Interested in purchasing stocks but never done it before

[Tyler]

I am a poker player but I am looking for more of a long term investment/gamble. I have some stocks in FedEx that I got when I was working for a company the purchased, but I havent actually attempted to make my own trades/purchases. Could anybody be kind enough to point me in the right directions?

 

[conraddobler]

I am a poker player but I am looking for more of a long term investment/gamble. I have some stocks in FedEx that I got when I was working for a company the purchased, but I havent actually attempted to make my own trades/purchases. Could anybody be kind enough to point me in the right directions?

Buy low sell high.

Not trading advice.

 

[jefftheshark]

It's kind of expensive if you take the entire program, but Investools gives you a great foundation for investing in the market.

JTS

 

[LVG]

I think what he's looking for, guys, is more practical information, such as:

Recommended brokerage house / trading platform;
Minimum trading amounts;
Explanation of some of the more "complex" options out there (call & put's, etc.);
General strategies;
Things to look for / helpful hints.

Is that right, Tyler?

 

[Tyler]

I think what he's looking for, guys, is more practical information, such as:

Recommended brokerage house / trading platform;
Minimum trading amounts;
Explanation of some of the more "complex" options out there (call & put's, etc.);
General strategies;
Things to look for / helpful hints.

Is that right, Tyler?

This is correct. I honestly have no idea to start.

 

[jw7]

OK, first I would make sure you have your own financial house in order before even thinking about investing in individual stocks.

Dave Ramsey - Total Money Makeover is a great place to start with this. Paying down debt, especially credit card debt is the best risk-free way to spend your money.

Then you should start thinking about retirement and get into a 401K or IRA with a diversified portfolio.

Now to your original question, I recommend the Motley Fool www.fool.com has a really nice webpage for new investors. And then just go to the library and get books on this, there are tons of them.

But it is so complicated. You have to understand that with every trade:

- There is a transaction fee on both the buy and sell side
- There are capital gains taxes and rates that change depending on how long you hold the stock.
- You need to understand how to read income statements, understand P/E, read a balance sheet to assess company health.

And even with the above, there are professionals that do this and are not retired, because even with this knowledge, it is a real crap shoot.

That said, personally I use E-trade for individual purchases, but I rarely do this. I use ING direct for liquid cash. Fidelity for my 401K.

And don't even think about options, that is a pure gamble and you have to sign an agreement with at least E-trade to get permission. And even if you hit it, your gains will be reported to the IRS and taxed at the ordinary income rate.

 

[Tyler]

OK, first I would make sure you have your own financial house in order before even thinking about investing in individual stocks.

Dave Ramsey - Total Money Makeover is a great place to start with this. Paying down debt, especially credit card debt is the best risk-free way to spend your money.

Then you should start thinking about retirement and get into a 401K or IRA with a diversified portfolio.

Now to your original question, I recommend the Motley Fool www.fool.com has a really nice webpage for new investors. And then just go to the library and get books on this, there are tons of them.

But it is so complicated. You have to understand that with every trade:

- There is a transaction fee on both the buy and sell side
- There are capital gains taxes and rates that change depending on how long you hold the stock.
- You need to understand how to read income statements, understand P/E, read a balance sheet to assess company health.

And even with the above, there are professionals that do this and are not retired, because even with this knowledge, it is a real crap shoot.

That said, personally I use E-trade for individual purchases, but I rarely do this. I use ING direct for liquid cash. Fidelity for my 401K.

And don't even think about options, that is a pure gamble and you have to sign an agreement with at least E-trade to get permission. And even if you hit it, your gains will be reported to the IRS and taxed at the ordinary income rate.

Thank you for the info. I recently bought a home so I got all my unsecured debt down to almost nothing. That is the main reason I am looking to get into this. Our mortgage payment is half what our rent was and I dont have the CC bills anymore, leaving me a little extra money to play around with.

 

[LVG]

Tyler - JW brings up a great point - that any stock investing must be taken in consideration with your overall financial plan. If you haven't put together that plan yet, you really need to do the research, put together a plan, and figure out where stocks come into that plan.

