Stock Market? What do you think about it?

[live4u120]

Well I've been thinking about investing, since stocks are pretty low right now, it's a good time to take advantage of the prices. (Or at least that's what I'm thinking, correct me if I'm wrong.)

I'm a novice at this, and would love to put some money away in perhaps a blue chip stock, with higher returns than a savings account. I wanted to ask you guys, what stocks do you think are going to do well? What stocks are you afraid of? Do you invest?

I'm doing a lot of research on how to invest, finding a broker, and creating a seperate bank account for my stocks, but I need to know more. What would you say about the market right now? I use www.fool.com for my articles and what not, it seems to be a great source. Also, I've got Trade King as my discount broker, since I'm an individual investing instead of big investments.

Any help would be appreciated. Thanks!

P.S.
I'm investing so I can generate money faster for when I need car money, etc. I've got alot of big payments coming up in my life.

[iammpspeer]

If you are looking for something that is going to be reliable in always going upwards for the most part. You are going to be looking for something like a Pepsi (PBG), CocaCola (KO), Johnson and Johnson (JNJ), Morgan Stanley (MS). I think these are somewhat predictable and usually will give you a decent return over a period of years.

The quicker you are wanting to make money, the more risky you are getting in to possibly losing money. Some of the smaller tech companies and computer companies can be HUGE gains, but then again, they are much higher risk than the already large, proven companies.

Humana Inc. (HUM) is currently one company I own a good amount of stock in, they were near $90/share a year or two ago. Dropped down to $16/share this past year or six months. Now, they are over $40! It is all about doing research and buying at the right time. Now is not a bad time to buy, but a few months ago was a gold mine to start investing in the stock market. Yes I am 20 years old, but I have been hearing my parents talk about this !@#$ for 20 years as both are very successful, high up, business people at (go figure) Humana Inc. here at their Corporate in Louisville. Plus I am currently studying this type of stuff.

I think you are taking the correct steps about reading articles and things like that. If you watch MSNBC I reccomend MAD MONEY, Jim Cramer is a very smart man and he writes some good books helping to explain how to pick stocks, but even he says don't just go buy the stocks he tells you to buy, do your homework, because sometimes he's wrong.

[Shindig]

I'm investing so I can generate money faster for when I need car money, etc. I've got alot of big payments coming up in my life.

Then don't put it in the stock market. That's for long-term investments, not money you'll need before too long. It's too volatile in the short term, but it's fantastic - especially the big indices (S&P;, Russell, etc) - in the long term.

[The Road Dog]

Shindig is a pretty savy poster mentioning the indices.. I have a bit invested in funds that track the S&P; 500. They are diversified enough to be relatively safe (except when the Govt destroys the housing market). I would suggest getting away from the single company investment and go with Funds tracking indices.

[Fraser]

I wouldn't say stocks are still low, if anything I'd say they are more the other way round. The stock market has recovered greatly in the last 8 months or so but only on the back of the fact that it wasn't a complete and utter meltdown. The fundamentals of the economy aren't all that great.

Instead of trying to pick up hot stock tips read about the signs that indicate a company is worth buying by doing your own research through what information is publicly available. This is the teaching the man to fish psychology....

Ignoring 401k/IRAs for a second here I think it is good to have a mix of where your money invested. I have full service brokerage; a financial advisor who manages my portfolio for what are essentially retirement funds. I also have some other funds in low load mutual funds and then my own Scottrade account for playing around. My split of my money is about 70/20/10 in favour of the full service brokerage and my background is in investment planning so I've got a pretty good eye for this kind of thing.

I'd say ETFs might be a good place to start for someone in your shoes. Easily traded, low loads and nice range of possibilities on the investing side.

[live4u120]

Well if you could elaborate on that, what is an ETF? I'm only 14 going on 15, so financial terms are pretty new to me, but I'm definitely willing to learn.

Also, where do you look for information on those certain "signs"? I have a subscription to Wired magazine, and I find articles on companies who are creating new and incredible things, if that's what you mean. (I want to invest in a certain company right now I feel will explode in the next decade or so.)

And as for Shindig, I most definitely should have said it differently. I just want to generate money faster than my stupid bank account. I think the interest on there is a joke, and besides, the money I have isn't going anywhere important right now, so I might as well learn with it.

