Stocks and Bonds

[Who_dey_hooligan]

Howdy gang,

Alright, this is my questions of the month. I have always been interested in the stock market, but I've been afraid to invest because I don't want to deal with some shyster lawyer or boiler room stock advisor. I want to invest on my terms, without breaking the bank in fees and other BS. I was wondering if any of you use any services or websites to trade on. Any pros or cons? Are their any particular fees I should be paying attention to? Also, I am only looking to maybe start out small, and I mean, maybe around $2000. Thanks as always!

[fredtoast]

Don't invest in individual stock. Buy shares of a mutual fund. Index funds are as good as any and they generally have very low or zero management fees.

Read this

http://www.kiplinger.com/columns/fun...s-vanguard.htm

[goalpost]

My advice would be to dollar cost average....which means don't invest it all at once. Put a portion in, a little bit at a time, over time, until you have the total that you want invested.

[Bengalzona]

I would invest in condos, but frankly I never use them.

[fredtoast]

Originally Posted by goalpost

My advice would be to dollar cost average....which means don't invest it all at once. Put a portion in, a little bit at a time, over time, until you have the total that you want invested.

If yiou have $2K to invest now go ahead and do it. But Goalpost is correct in that you need to invest a little every single month (or paycheck) if you ever want to have much. If you just invest when you have "extra" money you will never invest enough.

If you are young it doesn't take very much each month to accumulate a lot. But the key is that you have to invest EVERY SINGLE MONTH. It has to be part of your budget.

[ishouldbegm]

since obama is in office again i would buy index stocks that track the bear market they go up when the market goes down

[Slappy from New Haven]

Originally Posted by fredtoast

If yiou have $2K to invest now go ahead and do it. But Goalpost is correct in that you need to invest a little every single month (or paycheck) if you ever want to have much. If you just invest when you have "extra" money you will never invest enough.

If you are young it doesn't take very much each month to accumulate a lot. But the key is that you have to invest EVERY SINGLE MONTH. It has to be part of your budget.

Very true.

I have funds and individuals. My advice in what ever you do don't mess with it. Leave it long term.
The only reason I really have the individuals is they are consumables and when the stock market takes a huge dip or mini crash I load cash into them and they bounce back immediately.

And, as you accumulate, diversify. Bonds and Muni's, T- bills. Sign on for an etrade account and just "play" invest for a month until you understand whats going on.

[fredtoast]

Originally Posted by ishouldbegm

since obama is in office again i would buy index stocks that track the bear market they go up when the market goes down

The market did great during Obama's first term raising over 50% in value.

[Who_dey_hooligan]

Thanks for the advice guys, but I'm also looking for a way I can get into the market. IE- Online trading or in person? I always hear things about Scottrade, Ameritrade and stuff like that. I was wondering if any one of them are any better than the other.

The comment on the mutual fund is pretty in line with what I was thinking, and to be honest I definitly wasnt going to put all 2k in at once. The market still makes me a little nervous.

[fredtoast]

Originally Posted by Who_dey_hooligan

Thanks for the advice guys, but I'm also looking for a way I can get into the market. IE- Online trading or in person? I always hear things about Scottrade, Ameritrade and stuff like that. I was wondering if any one of them are any better than the other.

The comment on the mutual fund is pretty in line with what I was thinking, and to be honest I definitly wasnt going to put all 2k in at once. The market still makes me a little nervous.

You don't need a trading account if you just want to invest in mutual funds. Just go to the site of the fund you want to purchase (Vanguard, T.Rowe Price, Fidelity, etc).

Don't "play the market". Invest and leave it alone. Even most of the professional fund managers have trouble beating simple market index funds.

[WeezyBengal]

I have used both Vanguard and ING Direct. I used ING Direct to buy individual stocks and used Vanguard for their low cost and low fee mutual funds and a Roth IRA. I recently pulled all of my money out of individual stocks and put them all into a Vanguard mutual fund focused on investing in stocks with high dividends.

If I were you, I would do as Fred and I have talked about and invest in a type of mutual fund. Go on Vanguards website and they do a great job of explaining their mutual funds and their different risk levels.

[ajustyle]

Establish your goals first. Is your goal to get rich, create steady growth, or maybe to protect your assets from risk? For $2000 bucks it may seem like you just want to get started and see how it goes. In your case I would recommend to only invest that 2000 if you're in a financial position to be okay if something goes wrong. Better safe than sorry. If you think you need that 2k later than wait til you can commit it. 2-5 k is a good starting point.

