1. The greatest thing a small investor has over a hedge fund manager or a Wall Street broker is patience.
2. You have to decided whether you are an investor or gambler(day trading).
3. Invest in stocks you understand.
4. Time(compound interest) is your friend.
5. Avoid fees, avoid fees, avoid fees.
6. Dividends are you friend reinvest them.
7. Dogs of the Dow-real easy technique.
8. Buy stock directly from the company(DRIPs are your friend see #5)
9. You cannot predict the direction of the market.
10. Market timing is gambling(see #9).
11. Technical analysis is gambling(see #9).
12. You can invest small amounts say $50 a month in a DRIP.
I really hope you keep at this and begin to invest at your age. Like I said if you do this and are patient you could be very wealthy at a young age(45-50) My last bit of advice. Decide weather you want to be an investor or gambler. Peter Lynch was no gambler.
Don't. Just put it into the bank. Someday soon you will discover girls, and want a car so that you can take girls out on dates. The cost of buying and selling coupled with the uncertainty of the market makes it a bad investment choice for you.
... and there are books on how to beat the house when you go gambling in Vegas, too.
General Motors used to be a blue chip stock. Ever heard of Enron? Do you recall (rhetorical question) when Microsoft DROPPED from $100 to $25??
If anything (and I am biting my tongue) just put it into a no-load mutual fund, and hope the general trend is up - even though Putin threatened to cripple the U S if we interfered with him and the Ukraine. { Have you wondered why gasoline spiked up in the last 2 or 3 weeks? }
I've been subscribing to this PennyStock web site for about a year now and have loved the objective advice they give http://penny-stock.keysolve.net
He really does look for quality stocks and I've made some pretty nice profits on a lot of his suggestions.
Being still fairly new to investing I have been dabbling a lot in penny stocks to try and grow my account. I may not have a big account, but it's a lot bigger than it was a year ago.
On just one of Nathan's picks this year I managed to make my investment back ten-fold!
Penny stocks are notoriously risky but if you follow the right method the risk is almost 0.
I suggest to invest only little money first and then reinvest the profits.
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Understand the Stock Market. In order to invest properly, you need to understand what the stock market is and how it operates. Here's a basic rundown of what's going on:
Stocks. Also referred to as "shares" or "equity." A stock is a certificate that gives the holder part ownership of a company in a company. In order to raise money, a company releases shares that the public can buy. Each share is a percentage of ownership in that company.
Shareholder. This is a person that owns shares in a company. A shareholder can have as little as one share and as many as millions. Shareholders are given votes in the company, and earn a percentage of the profits.
Stock Market. This is where shares of companies are bought and sold. It can be a physical place or a virtual market. The three primary stock markets in the US are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), and the National Association of Securities Dealers Automatic Quotation System (NASDAQ).
Hello Mason. It's good you're starting investing at such a young age. If you're able to stay smart with your investments, you have the potential to compound your money for a long time.
I could type for days on a proper stock selection methodology because so many disciplines comprise a proper methodology. To start, I'd recommend learning fundamental analysis and basic accounting principles as prerequisites to the books you mentioned. Knowing the basics will allow you to understand and enjoy those type of books.
All in all - stick with investing in undervalued companies and resist the temptation to gamble on penny stocks like so many beginners do. Becoming successful in the market means consistently trading smart and not trying to get rich overnight by gambling.
Many people perceive daytrading as a risk-prone strategy, however that's because daytraders are often technical traders (who ignore the basic business principle of investing in undervalued companies). I believe that one can become very successful by daytrading on sound principles.
Anyway, I could type forever on this subject. You asked for research recommendations - I'd recommend Investopedia (for basic stock terminology), Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean (for financial statement basics), and Warren Buffett 3 Favorite Books (for fundamental basics).
Hope this helps!
Forget day trading, it is for Professionals and Fools! Find some high quality stocks and buy a few shares and don't try to trade too often. DO NOT buy penny stocks, they are a losing proposition, believe me. I hope you went to a discount broker like Ameritrade (I'm not an employee) etc. to keep costs low and have access to good research! Don't stop reading! Watch Jim Cramer for ideas but pick stocks very carefully even if he recommends them!
I'm 15, and my parents and I are opening a custodial account and I am gonna start to invest. I have between $200-$500 to start and I wanna know a few tips on the following:
How to pick good stocks.
How to do proper research on the chosen stock.
Best way to invest.
Should I go into day trading as well?
I can't think of anymore now but I have bought and started to read, "One Up Wall Street" by Peter Lynch, "A Beginners Guide To Investing" by Ivy Bytes and Alex Frey, and "How To Beat Wall Street" by JB Marwood. Its a bit confusing but I'm grasping the concept but when I am picking stocks I don't know where to go to research these. Any advice/Links would be much obliged.
Thank you for your time,
Regards, Mason.