[Fraser]

Well if you could elaborate on that, what is an ETF? I'm only 14 going on 15, so financial terms are pretty new to me, but I'm definitely willing to learn.

Exchange Traded Funds.

Kudos to you on wanting to learn this stuff early. I'd work with people who were in their 40s and 50s who had no idea about the very basics of investing. I was only a little older than you when I first started doing this kind of thing and started investing a lot whilst I was at University, it has helped me get to the stage where I have no debt I couldn't pay off immediately including my mortgage (all of which I keep because it is very cheap borrowing) if I wanted...and I'm 26.

Also, where do you look for information on those certain "signs"? I have a subscription to Wired magazine, and I find articles on companies who are creating new and incredible things, if that's what you mean. (I want to invest in a certain company right now I feel will explode in the next decade or so.)

Annual reports and the like are a good place to start for companies that are already public. I'll let you read up on the signs to look for but a couple of things are how much debt the company has, cash balance, earnings per share etc....teaching the man to fish and all that.

If you're reading in Wired magazine then you're probably wanting to invest in a rather volatile stock, if it is even publicly traded at this stage. You'll either make a ton of money (and lose it very quickly if you hold out) or it'll go nowhere but Chapter 11. If you're looking to buy and hold it doesn't really matter how much money you start with but if you're looking to buy and sell on a regular basis then I wouldn't bother buying in until you have at least a couple of thousand dollars you're willing to put in. Otherwise you'll lose your shirt in commissions alone, even through Scottrade, Sharebuilder and the like.

[Leftygolfer]

I have a 401K with Fidelity and don't invest on my own currently. My fund has done very well compared with other funds. One thing I think is important is looking at tax implications. I''d look at a roth IRA or roth 401K or something like that that has a tax benifit. I believe you have to be very informed to trade and buy stocks and make it worth it. ALot of people do and make a ton but it isn't that easy.

[Shindig]

And as for Shindig, I most definitely should have said it differently. I just want to generate money faster than my stupid bank account. I think the interest on there is a joke, and besides, the money I have isn't going anywhere important right now, so I might as well learn with it.

How much money are we talking about here, and for how long? If you're thinking of sitting on it for 2-3 years, a CD (certificate of deposit) is a pretty good idea. It's like a savings account (FDIC protection and all), but you essentially promise that you won't take the money out before a certain date. This gives the bank more leeway to loan out the money, and they share their increased profit with you -- at no risk to you. Essentially, if you don't need the money for X months, it's a savings account with a higher interest rate.

[kleraudio]

I dunno man, ETF's, mutual funds, 401 k's... thats long term...

This kid wants some quick money and hes still very young. Man I wish I had your drive when I was 15! You can afford to lose some money at your age.

Anyways, you wanna play a dangerous yet very lucrative game? I day trade options 2-3 days a week with my old man. Now that is fun stuff, we usually buy a few contracts and sell them in less than 2 hours. Calls or Puts depending on the market, right now its all puts

You REALLY have to know whats going on technically and you have to be able to read charts, volatitlity, news, etc...... But, with enough discipline you can lose 8/10 trades and still make a decent profit.

You have to get a book about options and really, really understand how they work and the risks involved. If youve got the drive, the heart and the stomach, you should give it a shot!

Oh, and lets not forget about FOREX

Anyways, PM me with any questions you might have and good luck!

Jim

[Fraser]

I dunno man, ETF's, mutual funds, 401 k's... thats long term...

I'd argue that ETFs work for both long and short term gains. I'd bought a few leveraged ETFs in the last 12 months for my Scottrade account and when I told my FA I was going to hold onto them he said I was nuts. I can't moan about the 120% gains in 9 months though

[kleraudio]

I'd argue that ETFs work for both long and short term gains. I'd bought a few leveraged ETFs in the last 12 months for my Scottrade account and when I told my FA I was going to hold onto them he said I was nuts. I can't moan about the 120% gains in 9 months though

This is true, as this is a "fake" bull market, take your profits and get out, but I think traditionally, ETF's are really looked at as long term investments....

I guess traditionally is a bad term because ETF's just recently gained popularity... Ive been looking at those set date funds offered by a lot of people. Im not very good at doing any real long term investing, but getting a "2055 fund" for retirement might not be a bad idea. I think T Rowe Price and Vanguard offer these... Something I have to looker further in to Jim