Stock market questions

Hey all. Instead of tossing my tax refund into a ever depriciating investment like my taco, I decided I might want to get into stocks. I'm not looking for an assessment of risk in the decision, I just want to know what some good trading sites or programs are for buying and selling penny stocks. List the fees that apply as well

 

You really trying to get into stocks now? you got balls, im trying to get all mine out. lost alot in this past year

 

I use sharebuilder.com. $4 to buy stock on Tuesdays. I think 11.95 or 14.95 for instant orders. & I think $11.95 to sell.

 

Have you looked into trading Forex? With the leverage that is available, there is potential for some extremely high gains (and loss). Forex is also a global market so you can trade 24 hours a day.

 

Actually he's a genius- Right now is some of the lowest buying points in a while-and he's only 19-so he has a TON of time a head of him for the stock market to build and crash and build again!!

Might be worth looking into mutual funds and/or IRAs depending on your goals-
If you want to save some spare cash for a rainy day/emergency- You can go with a "high yeild savings account" like ING does or you can get into a mutual fund (preferably a no-load-which means no fees). I suggest a mutual fund as right now is not the time to start trying to day trade- the market is too volatile to be trying to learn what you are doing imho.

If you want to start a retirement account-Go with a Roth IRA-With you going to school you may not be able to afford to max out contributions for a year-but every little bit you put in now is alot when you are 65 and want to retire.

I use USAA for all my investments and banking- which doesn't help you much....but at least you've got some ideas now...

 

don't day trade. You have to have $25,000 deposited to day trade with sharebuilder / etrade.

also, sharebuilder sucks. it has crashed on me more than once. i need to change, but too damn lazy.

 

alright thanks for the advice! Ya with the market down right now I figure tossing some money in it is pretty risky but could yield some gains in this state

 

What the the requirements and fees with ameritrade?

 

I like Ameritrade but there are others.

I strongly recommend you stay in a mutual fund rather than buying a stock you feel "good" about. Mutual Funds are groups of stocks picked and managed by a 'fund manager'. There are fee's that are taken out of your returns or investment but the un-educated is more likely to do well in the market. If you buy a couple stocks without knowing what you are doing, you can lose everything pretty easy.

GET IN NOW...the market is full of buying opportunity. Not many others are doing because of the recession. If you have it, invest it. You will be greatly rewarded several years from now when your investment has tripled in value!

Hold it until you retire and that small investment could be worth 20x it's original value.



A higher return, higher risk option that is pretty popular are ETF's (electronically traded funds). They are a "basket" of stocks that are picked and placed together. There are no fee's but there is no one managing the fund. The basket always remains the same. You can get an ETF for any niche or market (Large Cap - big companies, Small Cap - small companies, Oil/Gas, Financial, International, etc. See the below link for everything you ever wanted to know about ETF's - compliments of Yahoo.
http://finance.yahoo.com/etf

And, for what it's worth, I like Apple, Google and Catapiller for stock picks.

 

A friend of mine uses Etrade. He tells me to try to invest in things that will bounce back like the housing market.

 

I don't recommend using day trading web sites. Unless you are an outright market genius, you'll likely lose money rather than gain.

Here's some general advice, but just remember- advice used at your own risk. First of all, over the course of 100 years, the market tends to perform 7 out of 10 years positively. The median appreciation over time is around 7% per year. That's if you add up all the good and bad years. Stocks actually greatly outperform real estate, which despite the recent bubble only goes up 3-4% annually over time. But the 7% is for the entire market.

As such, you need to make sure that you are diversified. That means you need to have a mix of red chips, blue chips, large, small, and mid cap, international, and emerging markets. Look at BRIC funds, which is basically Brazil, Russia, India, China... but I'm a bit leery of Russia with their strange government and Vladmir Putin.

Look for strong companies that might not have glamorous names or make fancy products. Companies like Johnson and Johnson, Johnson Wax, Coca-Cola, Mcdonalds, and so on. Companies that in good times or bad sell things that everybody needs or have a strong presence in countries like China. Look to stable companies like GE, IBM, and perhaps a few larger tech companies like Oracle and maybe even Intel. But be aware that Tech fluctuates and is not as stable as other industries.

I'd also reccomend mutual funds and also maxxing out your 401k if you have one. Those two alone could easily get you to retirement.

Now here's the kicker. I gather that you are young. The general saying today is that if you are to retire by the age of 60, then expect to live from age 60-100. If you plan on having an annual income of 40k after retirement, then you will need a total of 1 million dollars saved up by then. That might sound like a lot, but if you were to start at the age of 20 by simply putting a little less than 10% of your income into retirement per year until you were 60, you should have that or more by the time you retire. The reason is that as stated, a 7% avg median return in the market means that over time this percentage adds up and accumulates. Figure that you have 20k to start with by the age of 30. @7% times 10 more years will mean that if you did nothing more, that money would be worth close to 30k. Add more money and that percentage goes up even more.

