Looking to invest.?

Question

I'd like to buy some cheap stock to get started and gain experience. How do I go about it? I just checked out a website and it's all Greek if you know what I mean. What is the difference between a bond and buying straight stock, and how do I go about it? Is there a investors starter kit? What is my first move as far as research goes, and I don't have much to invest, where is a good starting point for me?

Answer 1

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)


529 plans: http://www.savingforcollege.com

Answer 2

a good starting point is "Investing for Dummies" It will give you a lot of knowledge that will help you.

There certainly is no lack of cheap stocks and a lot of them are becoming cheaper every day.

A bond is a debt obligation. It pays interest normally 2 times a year. It is redeemed at face value at a certain point in time, providing the issuing company does not go bankrupt in the mean time as happened with most of the airlines. Bonds normally have a face value of $1000.

A stock is a part ownership in an enterprise. I say that with tongue in cheek because that ownership comes with very few ownership rights. Once a year you get to either approve or disapprove management's handpicked slate of candidates for board of directors. Actually, many managements have even changed company bylaws so that you do not even get to do that any longer. Many now have staggered board members.

How does one go about buying stock? You need to open a brokerage account. There are many on line brokerage firms that make the process simple and inexpensive. Scottrade is one of the least expensive at $7.00 per trade. Actually, there are even some where there are no fees at all to buy and sell stocks. You can generally open an account on line within a few minutes. You will need to fund the account before you will be allowed to buy a stock though. You do that by either sending in a check or setting up a bank transfer to the broker. Most have a minimum amount to set up the account. Scottrade is $500 I believe.

The on line broker will provide you with research material to research the stocks. Yahoo finance also has plenty of good material.

There is another option open to you that you should consider. That is rather than buying individual stocks, instead invest in mutual funds. They are somewhat less risky because you are buying a share of a portfolio of stocks instead of just one or two stocks. Many mutual funds however do have a minimum amount to begin normally about $2000. There is one company that I do know of that has a minimum of only $250 but it does have a 5.75% front end load. American Funds. It does have some excellent mutual funds however. Some funds without a front end load are T Rowe Price and Fidelity. All of these are on the internet so you can check them out.

There are also closed end mutual funds that trade like stocks so there is no minimum amount required to buy those. They are purchased through your on line broker just like a stock.

http://www.scottrade.com/?src=yah&s_kwcid=TC-1591-103434523012-S-8358231012&OVRAW=scottrade&OVKEY=scottrade&OVMTC=standard&OVADID=8358231012&OVKWID=103434523012

Answer 3

There are many places to make money.
Since the stock market is not going so well overseas investments would be the best choice.

Do not invest in stocks. Too risky for beginner! FOREX trading also is like a lottery for beginners. Do not start this gambling if you know nothing about stocks and FOREX trading.

Overseas investments would give you the highest returns.

Alternatively try to invest in someones business. You may receive up to 20% guaranteed interest a year. You will not get such high returns on stocks, mutual funds, bonds or CD's. I run my own business and my net profit is over 5% a month.

Some of the European banks are offering 7% to 14% APR (3-5 years deposits).

Email me at [e-mail] for more information. I'll give you a valuable advice if you are serious about investing.Please don't forget to mention your nickname at YA.

Best of luck!

Answer 4

the best site to go to where the most helpful investors are is www.siliconinvestor.com , Its been here forever. If i were you i would sign up there and look through alot of different posts to get a feel as to who are the most knowledgable guys out there. GARY P GROBBEL was alwatys my favorite to listen to because he was very patient and always explained his trades. These guys have been here forever and that fact shows that they have an idea of what they are doing. Just be careful of anyone that is pumping and talking up stocks hard as these guys are pumpers and dumpers(meaning they want u to buy a dud stock that they are trying to sell while they are hyping it up.

Good luck.

Answer 5

As you have not too much to save, a good starting point is invest in mutual funds through a PAC. Where you can own a basket of companies and diversify your investments and can get at discounted prices when the unit prices are lower.

