I thought about having fidelity to get me started at buying stock. I have been following some stocks for months. But I'm just beginning... so are mutual funds really the best to start with? I'm just looking for the simple thing; invest in cent stocks, where I can ONLY lose the money I already invested and at the same time learn. Can someone give me a solid example of sotck they bought, what they had to pay for, what to do to get a broker, everything prettty much. I need to know step by step. Thank you

Since you said you need to "everything pretty much" I would recommend that you do not open an account of any type at this time. Start by doing some studying. A good free source is Investopedia. Link at the bottom. They provide a large amount of articles and tutorials that will enable you to get a good understanding of most investing areas. They also provide a simulator so you can practice while you learn. Another free source is your public library.

If you choose to start with mutual funds be sure to select broad based, no load funds. Then add sector specific funds after you have done some study.

Fidelity is a good broker, especially if your focus is on mutual funds. Or if you will be seeking investment advice. But for the do-it-yourself investor my preference is Scottrade. Comparing service and cost I believe they offer the more for your money than other brokers.

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I would stay away from Mutual Funds and look into ETFs the expense ratio is less. Also I would suggest that you paper trade for a while to get the hang of it. Now is not a safe time to be in the market.

Mutual index funds can have very low expense ratios, and so can some non-index funds. I don't personally think ETFs is the base place to start for a beginner, one main reason being that you have to decide when to trade (just like a regular stock), or pay someone who can decide for you.

Mutual funds always trade at the end-of-day price, which of course means you lose the control of what exact price it will be, but for a beginner, not having to make those kind of decisions to start can sometimes be a good thing.

But whether mutual fund or ETF, I most definitely would stay away from individual stocks if you don't know what you're doing. You can keep following them on paper.

Just as note, as a normal everyday average investor, you always will "only" lose what you invested. (To lose any more you'd have to have some legal liability to something beyond that, like say your own company.) But is that your goal? To only lose what you invested? If you're going to leave the paper investing, then you need a better goal before you invest real money.

I like to use a discount broker from one of the major banks because commissions are lower and they don't try to pressure you or give you advice. I prefer buying individual stocks over mutual funds because you only pay commissions on stocks when you buy or sell. My stategy is to buy blue chip stocks that pay good dividends and never sell them. Dividends are taxed more favorably than interest.

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Originally Posted by earl237

I like to use a discount broker from one of the major banks because commissions are lower and they don't try to pressure you or give you advice.

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Banks don't try to pressure you? Where did you get that idea? In the end, it basically comes down to the individual you are working with.

Of course, it's also a 3-month old thread.