Stock Market Investing Tips?
I am ready to invest in the stock market, I don't know much about investing, but I like to jump in that way. I'm not a HUGE gambler, but I want to know should you invest in one company to start or invest in several companies?
Public Comments
- First thing to realize is that it is rare for a person to beat the market consistently - as in gain better returns than the market (especially after taxes). You need to understand your risk level (depends on age mostly, younger can take more risks because they have more time to recoup any losses). The safest way to invest in stocks is not to buy a SINGLE company but to buy a shares in a PORTFOLIO of companies. An Index Fund will generally offer solid returns, way better than a Bank for sure. I personally recommend putting most of your money in a fund and then having a little fun picking some stocks for yourself - however that means a lot of research but at least you learn more while being safe.
- I used to invest in specific companies but now invest in no-load mutual funds and leave the individual stock choices to professionals. I think that's the way to go. "Morningstar" is the company that tracks mutual fund performance, much like Value Line rates stocks. Morningstar.com has research tools to help select mutual funds (and stocks). I'd recommend opening a general investment house account (I use Schwab but there's also Waterhouse and others) rather than just going with one company such as T. Rowe Price -- that way you can select from different companies' mutual funds rather than just one company's fund. Whether you invest in companies or mutual funds, invest in several so that you spread out your risk.
- Depends on what you are trying to accomplish by investing in the stock market. Don't do it because some salesman told you. Salesmen think of themselves first, i know I do. Read "Take On The Street" by Arthur Levitt, former head of the SEC in the 90's before you start dropping cash. The best way to lower risk is to educate yourself.
- go read Jim Cramers Mad Money and Real Money book, learn a little about how companies work, and the real meaning of what those stock prices actually mean. If you dont know much about investing, then know you are not ready for investing. stick your money in a mutual fund for awhile, watch it grow, and learn that way.. Also, spend some time watching CNBC during market hours, it may seem boring, but if you really wanna learn about companies, and industry sectors etc..and what's hot now, but will be hot later etc..that's your best bet..
- You should definitely own more than one stock. I would buy 3 or 4 to start with. make sure that they are in different industries. If you are looking for investment ideas, you might want to take a look at what the best investors are buying and selling at http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can read posts on investing from the best traders, as well as share your own investing ideas. There is a charting feature, so you can see how your portfolio performs compared to the S&P 500. Also, you can create your own "group" so that you can see how you are doing compared to your friends. Here are this month's best traders: http://www.top10traders.com/Top10Standings.aspx Good luck.
- ADX a perfect staeter stock. Around $14. Actually is a mutual fund that trades as a stock but at a discount. No need for great knowledge or research or few would be in the market. Diversification is the key & ADX provides it in a low cost manner.
- for newbies, i suggest the index plus a few strategy. Buy an index ETF such as SPY (S&P500) or DIA (Dow Jones Industrial Average) and add some small cap stocks that can really boost your portfolio. research yourself.
- Investing your money in different ratios in differen companies is called Diversification.. It really reduces the risk.. You have to choos the companies which are doing well.. you must analyse the companies past records and the future.. If I were you, I would start from investing with a minimal investment in a minimal risk company.. The Decision is yours !!! Do the Best !!
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