However, when you first buying stocks, I would break it down into the following steps:

1. Research - read and understand how the market works. Now, I'm not talking about all the strategies as to when to buy and sell, and how to spot trends. I'm talking about:

A. Define your plan - Is this a long term investment? Will you hold when the stock drops below your purchase price? Or are you looking to churn and burn - quick purchases made anywhere from every few hours to every few days? This includes how much you can invest upfront (don't ever invest more money than you can afford to lose), and a hard set investing plan.

B. Define your capital - How much do you have to invest? Do you feel comfortable investing it - meaning that if you lost all of your money the 1st day, you could still pay bills and make life work?

2. Selection of a Brokerage House: Once you have decided how you are going to invest, you need to select a brokerage house (TD Ameritrade, e-Trade, Charles Schwab, etc.). The selection of the house will be based upon your investment plan, your needs, and minimum account balance.

3. Investment specific research - once you have done all of your preliminary research, and selected your brokerage house and opened up an account, then you can start to invest based upon information that you gather.

You need to start to do a pretty good amount of reading. Get your hands on everything available pertaining to the basics of the stock market. You need to learn the general terminology and options available to you. After that, start moving into specific strategies. A piece of advice - I have not found the "fool proof" system to making money in the market - and if I had, I sure as heck wouldn't share it. I don't think it exists, unless someone at the big houses has already thought of it, and they're not sharing it either.

Hope this helps.

 

[conraddobler]

Merrill Lynch has a good CMA "cash management account", now it's part of Bank of America so you can atm at their locations for free out of it, nice perk.

You can purchase about any mutual fund or option or stock on it and their fees are reasonable but you also get a few very good marco economic reports that are fun to read.

I trade using think or swim, but those are actively traded accounts, ie I don't buy and hold in that one.

 

[Yuma]

if you are looking to buy and hold your stocks long term, like for retirement, etc. You just want to build a big portfolio, share builder is always recommended in articles I read. You can put a fixed amount into each month, payday, whatever, and it will buy shares for you that you pick and you can have it reinvest the dividends for you which compounds the buying of more shares!

I started a self directed IRA, and you can buy and sell stocks, rel estate, etc., tax free. It is complicated with rules on what and how you can make your investments without invalidating your IRA. Just throwing that out there as something to be aware of.

 

[LVG]

How's it going, Tyler?

 

[Tyler]

Right now im checking out a few websites that talk about how to approach the market and researching trends with certain stocks. I think sometime within the month I will be ready and comfortable with a certain stock I am watching and I might bu a few shares. This roller coaster the DOW has had the last few days is kind of a turn off tho. Then again its the stock market, what part of that isnt a rollercoaster?

 

[conraddobler]

Right now im checking out a few websites that talk about how to approach the market and researching trends with certain stocks. I think sometime within the month I will be ready and comfortable with a certain stock I am watching and I might bu a few shares. This roller coaster the DOW has had the last few days is kind of a turn off tho. Then again its the stock market, what part of that isnt a rollercoaster?

There's almost no way to buy stocks without paying market tuition.

My opinon on the matter, take it for what it's worth, not investment advice, cause it's not, is that this market is crazy.

It's IMO largely rigged for the benefit of others IMO and while you could argue that a person could ride along on those coat tails and make money, you can also argue that the coat is controlled by people you don't have immediate access to so there's a chance, ala this weekends hijinx that you'll be caught out just because you didn't get the twitter, memo, wink, nudge, whatever.

Historically when the market is more normal a newbie would have a greater chance to learn and grow as an investor but a lot of pros I've heard now all say buy and hold is dead and if that's the case then now is a bad time to be starting out with that goal in mind, again just my opinon.

 

[Tyler]

There's almost no way to buy stocks without paying market tuition.

My opinon on the matter, take it for what it's worth, not investment advice, cause it's not, is that this market is crazy.

It's IMO largely rigged for the benefit of others IMO and while you could argue that a person could ride along on those coat tails and make money, you can also argue that the coat is controlled by people you don't have immediate access to so there's a chance, ala this weekends hijinx that you'll be caught out just because you didn't get the twitter, memo, wink, nudge, whatever.

Historically when the market is more normal a newbie would have a greater chance to learn and grow as an investor but a lot of pros I've heard now all say buy and hold is dead and if that's the case then now is a bad time to be starting out with that goal in mind, again just my opinon.

Thank you for your insight. I really do appreciate all the help you guys/gals have given me. If I ever catch you at a game feel free to drink all my beer and eat all my food!!! Well not all of it but you get it