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Stock Investment help???

kwyckemynd00

kwyckemynd00

Registered User
Okay, I'm looking into learning the market so I can start doing what I should be instead of relying on social security :lol:

Anyway, I'm basically stock-tarded and know nothing.

I downloaded an ebook called Market Chaos that I got from theiceman.net and am reading an intro from investopedia.com, but I was wondering if there were any seasoned investors who could send me some links about the basics of learning and breaking into the market...anybody?

I've also started reading up a little on Elliot Wave Theory, and yes...I know its controversial because of the subjectivity involved in determining 'waves'...but, overall, it seems reasonable. And, it seems that there is definitely a sizeable portion of people who 'really' put their time into it who swear by it.

Anyway, thanks again! Any and all help is very much appreciated.
 
Since you're asking for advice, my advice is this: Build a solid portfolio of index funds before you even think about trying to pick individual stocks. Almost no one beats the market in the long run. Once you have a solid portfolio of index funds, you can designate a certain percentage of your portfolio for trying to pick individual stocks or sectors of stocks. Invalid Link Removed
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yeahright said:
Since you're asking for advice, my advice is this: Build a solid portfolio of index funds before you even think about trying to pick individual stocks. Almost no one beats the market in the long run. Once you have a solid portfolio of index funds, you can designate a certain percentage of your portfolio for trying to pick individual stocks or sectors of stocks. Invalid Link Removed
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Ohhh, I'm not trying to "pick a stock", I'm trying to get an idea of what the market is all about and get an idea of how it moves, etc.

I don't even have money to invest...I'll basically be pretend investing and move into small time investing for quite a while. I just want to know WTF i'm doing before I go jumping into a market that is dictated by peoples (the shareholders) emotions.

So far I've read quite a bit about Chaos theory and Fractal Geometry, etc, and its amazing how it actually seems to tie right in...makes sense to 'me', but WTF do i know? lol.

Anyway, thanks for the links! I'll take a look!
 
I would recommend getting mutual funds. Now it is very important that when you choose mutual funds that you look at the management fee it will be stated as a percentage. You want the management fee to be less then one percent. There are people who will say oh the more expensive funds perform better. well in the long run you will do better with the cheaper funds. Vanguard is a good fund family, they have lots of assets and stuff. chose a sector that you feel will perform well. Before investing make sure you read as much as you can about what you are putting your money into. Many people when they decide to invest just want to put their money in as soon as possible. Choose the right time to invest.

The advice about buying individual stocks only after you have a good diversified portfolio is great take it.

Eventually when you gain some knowledge about the market get some knowledge on how to use options. Learn them really good before you use them.

Also don't be a Jim cramer fool. There are people who just watch mad money and feel that by watching that show they are doing research on the market. Do your research and gain as much info about stocks as you can.
 
Since you can't afford to invest now, you are obviously still elligible for a Roth IRA, which is the best investment you can make at this stage of the game. Max it out until you are no longer allowed, and in the mean time, read up at sites such as The Motley Fool @ Invalid Link Removed where they explain to the layman.
Compound interest on a tax differed investment is a bad mofaux.
 
kwyckemynd00 said:
Okay, I'm looking into learning the market so I can start doing what I should be instead of relying on social security :lol:

Anyway, I'm basically stock-tarded and know nothing.

I downloaded an ebook called Market Chaos that I got from theiceman.net and am reading an intro from investopedia.com, but I was wondering if there were any seasoned investors who could send me some links about the basics of learning and breaking into the market...anybody?

I've also started reading up a little on Elliot Wave Theory, and yes...I know its controversial because of the subjectivity involved in determining 'waves'...but, overall, it seems reasonable. And, it seems that there is definitely a sizeable portion of people who 'really' put their time into it who swear by it.

Anyway, thanks again! Any and all help is very much appreciated.
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You can get a ton of free advice about the mechanics and basic tried and true investment methodology at the Motley Fool website at Invalid Link Removed.

Yahoo! Finance, which is also free, allows you to set up watchlist portfolios, as well as offering basic business profile and financial performance information on any stock trading on the major American and Canadian exchanges. I strongly recommend you take advantage of everything that website has to offer.

Lastly, I've been a subscriber to Smart Money magazine since it's debut in 1992, when I first started investing in individual stocks, and I still consider it the best financial print magazine on the market.
 
Thanks for answering my question cardinal!!! You da man!

I haven't seen yahoo finance yet, but I was directed to Invalid Link Removed and their free membership gives you some pretty cool features--their java charts are neat.

To everyone else in the thread: I'll still be taking the mutual funds advice, etc, but I was already looking into that kind of stuff, too (when I have money to invest), I just needed to learn the market first, lol. So that's what I was specifically asking about learning 'about' stocks and the stock market.
 
Hard to beat a S&P index fund. Over history it will beat almost any mutual fund after expenses.
I actually have made some money off of Cramers picks. I've lost some to though. As a hedge fund manager he averaged 24.9 percent after expenses. This is over a long career. AMAZING!
 
stinkfinger said:
Hard to beat a S&P index fund. Over history it will beat almost any mutual fund after expenses.
I actually have made some money off of Cramers picks. I've lost some to though. As a hedge fund manager he averaged 24.9 percent after expenses. This is over a long career. AMAZING!
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Yeah, he's insane. He's worth 50-100M now and doesn't even trade for profit. His money gets donated to some charity.
 
My 8th grade science teacher once told me to invest in food companies, because no matter how bad the economy gets, people will still eat/drink. That is all I know about stocks.
 
