Stocks?

[thebillionaire]

hey, I wanna go into stocks I'm thinking of just investing like $300-500 to start of and learn, I know how they work and everything, but how do I buythem, alternative to the "physical" stock market place. Any programs or websites recomendation, ins and outs?

[Chris]

I use ameritrade.

On the topic of stock picks. I think Electronic Arts (ERTS) is a good one. They're the largest video game company in the world and so you're basically betting that video game usage will increase, which has been the trend since the 80s. I already own that one.

One I don't own is Garmin. They're the industry leader in GPS devices. As those become more common place they're poised to clean up. I don't know the companies financials but I plan on looking into them and considering them for my next buy.

I also like Tivo, but that is highly speculative at this point.

[Cutter]

In high school I had a lot of interest in stocks. I read books, traded on virtual exchanges, etc. The truth is with minimal investment your money isn't going to go very far.

I hate to be the pessimist here, but honestly, why spend a few hours a week in hopes of making 20% to 50% on even a few thousand dollars? I read once you shouldn't really even think of investing in individual stocks unless you have $100,000 or more to invest -- I agree.

Take the same amount of time, and spend it on your business; you'll make much better returns now.

The "rich" people I know made their money in their business's first, and then later got into the market. Even then, you have to make sure your well diversified, both in individual stocks, and as an entire investment portfolio.

Until you've got $100,000 to invest, I would just throw the money into an S&P 500 index fund, may be split up a percentage of that into some more speculative stuff.

[moonshield]

In high school I had a lot of interest in stocks. I read books, traded on virtual exchanges, etc. The truth is with minimal investment your money isn't going to go very far.

I hate to be the pessimist here, but honestly, why spend a few hours a week in hopes of making 20% to 50% on even a few thousand dollars? I read once you shouldn't really even think of investing in individual stocks unless you have $100,000 or more to invest -- I agree.

Take the same amount of time, and spend it on your business; you'll make much better returns now.

The "rich" people I know made their money in their business's first, and then later got into the market. Even then, you have to make sure your well diversified, both in individual stocks, and as an entire investment portfolio.

Until you've got $100,000 to invest, I would just throw the money into an S&P 500 index fund, may be split up a percentage of that into some more speculative stuff.

I agree. Investing in one's own business is a much better idea until there are some numbers to throw around.

[thebillionaire]

hmm good point, still im gathering info about stocks because it looks really first, I played the virtual stock market 2 years ago came 3rd in Ontario so it was cool

[thebillionaire]

I use ameritrade.

so I can buy and sell stocks right from this program?

[moonshield]

^ While they most likely have their own software, Ameritrade is a brokerage not a program. I'm assuming you mean program as in a software application. If I were to start trading today, I would use ScottTrade as it so cheap. All of the information that the brokerages say they offer is usually just useless fluff.

[paul]

I think existing websites are seriously undervalued. They can be purchased for 10-12 times monthly net income which is more than a 100% return on your investment.

If you are starting out with limited funds, know how to check out a website, and know how to grow a site, why would you want to fool around with stocks?

[Chris]

Paul makes a good point... except that managing websites takes time (usually) and stocks don't.

[paul]

Paul makes a good point... except that managing websites takes time (usually) and stocks don't.

That's why I said "If you are starting..." :)

If your income is established, you are looking to diversify, move assets to a form a spouse could manage, or many other reasons, a stock portfolio makes a lot of sense.

If you are trying to rapidly grow a tiny net worth and have time plus the right skill set, websites look very promising.

"I don't know the companies financials but I plan on looking into them and considering them for my next buy. " Managing a stock portfolio requires some time too, especially at first :)

[Cutter]

I agree. Thats why I started DevelopedSiteSales.com. Unfortunately it didn't quite take off as I had first envisioned it. But, I still like the domain and have future plans for it ;)

With the experience I have now, I can look at a website sale and within about 15 minutes be able to figure out just how good, or how bad, of a deal it is. What I've noticed is that there aren't that many gems out there that owners are willing to sell for a good price. Many of the sites listed for sale of Sitepoint or DomainState, are pretty poor. The occasional good ones I see often require substantial work to get positioned well.

[r2d2]

I agree with the general consensus - don't bother with individual shares for a few hundred bucks, it'll cost more in time than you are ever likely to make. If you want to gain some exposure to the market, put the money in a cheap index tracker (dont bother with managed funds, 80% fail to beat an index tracker after the fees they charge).

[thebillionaire]

I just want to do it for fun, maby Ill keep aside 10% of my income until I have enough money for somefew stocks and then play around

[Cutter]

If you want to do it for fun, go for it. I really enjoyed this stuff when I paid close attention to the market -- I just realised that if I want to go forward by leaps and bounds my own business would take me there -- not the market.

You should read: "How To Make Money In Stocks: A Winning System in Good Times or Bad" by William O'Neil (there is a bit of promotion for Investor's Business Daily in there)

In a larger sense, I'd recommend reading some economics books too. This will give you an understanding of how the money supply and government intervention affect the economy as a whole. The best starting book is "Economics for Real People" by Gene Callahan. If you are really serious about investing you have got to understand how economics works. The sad fact is, few people really do.

You can never stop learning about this stuff, and these two books only brush the surface -- but they are a very good start (and I guarantee they'll leave you understanding far more than any class or course in school will teach you.)

[r2d2]

I've been getting into the market, and am really interested in how the market works etc, and what money/value really are etc, so thanks for those book tips Andrew. I shall have to see if I can find copies to take a read.

Putting aside 10% of your income is a great plan - I've been doing it all year now, and you find it really grows without you noticing the lower cash you have.

Also, Rich Dad now has a blog at Yahoo (http://finance.yahoo.com/columnist/archives/headline/richricher/2005) - some very interesting articles.

[Cutter]

The golden rule -- keep your liabilities low, and your investments high ;)