find an investment newsletter that is consonant with your risk tolerance. You might also find a broker to help you, if you have a substantial amount of money to invest they will take the time to help. However, in my experience and of friends I've spoken to, a broker does not always provide enough information to bring you the best returns. If you can get a referral for a good one, from a trusted friend, you might be better served. I use an investment newsletter and prefer it to my experience with a broker.

2.) Consult with someone knowledgeable of the tax implications of your investments.

3.) Diversify by asset class, this is the best way to protect your money. Asset classes fall into categories like domestic stock, international stock, bonds, cash, futures, etc.

4.) If you don't know much about investing, take a little time to learn the basics. You'l probably be a little more comfortable with the process this way. You can take a class at some community colleges or find books on the subject at any bookstore.

Answer 2

Diversify your investments and don't put more than 10% of the money in anyone stock.

Put the money in a money market mutual fund and auto invest the money over a 1-2 year period,because the market is at an all time high.By dollar cost averaging your money over a year you MOST likely won't buy your investments at a high price.

Keep your investments simple and invest in total stock market mutual funds from Vanguard or Fidelity.

Pick an asset allocation.
Here is an example
55% US Total stock market
25% International stock market
20% Bond fund
This is just an example and will vary by age,higher bond % as age goes up.

P.S .Do lots of research and invest your own money,don't pay someone to do it for you.
You are the best judge for your money.

Good Luck

Answer 3

Only invest what can afford to lose.The current marker is at an all time high. it will go down (have a correction) soon.
Best to invest in long term mutual funds. Right now I would buy 6 month Cd's at 5% and wait till after Nov. to put money into stocks. If you look at history the market is almost always lower every year around Oct Nov. that is the time to get in. Not when it is at an all time high.
Go here for more info. https://us.etrade.com/e/t/home
Learn as much as you can about how money works before investing in anything.

Answer 4

1. Have a plan: The longer term it is the better it is;
2. Buy quality: do your home work or have someone who does;
3. Be Diversify;
4. Stay on top of it;

If you are new at it buy into some good Mutual Funds;

Answer 5

Definately Diversify their investments. Best Wishes and Happy Investing!

Answer 6

Although it is a very good idea to invest, tell him/her to learn as much as possible before he/she starts! Don't just dive in there or they will lose it all. Do research on the companies, learn about fundamental and technical analysis, and learn about market mechanics. Join an investment club, attend investing seminars and ask questions. You don't need the knowledge of a financial advisor, it is better to learn as much as they can. I hope this helps.

Answer 7

Diversify.

Answer 8

Place a Stop Order at 20% for every stock. (This will limit your losses to 20%)

Answer 9

Diversify. That way if one stock takes a dive, it won't hurt you much overall.

Answer 10

in common terms my closest acquaintances and kinfolk. i might ought to have faith them to maintain it a secret first however. yet I doubt i'm fortunate sufficient to return right into a great quantity of money, so it does not certainly rely.