Stock Market Question?

Question

I am 15 and know about stocks. I was looking for a stock with a high rate of return on capital for a good price. During the duration of period when I am working, I am considering the option of a margin loan for anywhere between $1,000 and $5,000 to invest in the stock market. Since my age is that not of 18 I am forced to have a parent co-sign it. I am just wondering if my plan is a good idea or if anybody has a different method to share I would be grateful.

Thanks

Answer 1

I would discourage you against margin regardless of how young you are as you may need additional capital to hold onto your leveraged stocks. Should you desire higher percentage gains consider buying small amounts of small cap stocks. They may not have the liquidity you want and may be hard to sell on down days, but if luck is on your side you may recoup gains. Remember that in/out trades can have tax consequences and that a long term play paying dividends may be a nice way to start. You may also want to read up on the concept of DCA (dollar cost averaging) this will allow you to have a nice low average cost for your stocks as opposed to trying to "time the market" One thing is for certain is that time is your friend in the market and being 15 and thinking about stocks is not a bad thing. Just try and hit some singles first rather than striking out at the plate trying for a home run. And good luck!!

Answer 2

Yeah! Forget about margin..and if you are serious about investing it will be that important that you will save the money necessary to open ( just a little) account.
Look at the best companies/stocks out there...DEBT is there biggest enemy... don't saddle yourself with it !!

Answer 3

I prefer mutual funds, especially index funds with very low expense ratios. You're getting the benefit of buying many different stocks, rather than putting your money all in one stock. And the indexes tend to outperform most professional managers.