Investing my own hard-earned money

This is something I've wanted to do for a while, but a couple of things have held me back:

1. I don't know a freakin thing about the stock market
2. I don't have a lot of money.

Has anyone on here become invested (get it, invested, stock martket ... sorry, I'll stop) in the stock market? And how did you start out? Are those online trading places a good place or a bad place to start?

I guess part of me has visions of grandeur that I'll get involved in something like google and make millions, but really, I'd just like to see if I can make some kind of profit.

Appreciate the help, folks. Have a good one.

 

http://www.betterworld.com/The-Complete-Idiot's-Guide-to-Making-Money-with-Mutual-Funds-Second-Edition-id-0028624130.aspx?afid=11

Absolutely the best resource for starters.

 

But probably the best advice I can give is to be able to explain to someone outside the situation what you're investing in.

If you can't explain to me the organization, strategies, targets/benchmarks, etc., then you don't need to buy it.

And, don't use some big company. Deal directly with the organization selling the security. For example, purchase your Vanguard securities from Vanguard, not some other investment company. You'll save a ton of money.

Well, that and be debt-free except for your home, before you begin saving for retirement.

 

Now is probably not a great time to buy stocks, especially if you don't have much money and can't really afford to lose it.

And don't get suckered in to buying penny stocks. They didn't start out that way.

Mutual funds are probably the best way to go. The shares are cheap, you're diversified and by re-investing the dividends you can add to your shares every year.

 

I disagree about the time to buy. If you're stupid enough to buy single stocks, now is a better time than most to buy because everything's cheap. More shares for your money.

Or, you can wait until consumers stop spending when we hit the recession the talking heads are screaming about.

 

Do you have a 401K? IRA?

 

My point was that it looks like things will be even cheaper if you wait a while. I own quite a few individual stocks, which have taken a bit of beating lately, but I'm not worried about it since I don't need the money now. And they're all still up from where I bought them.

 

This is a great time to buy.

Yeah, the markets might dip a little more over the next couple of months, but you can get quality companies at 10 or 15 percent less than what they cost a month ago.

For starters, I might recommend buying an exchange traded fund (ETF) in a sector. You don't need to pick whether the economy does better in Brazil vs. China vs. India. You can buy an ETF that balances its coverage, for instances, in many international companies. Mutual funds are available in much the same way . . . investing in the S&P 500, or the 30 Dow Jones Industrials, etc.

It's a good way to get started while you learn why things occur as they do.

Don't get greedy; for every stock you might pick up that doubles in six months, you might very well have three that fall in value. It can be a tough go at times.

When people are selling because they're afraid of losing more than they already have, that's the time to buy.

Good luck.

 

That's why you don't pick single stocks. Mutual funds all the way, baby.

 

Another possibility to look are the target date and/or Life Strategy funds offered by Fidelity and Vanguard. These automatically rebalance for you as you get older. Some people feel they're weighted too heavily in the bonds/non-stock sectors early on. This gives you some protection at times like this (the price per share might only fall a nickel or a dime a day instead of 25-50 cents (or more) a day that an all-stock mutual fund can fall on a bad day).

 

I'm not fond of the lifecycle funds because I think investors can and should be savvy enough to rebalance on their own, without the aid of some guy behind a computer adjusting my investments without my input.

 

commodities funds