Your Questions About Investing Tips

Daniel asks…

Id like to start investing money over the summer?

and im extremely clueless.

I am 13 years old,and my father will be the one setting up the account and investing,but I get the money

So what are the basics? tips?

please dont criticize me because Im so young.

John answers:

If you are asking for advices to trade, buy low and sell high. Always try to buy when there is a bear rally or a down day. And not really on an up day unless the point you buy is still at its low.

Also, even if you see that the stock might be going up and you think you might be missing the opportunity…don’t worry…chances are…stocks go up and down…so you might be able to buy it at the price you want. Don’t try to chase after the stock.

For short term, when you see a decent profit, take the profit and get back in once the price of the stock drops.

You should start reading financial news, be aware when the economic data are coming out and how those data can affect the market, the earnings announcement from the companies.

Also, there are blogs available such as www.crashmarketstocks.com…so you can get someone’s point of view about the stock market.

Personally for me, when I opened my Scottrade account a few months ago, I just looked at the historical price trends graph of the stocks from google finance and keep myself updated with the news.

If you still need to open a brokerage account, consider Scottrade.

Scottrade.
NO account maintenance, service, or inactivity fees.
$7.00 online trading commission for stock over $1.00 a share.
Tutorial and webcast available to customers.
Excellent trading platforms (very user friendly).
Excellent customer service (398 Branch offices nationwide).
$500.00 minimum to open an account.

If you do end up opening it with Scottrade, use this referral code: EJVR8926
You and I can get 3 FREE trades.

So far, I have been buying financial stocks…so out of them BAC, WFC, JPM, DB…overall right now JPM, WFC, and DB are kinda high…so you should wait til the earnings’ period is done and reevaluate the market condition…so you can buy them at lower prices and keep them for short or long term…

For apparel companies…I think GES and RL are good…but once again…have gone up way too much…

Linda asks…

How do I start investing in stocks?

I am young and I want to start investing my money although I don’t really know where exactly to get started. Can anyone give me some good tips or books to read to become more informed.

John answers:

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. The links below have on-line questionnaires which will give you an idea of how to do “Asset Allocation,” determining how much to put in each type of investment.

You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.5%.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. And ~20-30% in a foreign stock index fund. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be good all-in-one stock and bond funds for an IRA. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don’t work. Particularly bad are people that teach “technical analysis” systems that sound impressive, but don’t work.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

(all links are to non-profit groups or to Yahoo sites. None are solicitation)
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics
http://www.vanguard.com/VGApp/hnw/planningeducation
http://sec.gov/investor/pubs/assetallocation.htm
http://www.bogleheads.org/wiki/Main_Page
Asset Allocation Calculators:
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval

Donald asks…

When it comes to Investing, what is the smallest amount you can invest?

I am someone who knows absolutely nothing about investing and would like to know the very very basics, and would like to start out tiny if possible. Any tips?

John answers:

Congratulations on getting started. It’ll help you more than you know!

Your first dollars should be spent on getting educated on investing. You don’t have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it’ll help you! So let’s start there.

You ask a very broad question, so be prepared for a pretty long answer. Just take it in chunks!

How to invest depends on what you already know. We’ll assume that you’re beginning since you say you’ve got no clue!

A good primer is How to Make Money in Stocks by William O’Neil. You can get it cheap just about anywhere. It’s widely available new or used.

Another good one is one of Jim Cramer’s books.

But books will only get you so far. At some point, you’ll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com

For free, you can start by visiting thestreet.com and investopedia.com. That’ll get you a pretty good primer so at least you’ll understand what the markets are and what a stock is, etc.

If you get a chance, watch Mad Money on CNBC. Don’t trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself.

Next, subscribe to something like investorsbusiness daily or something like that that can help you identify good stocks.

Once you understand stocks, go to 888options.com. It’s a website that’ll help you understand options (what they do, how they work, etc). You don’t need to trade them, but the more you know, the more you’ll see how options can really be the safest way to invest (once you’re educated).

For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter

I know that’s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in.

As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling.

You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc).

Save up until you get a few hundred dollars (since you don’t want commissions to eat up your investment. Start slow, then as you figure things out, you can buy more shares.

Congrats again on getting started. If you have any questions, please let me know.

Hope this helps!

Donna asks…

Is Orange Financials the best company to provide Intraday stock tips?

One of my friends is following their stock tips and he is highly satisfied with their service and is making hell lot of money with the help of tips provided by Orange Financials.I want to know whether this company is really worth investing in??Shall i go for this company??

John answers:

Sounds like it’s probably a scam to me. Maybe consider watching the investment performance of your “friend” a little longer.

Lisa asks…

Want to start investing in the Stock Market need help?

I am a freshmen in college and am interested in investing in the stock market. The issue is I have no idea where to begin and am hoping someone can point me in the right direction. I barley know the basics of reading the stocks and charts so were talking the most basic starting level. Any advice, links, or tips would be great. Thanks.

John answers:

There are many but I found this one to be the best when I started.

Www.investopedia.com

From the basics to advanced and a practice account.

Be careful though it is a risky risky hobby.

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