So the bottom line is that most people fail to save enough because they start late. Start early and it doesn't take much to retire comfortably. You don't even have to make all that much income. Just remember that Warren Buffet, who still lives in a plain rancher house he bought 30 years ago and still drives plain cars didn't get rich by buying expensive houses, expensive cars, or trying to come up with kooky ideas. All he did was simply choose reliable, consistent, intelligent stocks that were connected to companies that sell what people want. That's really all there is to it. Understand the companies you're investing in, see who they sell to and understand why or how they will continue to succeed.

Anyhow- that's just my opinion. Good luck!

 

Read. go to the book store and pick up some books. Start with "The Millionaire Next Door." Great book that breaks down how millionaires live and how they gain their wealth.

then, try investing for Dummies. seriously, it will give you enough information to get started. How to read balance sheets, all the ratios, etc. Good luck.

Since we have this thread, who is in what right now? I just doubled up on Citi. in at $1.60 - out at $3.40. woohoo!!!

i have some other gambles in penny stocks for fun. better than poker.

Long term i have mutual funds, bonds and some blue chips.

 

I'm in, but never really went out. Almost all mutual funds and 401k stuff. I don't feel super comfortable with financial stocks or the general economy because the indicators are still crappy. unemployment is up, house prices are down, home sales are down, and I'm pretty sure inflation is around the corner. I'd also say that there's less clarity about what's going on with the banks these days.

I'm actually extremely conservative with my money and have most of it in cash simply because me and my wife are going to buy our house with cash and don't care to have any debt. That goes against what the experts say, which is to not pay off your house until you are approaching retirement since doing so means you are not being efficient and losing to general inflation that way. Oh well.

 

Hey everyone (especially bob), thank you very much for the replies and advice. I am not looking to get rich quick. As you know I am young, and have been wanting to play with the market ever since some basic classes I took regarding it. I am not looking to put all my money down, just thinking about playing with a little tax refund. I am not looking to make a long term investment at this point, just gamble on some penny stocks for FUN. Yes I love to gamble and I think this is the perfect way to have some fun with it!

 

Just a few more thoughts. First of all, if you're 19 and investing, then congratulations. Smart move. I wish I had done that when I was 19. Secondly, just because a stock is cheap doesn't mean its good. Penny stocks are similar to day trading stocks. Might as well go to Vegas and pull the lever on some slots because buying penny stocks are about the same. If you want to do yourself some good, I'd recommend going to somewhere like Fidelity or Edward Jones and having them setup a fund for you. They'll have a wide variety of funds to choose from. Since you're young you can afford to be a bit more aggressive.That might not sound "sexy", but my Wife and her Grandmother did that decades ago and they are both what I'd call pretty well set for retirement. Both were middle class folks but are now in better condition than probably a lot of those who might have been better off.

Like I was saying, it doesn't take much. Buying individual stocks isn't something I'd recommend unless you really know what's going on.

 

Penny stocks can be fun. i am in a couple. One is a solid company that has been beat down due to the auto industry.

The other is complete crap shoot in the tech industry. I am hoping for a buyout due to them having quality products. Will sell it on the pop of the news.

OH - and buy on the rumor, sell on the news. Also, don't get greedy. Greed cost a family member $960,000. Once you sell, don't look back. take your profits and find your next investment.

 

Well as long as you have the attitude that penny stocks can be fun, that's fine. Just be careful though and don't expect much out of them. When you say automotive company are you talking Delphi?

 

I gambled with a penny stock last year. I invested $875 into a stock trading at $.075. The stock did a reverse split and I ended up with 10x LESS shares on a stock that is currently trading at $.0005.

I am still holding it as I want to use my capital loss appropriately. My $875 investment is now worth $.10 - yes...1 freaking dime!

The problem is that these stocks are not regulated. They are sold on "pink sheets". In my case, the owner of the company decided to change his company from a chain of stores selling greek food to being a tech company marketing VOIP services. This literally happens overnight and there is no news to indicate it is going to happen. That is when I lost my value. He has since done it again...sold everything and invested in a resort property on a Caribbean island.

Each time he changes businesses, he splits the shares and takes the value out of from investors. Aquire new investors and do it again and again and again. It seems criminal but it's legal. It is near impossible to follow his history and know what you are getting into



DGerm, if you want to gamble, don't do it in penny stocks. If you like gambling, you should know to stay away from a bet that gives you a 90% chance of losing it all. With the current market, you can still gamble on more stable companies. Put $500 into Citi or AIG. The government isn't letting those companies fuck around or go out of business. Good news comes out and the stock jumps 30% (or $150 for you).