Next advice is to do your homework. Advisers are like used car salesmen sometimes, they'll have their interests in mind as well as yours. Not saying they all ****, just saying you need to have your guard up just like you would when buying a car. Do your own homework. Honestly go grab a Series 7 Licensing book and study it. People in the industry can usual study it for a month and get licensed. A casual beginner who doesn't work in the industry could get a ton of insight just skimming around at it over the course of 5-6 months. When I worked in the industry I dealt with a lot of brokerage accounts and I used to joke and say that it should be made law for all investors to carry some kind of Series 7 'Lite' license in order to invest. That's because I see people saying and doing so much stupid stuff with their money and their advisers are too busy to micromanage the accounts, or even worse the individual wants to be in full control and doesn't have an advisory account at all.

Final tip is to maybe play with the investopedia.com stock market game. Try your hand at that for a few months and see what you can do! It'll be a fun and safe way for you to get some insight on how to play stocks. It's like fantasy stock market.

Anyways good luck to you and your financial health.

[ajustyle]

Originally Posted by WeezyBengal

I have used both Vanguard and ING Direct. I used ING Direct to buy individual stocks and used Vanguard for their low cost and low fee mutual funds and a Roth IRA. I recently pulled all of my money out of individual stocks and put them all into a Vanguard mutual fund focused on investing in stocks with high dividends.

If I were you, I would do as Fred and I have talked about and invest in a type of mutual fund. Go on Vanguards website and they do a great job of explaining their mutual funds and their different risk levels.

This is terrible advise, but not in a way that I want to demean you. You just don't realize how badly you are throwing this guy to the wolves. There's nothing special about a mutual fund. They can eat away your savings just like individual stocks could. I've seen accounts wither away due to this same line of thinking in which a casual investor gets generic advice to go into an MF and then a few years later they sell it out at a loss. You can't give general advice when it comes to this stuff. General and generic advice is typically a setup for disaster.

[WeezyBengal]

Originally Posted by ajustyle

This is terrible advise, but not in a way that I want to demean you. You just don't realize how badly you are throwing this guy to the wolves. There's nothing special about a mutual fund. They can eat away your savings just like individual stocks could. I've seen accounts wither away due to this same line of thinking in which a casual investor gets generic advice to go into an MF and then a few years later they sell it out at a loss. You can't give general advice when it comes to this stuff. General and generic advice is typically a setup for disaster.

Ive made over 600 dollars in the past 6 months investing in my mutual fund.

Vanguard offers great low cost low fee options to invest in. You are playing the market, so of course there is risk involved. I never said investing in a mutual fund was a complete risk free option.

[Xs&Os]

So, to your question, go with someone that allows real-time, streaming quotes. Also, the one that gives you the most amount of information in terms of research. I have used Scottrade for stocks, and Fidelity for mutual funds, MPLs, etc.
Most important of all, you should read about the economic cycle and how industries track with the cycle. Additionally; understand how politics (domestic and foreign) and current government policies affect sectors and markets.
I realize that it may seem complicated, but it is not. Spend a few days reading about these topics.
The one advice that I will give you, is that the days of buy-and-hold are over. You have to keep an eye on your portfolio, and make changes and reallocate as you deem appropriate.

[fredtoast]

Originally Posted by Xs&Os

So, to your question, go with someone that allows real-time, streaming quotes. Also, the one that gives you the most amount of information in terms of research. I have used Scottrade for stocks, and Fidelity for mutual funds, MPLs, etc.
Most important of all, you should read about the economic cycle and how industries track with the cycle. Additionally; understand how politics (domestic and foreign) and current government policies affect sectors and markets.
I realize that it may seem complicated, but it is not. Spend a few days reading about these topics.
The one advice that I will give you, is that the days of buy-and-hold are over. You have to keep an eye on your portfolio, and make changes and reallocate as you deem appropriate.

Even professional fund mamgers who know more than any of us usually don't beat simple index funds. If you try to out think the experts you are eventually going to get taken.

And ask Warren Buffett about the days of buy-and-hold being over. I'll bet he is doing a lot better in the market than Xs&Os.

[Xs&Os]

Originally Posted by fredtoast

And ask Warren Buffett about the days of buy-and-hold being over. I'll bet he is doing a lot better in the market than Xs&Os.

Buffet is doing better than most folks, and certainly me. Following Graham's strategy and having the liquidity and insight to determine a company's intrinsic value, he buys well.
But on the same hand, he regularly switches positions and reduces exposure (GE, PG, JNJ, etc.).
I believe in diversifying, DRIPs and reallocation, at least once a year. I am doing just fine, except for the g*dda#n Petrobras.