I need stock market advice. Help?

Question

I am 17 years old, almost 18. I am interested in investing in the stock market. My grandpa has taught me a little bit about it. I need more advice...maybe from somebody who recently invested and succeeded or somebody who works in this field.

Things I don't understand:
-How much money I'd need to put in an investment(for example I don't know if I can just put $100 or if it has to be thousands, so please help with that)
-How to buy stock without a broker

I'd like to hear from anyone if they feel they can help me out.

Thanks,
Sam

I am 17 years old, almost 18. I am interested in investing in the stock market. My grandpa has taught me a little bit about it. I need more advice...maybe from somebody who recently invested and succeeded or somebody who works in this field.

Things I don't understand:
-How much money I'd need to put in an investment(for example I don't know if I can just put $100 or if it has to be thousands, so please help with that)
-How to buy stock

I'd like to hear from anyone if they feel they can help me out.

Thanks,
Sam

Answer 1

For starters, you will need to make purchases through a Brokerage. You can save money by doing it online, rather than in person or over the phone...which is pretty much what everyone does.
I would recommend looking at the various online Brokerages, and open an account with one of them. Don't focus so much on the price of the commission, as there may be strings attached to that rate...which means you need to read up on that.
Now $100 is not a lot, which means you will likely get a lot of people telling you to invest in penny stocks. Funny thing about penny stocks...they are worth pennies, or less in almost all cases, for a reason. I would focus on a brokerage with a Commission rate less than $10. This means if you have $100, you will only be able to buy $90 worth of stock. Then when you sell the stock, they will take out the commission again. So, yes you can invest with $100, but you won't get a lot...which means that you may find yourself focused in bad areas...don't be tempted to fdo that.
I would strongly encourage you to take life by the horns and become actively involved in learning this stuff. You will be amazed at how easy it really is and how quickly you will pick it up. What I did in the beginning was I started watching MadMoney on CNBC. Then I bought some of Cramer's books and learned the ropes. As time went buy I found myself watching CNBC every morning before class, and now before work. I also read other books on Fundamental Analysis and apply what I learned throughout this whole process from what I hear is occurring in real time from CNBC.
Stick with an area that you are already interested in. This was the learning process will be a whole lot smoother. If you like the sports, look into companies like UnderArmor or Nike.
Hope this helps.
Good Luck.

Answer 2

1

Answer 3

If you don't have much money to invest, I would say buy DRIP instead. DRIP is a dividend reinvestment plan to buy stock without brokers. The advantage is that you can build a portfolio of stocks with low or no commission fees and you don't need a lot of money to start.

There are big companies like Coca-cola, Procter & Gamble which offer DRIP investing. You can simply sign up and just buy 1 share from these companies directly.

The below site offers more information on how DRIP works.
http://dripinvesting.org/

Answer 4

First, you are very wise to start investing early in life, and also during a down turn in the economy. A key issue at your age is don't be to concerned about where the market is today, tomorrow, or for the next many years. The great thing you have is time. In regards to investing, for the average person I wouldn't recommend tying up your assets in single stocks. If they do well, that's great. But during down times all of your assets are headed in a nefgative direction. Look more to mutual funds that spread (Diverse) your dollars. Much safer route to take. I believe if you want to open an IRA you may need a minimum of $250. Not positive but easy info to receive. Also many investment firms (Fidelity, Vanguard, etc) have IRAs that target specific retirement dates. For instance, if a person plans to retire in 40 yrs, they have funds that invest more aggressively for that type of portfolio. It takes any guessing on your part out of the equation. Just look for Non-loaded funds (No up front fees). Good luck.

Answer 5

I suggest you continue saving money and in the meantime open a "practice" account at money.cnn.com. Then go to moneycentral.msn.com and select "top stocks." There's 144 (today) to choose from. Put a few in your practice account and see what happens. Read about them. Compare them to the index they are part of. Monitor their performance. After you've done this for six months or so, then consider opening an online discount brokerage account and trying it for real. But be careful and remember, it's not just the data, it's your emotions too. Guard against making emotional decisions (not easy, when your money is at stake). Good luck.

Answer 6

Sam, you always would need a broker... The stock brokerage firm I would recommend that is cheap is Scot trade. Their pretty cheap per trade and they allow you to open an account with as lettle as 400 bucks I think...

http://scottrade.com/

Before, investing you should read books from peter lynch or Warren Buffet books. It would give you an idea which stock would be a good buy... When it comes to investing can't just get a person's view you have to do your own research... Well good luck and take your time learning about investing... Risky stuff so research first....

Answer 7

You can't buy stocks without a broker. But you can use an online discount broker - that's what most regular people do. Schwab, TDAmeritrade, Scottrade, Zecco and many others are out there.

Look at their fees closely. For instance I use TDAmeritrade and they charge $10/trade. That's $10 to buy and $10 to sell. BUT , if you buy mutual funds or index funds its $50/trade - OUCH! So I buy index etfs and stocks from them only.

If you like funds, then I suggest index funds cause they have low expense ratios and beat mutual funds over time. You can buy them directly from the company that issues them - Vanguard and Fidelity are two good companies for this.

But it sounds like you still have a lot of learning to do. I recommend you continue to stay out of debt and save your money until you get better educated on the stock market. Try going to your library and checking out Personal Fiannce for Dummies, Investing for Dummies, and books by Suze Orman and Jane Bryant Quinn. You really need to know what you are getting into - all the risk and reward. You can get professional help, but they are going to charge you and frankly they can't tell you anything you can't learn from books anyway.

Answer 8

Read as much as you can. Start with;
Mastering the Trade by John Carter
The Disciplined Trader by Mark Douglas

These two books will give you a place to start.

Answer 9

To start out small, get a DRIP. That way you DON'T need a broker to buy some stock.