While the advice to study and train are all good, there are people who just aren't mentally "wired" to invest. In such cases, they just can't seem to avoid falling into the emotional traps that are created by the market's erratic changes, and they wind up buying and selling the wrong things at the wrong times.
I also manage an account for my mother, started in 2009, now exactly 5 years old. She cashed in a $15,000 CD to fund the account. No money has been added. Today's value- $138,000.
When I started 17 years ago, I hired Smith Barney. After two years, I decided it was stupid to pay others to lose money for me, I could do that easy enough on my own. So I took on the job of teaching myself and managing my own investments. I never looked back.
If you have the knack, the rest is pretty easy to learn. Listen to the old guys- Warren Buffet, Benjamin Graham, people who have done well over the long term. These are the ones who have developed the proven methods that consistently win.
The key is diversification. I started with 25k in 2009 and now have 250K assets. Never put all your money in one equity. I mainly trade biotech and blue chips. 40% of my portfolio is small cap biotech companies like RNN, TGTX, MSTX. These companies are very volatile (can double and triple in a week or opposite). Always do your research and due diligence before investing. Go to the companies website and read their investor presentation. Look at the size of the market for their products. 30% is mid-large cap biotech like NPSP, and the other 20% is blue chips like Tesla, FB, Apple. 10% is other companies in different sectors like energy such as PLUG.
I have found this strategy to be very sucessful. Biotech has been hit hard in 2014 so may be a good time to invest hoping for a rebound.
Basic Due Diligence for biotechs:
1) Major holders - see what hedge/mutual funds owns the stock. See at what price they bought via prospectus on SEC edgar company search for offerings
2) Look at the balance sheet/cash flow - see how much cash they have and how fast they are burning through the cash.
3) Go to SEC Edgar - Read the 10K or 10Q to see recent updates. They have to publish all of the company information in these SEC filings. This is by far the best place to learn about the company
4) Go to the company website - Look at the pipeline and investor presentation. See the market size for their products and the market share they will gain upon approval.
5) Study the technicals - this is very important to make sure you buy at the bottom so you aren't stuck in an equity.
6) Go to http://www.analystratings.net/, type in the ticker of the equity and see what analysts think about the equity.
7) Read the message boards on Yahoo, they can be useful sometimes.
best of luck
I took a different tack. I always invested in diversified mutual funds----stocks, bonds, REITS. I varied how much I had in each category depending on how I thought the general economy was doing. I held small cap mid cap and large cap stock funds (Fidelity and Vanguard) highly rated bonds, lower rated bonds especially corporate, some international stocks and REITS. Never more than 10 funds or so. In other words I picked the market sectors I wanted to invest in and how much I wanted to invest in that market sector and let Fidelity and Vanguard pick the individual stocks because I did not want to spend the time being a stock picker.
I have just started out, and it seems fun. I have heard a lot of people say they tried the stock market, and lost our big time, and haven't returned since.
What is/was your experience?