Answer 6

You don't want bonds right now.. And, I think you need certain minimums to invest into bonds...


And, since you don't have alot of money to invest... I look at it as, you need to invest into more so called, 'riskier' stocks... Which in my mind are companies with smaller market caps... For the long-term of course.. I don't believe in trading, or short term holdings... I believe in taking advantage of compounding returns over yearsss...

If you said, it was a lot of money.. I would suggest investing into stocks like PG, WMT.. and etc... to preserve your wealth..Or, gold,bonds, and etc...

But, I would look into investing into companies like RAD, FRPT, HW, even would say CFC....

All of these stocks above,,, may keep going down...and be scary,, but its called long-term.. and markets do funny things... but when the markets start booming and after years of holding these stocks...Your small amount of money, hopefully will have compounded into 25-70 times your money...

But, you do not want to invest into stocks for the shortterm, buy mutual funds... Look at the companies FUNDAMENTALS... And, when the markets sell these stocks below their true values... Buy them and hold for years/decades... This is called Value Investing....

Answer 7

Right about now there are probable a ton of people copying and pasting websites for you and telling you what stocks to invest in and what metrics to look for when researching...yada yada yada.
The point is, they are giving you fish. But you aren't asking for that. You want to know how to fish. To be truly independent in this process.
I am not going to go on a rant about what I do or where I do for research. I am going to suggest you read some books, and learn to fish on your own. The books I suggest are the ones by Jim Cramer. Ugh, you are probably thinking. But listen to me on this. I use to watch his show and I have read his books. I no longer watch the show, MadMoney, like I used to simply because I have branched out on my own. He use to be one of the best Hedge Fund managers in the business. So he knows what he is doing. Moreover, he explains EVERYTHING in simple terms. And when you start to read the books the first thing he is going to do is break down these barriers to entry that all individual investors faced in the beginning...the lingo! The lingo was specifically designed to confuse you, to keep you out. That is why they take words that have a meaning in regular English, but put a completely different definition on them...to trip you up. So Cramer breaks this down into real english. AND he shows you how to truly research a stock to determine what is cheap.
For example, you mentioned you wanted to get into a cheap stock to learn the ropes. Well, Gap is trading around $21 a share. So lets say that is why you went in on it. Well, Abercrombie is at $81/share. Which is truly cheaper. Its Abercrombie. If Abercrombie moved their P/E to equal that of Gap, than the price would be $107/share. While Gap's P/E is higher than Abercrombie, and therefore cannot adjust it. This makes Abercrombie cheaper and means that if you went into Gap you would LOSE money all because you focused on price. This is obviously explained in better detail in his books (i would really just focus on his most recent).
When I finished them, I moved to another book:
"Sectors & Styles" by vincent catalano. Its way more complex, but a definite good book to know.
Undoubtely, you will encounter terms in your research that will still through you for a loop. So to break that down, i would suggest also checking out this website (ONLY FOR DEFINITIONS, though!)
www.investopedia.com
You are about to embark are a very complex journey. But there is NOTHING stopping you from learning to do this. What I recommended here is soley designed to HELP you develop into the investor that only you can become. Another important point is to focus on the areas of the Market you are already interested in. I mentioned the retail sector in my example, but I know next to nothing about that sector, as my interests lay in Defense/Aerospace, Natural Resources, Emerging Markets and Energy. So naturally, I will fair better in those areas than in retail. So, focus on the place you are the most comfortable and familiar. Learn everything about how that sector works.

Good Luck!!
I really hope I helped in some capacity.

Answer 8

Try http://www.sharebuilder.com or http://www.buyandhold.com

Both these sites are set up to enable & encourage you to buy regular small-dollar amounts of stock in popular companies for minimal fees. By doing so you will learn about stocks, and how (in the long run), they are the path to a great deal of wealth without a lot of hard work!

Answer 9

Read this book: "Investing For Dummies."

Answer 10

well if u are looking to buy goods i can help you with tht.
i cn arrange stuff which u get in market for expensive like 100 % less then tht .
clothing.
hardware
games