Stock market for beginners.

rxnarunner · Apr 10, 2009, 06:07 PM

i would like to invest just a little bit of money in the stock market. not much at all. i know next to nothing about it. any suggestions how to get started? books, hands on?

morgaine300 · May 5, 2009, 08:37 PM

Quote:

Originally Posted by amdeist

Whatever you do, don't use advice you see on television or sent in emails. If these people were that good, they wouldn't need to be on television or offering newsletters. They could implement their systems and become multimillionaires.

LOL - good point. Only if that person were rich from investing would I pay attention to them.

And even then, you have to consider what your own situation and goals are.

amdeist · May 5, 2009, 09:06 PM

Be careful to whom you pay attention. Loads of people, including myself did very well when the markets were in bull mode these past years since the crash of October 1987 and the recession in the early 90's. Anyone can pick stocks when they are going up. Now that we have been in a freefall, even those like Jim Cramer and Warren Buffett who made loads of money before have lost significant amounts. Most American companies are illiquid, i.e., they owe way more than they have in cash or revenue. If we have a protracted recession, many of these companies are going belly-up. Would you rather put your money on a family that manages their budget and pays their bills every month, or one who uses one credit card to pay interest on other credit cards?

rxnarunner · May 10, 2009, 08:41 AM

does anyone have an opinion on savings bonds, treasury bills etc.?

amdeist · May 10, 2009, 09:34 AM

Savings bonds, treasury bills and similar investments are relatively safe and sound, but if our stimulus package creates inflation, then having your money in low paying interest investments isn't a great idea. One investment analyst pointed out that the equities market (stocks) for the first time in almost 100 years has a better payout than treasury bonds, CDs, and other types of inevestments. Dow stocks like Merck (MRK)and El Dupont (DD) are paying 6.1 percent per year and 5.8 percent per year annualized dividend respectively. There are stocks in just about every industry paying good dividends and many with zero debt. Lorillard (LO) in the tobacco industry pays 5.6 percent dividend. Williams pipeline partners (WMZ) in the energy sector pays 6.9 percent dividend. Nutrisystem (NTRI) in the food industry pays 4.9 percent dividend. If you do a web search asking for high yield low risk stocks, you will find many others that might offer a better yield and safety for the future inflation that most analysts feel is coming.

slickone987 · May 10, 2009, 09:38 AM

Hands on is the best way through the Wall Street Journal. Spread your money around and don't invest too heavily in one particular company or industry looking for a quick return. It happens rarely.

pathisfer · May 10, 2009, 10:17 AM

I agree that it's probably a 401k that you've opened. Your company will have a plan administrator that offers mutual funds for that 401k and they should be able to provide a list of them for you to consider. If it is in fact an IRA you've opened and you are not investing in a 401k, I would seriously consider participating in the 401k first because usually a company will match your contribution by a certain percentage and that's giving away free money, really. If you have money left over from that (contribute up to what they match in the 401k), then open an IRA to supplement your retirement savings.

rxnarunner · May 14, 2009, 05:21 PM

i just wanna say that ive come back to this question and read over all the advice again and again.

big help, thank you all

excon · May 14, 2009, 05:31 PM

Hello rn:

If it was me, I'd jump off the deep end. You can open an account with an e-trade type of company, and read all the stuff they have on their site. Then, after you've done some of that, click... Trades are about $7.

Here's the answer to the question that you really want to know.. Once you buy that stock, will it got up or will it go down? Here's the answer. NOBODY KNOWS! And, it doesn't matter how many books you buy.

excon

anilreddy123 · Jun 17, 2009, 07:36 PM

if u really want to invest u r money in the market it's better to invest in the mutual funds bcoz the returns are good more over u r in safe position.........in mutual funds the process goes in dis way once u invest in the mutual funds the amount u paid will be kept in different company's by fund managers thats's way u r in alway's in safest position.

amdeist · Jun 17, 2009, 08:44 PM

Quote:

Originally Posted by anilreddy123

if u really want to invest u r money in the market it's better to invest in the mutual funds bcoz the returns are good more over u r in safe position.........in mutual funds the process goes in dis way once u invest in the mutual funds the amount u paid will be kept in different company's by fund managers thats's way u r in alway's in safest position.

I am not sure investing in mutual funds is a safe bet. If, as I wrote in a book in 2004, the baby boomers decide that the stock market isn't a good place for secure retirement and they start exiting, mutual funds will get slaughtered. There are many very sound stocks that are in the world, not only the United States, and your first consideration should be finding some that are liquid, preferably no debt. Most of the companies owned by mutual funds are in debt up to their eyeballs, and if our economy doesn't recover soon, may be in the same boat as General Motors (GM), Chrysler, Lehman Bros, AIG, etc.



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