I want to start playing with some stocks, advice?

Brandon1 · 10-16-07, 02:12

I opened up a Scottrade account today because I have always wanted to play with some stocks and stuff, and learn a new segment of buisness, but I have no idea what I am doing. I only did the minimum deposit of $500, so I have $500 to play with. What would be some smart things to invest in? Any tutorials or websites with like "how to" on stock trading?

Is this kinda a long reach for someone my age?

BlueZero · 10-16-07, 02:21

Great post! I was thinking about this the past few weeks. I decided this weekend that's what I want to start doing. Like you I don't have much to invest right now but would like to give it a try. If you find any online resources or books please share. I spent a little time this morning looking at Etrade. I'll be sure to check out Scottrade as well.

Brandon1 · 10-16-07, 02:27

Yeah, definatly. I know that $500 invested in the bank just sits there, but $500 invested in stocks has the slight potential to increase.

I watched a stock go from $0.50 to $3.00 the other day. That woulda been nice.

jsatek · 10-16-07, 02:28

1. No pink sheets.

2. Buy options instead.

3. Dont look at them every day. Buy them and forget about them. unless you have a portfolio of 1 million or better, the short term gains are trivial.

I have worked on Wall St. for the past 8 years. Some of you know I own a recruiting / consulting company that builds trading floors for banks. Stocks can be fun, but dont look to beat the market. Right now EVERYTHING is out of whack.

Gold is over 750 per oz.
The Dow hits all time highs weekly
S & P is in the mid $1500.00 range
Oil closed today at $88.00
The USD is on par with the CAN.
The Euro is 40% more valuable than a USD
The Pound is 102% more valuabe than a USD

Get ready to short, and buy some puts.

BlueZero · 10-16-07, 02:32

I was going to stick it in something safe like CD's but then I look at $1000 invested will bring me like $50 in a year. Forget that. I'm willing to take a little risk. Plus if your out the $500 it's not like your going to be living on the street. I figure I can learn on the $500 and if I do good and figure out how it all works then maybe I'll stick some more in there.

I work hard for my money and it's about time my money starts working hard for me. <--- I might have heard that somewhere else, just sounds like an ad.

jsatek · 10-16-07, 02:34

You missed the 3rd quarter earning announcements. Everyone has posted and all of the stocks have moved already.

Q4 either makes or breaks retailers stocks. Example: What is Circuit City stock at ~$8 and Best Buy at ~$48? Maybe time to short Circuit going into Q2 08 when TV sales are in the gutter?

Accumulator · 10-16-07, 02:36

Boring advice from somebody who retired young and has lived comfortably off his investments for a while now: Don't assume you can beat the market unless you have a *very* good reason to think so. Just invest it in an index fund if you want to play the market, or else just put it in something very safe so you don't wake up and find it gone.

Money in a moneymarket account/CD/etc. isn't gonna make you rich overnight, but you're a lot less likely to lose it.

I'm not the dullest pencil in the box, but I pay pros good money to manage my investments. IMO the stockmarket is the rotary/twisted wool pad of money management

Joshua312 · 10-16-07, 02:37

Brandon - I would look into a Roth IRA, I opened up an account last month and I am actually excited about putting more money in haha

Greg Nichols · 10-16-07, 02:38

500$ is a good start, but keep in mind that you have to be willing to loose a bit, or all of it as you figure out the market. Are you willing to lose the entire 500$ if so, then welcome to the stock market.

jsatek · 10-16-07, 02:40

Accumulator: Good points, everybody is trying to beat the market. It doesnt happen on the institutional level, and it isnt going to happen on the retail level!

As a guy who also lives off of past investments. I have to say, I have MINIMAL money in the market right now. I am shorting and buying some key puts, but nothing in the six-figure range. Most of my cash is in real estate right now, just simmering. I have about 30 years to retirement, I can wait it out....

jsatek · 10-16-07, 02:41

Quote:

Originally Posted by Joshua312

Brandon - I would look into a Roth IRA, I opened up an account last month and I am actually excited about putting more money in haha

Good small tax diversion. I do them every year.

jsatek · 10-16-07, 02:44

Oh, I forgot to mention....fixed income is dead. Sorry any FI guys out there. But the Fixed income market is a tough one now, and has been for a while.

I get the most calls for expanding Derivatives desks and Prime Brokerage. Really nothing that is going affect a retail investor. Good indication that that $500 may be better put ot use in a Roth IRA......