hi,
i have $4000 in my bank account in savings(not college fund) to mess around with. Instead of dwindling it away on buying sprees, I am deciding to put it in the stock market, so i can hopefully get some more money on it. Currently, my parents provide me with everything i need(16 years old), but they wont be around forever, and it would be nice to have some extra money in case of emergencies and to start my life as time goes on. How much could i expect to get out of my $4000?
How would i go about getting my money in the stock market? I would prefer to deal with a broker who would personally guide me in the right direction to get the most out of my money. What would be the best brokerage firm to go to where i could deal with someone who would be in charge of my account? It would also be good to get a financial plan for my life worked out, as i aspire to be rich.
Hopefully my investment in the stock market will get me pointed in the right direction. Please let me know what you think
2007-11-27 13:36:15 · 9 answers · asked by Mike B 2 in Business & Finance ➔ Investing
Here's the basics....
Stock market rises on average of 8 to 10 percent a year when seen in LONG TERM. That means, one year it might decline 20% and next year, and the following, it might rise 15% each.... If you have 4000 dollars, you have a potential of gaining (let's say) 10% every year on average.
Forget about doubling your money in 6 months too.
BUT, if you have just one stock, you just might pick one that will go down.... or get lucky and pick one that will go up. You can not forecast this ahead of time. Over the years, what used to be a HUGE company gone bankrupt. (remember MCI?) So... picking multiple companies to keep you safe. BUT, you can't do that with 4000 dollars.
My suggestion to you is to look for what is called MUTUAL FUNDS. You buy them from brokerage companies. You buy shares of mutual funds, and they are mixture of hundreds of company stocks and bonds. Check into www.fidelity.com and look through their mutual fund offerings.
Don't go with highest return. They have higher risks (meaning chances you might lose 80% of your money)
By the way, don't laugh at 10%... Starting with 4000 dollars, in 20 years you will have 30 thousand dollars. In 40 years, you have 220 thousand dollars. (and that's without adding any more money into your funds) Believe it or not, in 55 years, it will grow to ONE MILLION.
If you really want to learn, read a book called "One up on the Wall Street" by Peter Lynch. He explains the complex world of financial market in everyday English.
As to brokerage, I like Fidelity Investments. They are not the cheapest, but out of about a dozen brokerage I called, they spent the most time explaining everything to me when I knew nothing.
Good job on thinking ahead of your future.
2007-11-27 13:46:15 · answer #1 · answered by tkquestion 7 · 4⤊ 0⤋
1
2016-12-24 05:30:06 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The cheapest way is through an online broker like Scottrade, Etrade, or Ameritrade. The trades are relatively inexpensive, and you'll get up to the second stock information.
From my experience, Scottrade is a best for $4000, while Etrade might be better if you plan on investing 6 figures or more.
2007-11-27 13:44:46 · answer #3 · answered by AJ B 2 · 0⤊ 0⤋
I would suggest a low-cost index fund. You're basically investing in the entire market with these kinds of funds. They simply mimick a certain index, such as the S&P 500. I wish I had known this information at 16. But hey, I'm only 23. There are some in their 40's and 50's that don't know much about investing.
2007-11-27 13:56:41 · answer #4 · answered by Anonymous · 3⤊ 0⤋
Hey, I'm in my mid-30s and I invest in index funds. Low-cost, built in diversity and usually beat managed funds. $4k isn't a lot to spread over too many stocks because they fees with eat you up. I typically never make a trade for less than $3k. Check out Vanguard, Fidelity or T Rowe Price for some low cost index funds.
2007-11-27 15:19:11 · answer #5 · answered by voluntarheel 5 · 0⤊ 0⤋
Mike, you don't have experience...
If you want to lose your money - invest in the stock market.
If you want to earn money - invest in business.
I have invested in my friend's small business. Now I am getting 40% annual interest (in your case it would be $1,600 profit after 1 year).
Forget about CD's, stock market, property in USA;
get rich quick gimmicks (online surveys, etc. )...
Better make offshore investments.
2007-11-27 18:27:35 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Never thought too much about that
2016-09-19 18:18:57 · answer #7 · answered by concetta 4 · 0⤊ 0⤋
TCM and SCR
sit back and watch it grow!
2007-11-27 18:43:24 · answer #8 · answered by Smart Nurse 5 · 0⤊ 0⤋
forget the stock market, invest in weed, its value never goes down, gold is good too.
2007-11-27 13:45:51 · answer #9 · answered by Anonymous · 0⤊ 5⤋
Thanks to each and everyone of you for the replies!
2016-08-26 08:30:19 · answer #10 · answered by Anonymous · 0⤊ 0⤋