Three different types of "traders" dictate market condition IMO:

Technical Traders: Watch for signals generally short run from a couple days to a month or two and rely on technical data and indicators like MACD, Stochastics, CCI ... good info would be Invalid Link Removed check out their chart school ... for the ultimate hardcore technical trader Invalid Link Removed ... I have a decent understanding of certain indicators, and had planned to daytrade futures but the capital required is sickenly high... so it'll be a couple more years before I can even consider it or forex markets

Fundamental Traders: These are generally longer term "investors" and are basing there trade on the underlying value of the stock... a perfect example is warren buffet... often emphasis on growth or value stocks and looking for appreciation just greater than that of the actual market over time

News Traders: These people trade on news events like earnings or when the Fed Talks, short term trades... this is also where many penny stock pump and dump scams come in...so something to be aware of

Another interesting distinction is between NYSE and NASDAQ... the markets move differently in response to stimuli because NASDAQ's supply comes from a wide array of MarketMakers and this is why Level II quotes are used in reading a daytrading market... NYSE utilizes a Specialist, generally one for each stock that matches buys and sells and regulates price... this adds another level of variability because that individual can limit how much a stock travels up or down

The Market is some interesting stuff, I don't pretend to even comprehend it, but someday I hope to have a good handle on it, though the real money is in options and futures(sick leverage)...hope that helped

-Moose
 
Awesome moose, thx for the help.

I was reading a little on options, etc. Sounds like that's definitely an area a good trader should play with.

I'll be viewing those sites for sure! I appreciate it!
 
The best way to learn the stock market is to watch some stocks of companies that seem interesting to you, either for what they do or because you know someone who works there or owns some.

Watch the stock's movements on charts, correlate that to its moving averages, RSI and MACD indicators. This is called "Technical Analysis". People who aren't stock market professionals think technical analysis is a bunch of crap, because what they see on CNNfN is analysts going on about profit, marketshare, sales and margin forecasts. But in reality these are only useful in telling you how consistent you can expect a stock to be, or how volatile. Almost all of the professional buying and selling is done on the basis of technical analysis.
 
Grunt76 said:
Almost all of the professional buying and selling is done on the basis of technical analysis.
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:cheers: I would agree with you there Grunt although I don't have any evidence for it...just gut feeling


TA is some powerful stuff, especially with the inclusion of :box:fibonacci numbers for your time intervals

-Moose
 
Grunt76 said:
The best way to learn the stock market is to watch some stocks of companies that seem interesting to you, either for what they do or because you know someone who works there or owns some.
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Okay, cool, I'm on the right track then...I've been (just for fun) watching google, apple, foldera, and some others.
Watch the stock's movements on charts, correlate that to its moving averages, RSI and MACD indicators. This is called "Technical Analysis". People who aren't stock market professionals think technical analysis is a bunch of crap, because what they see on CNNfN is analysts going on about profit, marketshare, sales and margin forecasts. But in reality these are only useful in telling you how consistent you can expect a stock to be, or how volatile. Almost all of the professional buying and selling is done on the basis of technical analysis.
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Yeah, I've been spending all of my initial time looking into TA. It just interested me, that's actually how I got interested in stocks.

Right now I'm reading Market Chaos and the author has been explaining how the market seems to move in an irregular, or more appropriately, 'chaotic' manner. The majority of the book is based off of Chaos theory and how Fractal Analysis and Elliot Wave Theory can be applied to the chaos of the market (chaos, as I'm sure you know, refers to a 'higher order' in this sense).

Thanks for the input Grunt :)
 
I think I'm going to 'pretend' I'm trading and just a log of what i "pretend" to buy and sell... there wont' be much of a difference. I'll even factor in brokers fee's etc.
 
kwyckemynd00 said:
I think I'm going to 'pretend' I'm trading and just a log of what i "pretend" to buy and sell... there wont' be much of a difference. I'll even factor in brokers fee's etc.
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I actually advise against paper trading. It is useless IMO because when you're doing it, you don't have the all-important factor of emotional attachment to the outcome of the trade.

FWIW I use to be a stock broker. And I say this: emotion shouldn't be a factor, but it is. Taking profits is always a good thing. Leaving money on the table is STUPID. I mean, if someone tells you "hey I've got $100 I want to give you", do you say "Nah, wait a bit and give me $500 later"?" I didn't think so. So NEVER act like that with the market, she's a fickle *****. If you buy a stock for a reason and things don't pan out, get OUT, don't wait for "something to happen" because you want to avoid a fee, because there's ALWAYS a good trade out there. ;)

Blah blah blah blah, I sound like an old mom telling her daughter to keep the door shut at night...
 
Grunt76 said:
I actually advise against paper trading. It is useless IMO because when you're doing it, you don't have the all-important factor of emotional attachment to the outcome of the trade.

FWIW I use to be a stock broker. And I say this: emotion shouldn't be a factor, but it is. Taking profits is always a good thing. Leaving money on the table is STUPID. I mean, if someone tells you "hey I've got $100 I want to give you", do you say "Nah, wait a bit and give me $500 later"?" I didn't think so. So NEVER act like that with the market, she's a fickle *****. If you buy a stock for a reason and things don't pan out, get OUT, don't wait for "something to happen" because you want to avoid a fee, because there's ALWAYS a good trade out there. ;)
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Hmm...then what do you advise a guy with no money do to familiarize himself with it? Do I just keep reading until I get enough money to invest?

And, I really appreciate the help! This is something I'm definitely interested in...
 
A lot of excellent advice here has already been dispensed, particularly the importance of a Roth IRA, the need for a diversified portfolio, the smart investment advice of Index Funds, and the fact that people rarely beat the market inthe long haul.

TO this I will add:

1. I would venture a guess and say more money is rapidly made on the advising/managing/trade brokering end of the market than on the actual market itself (keyword: rapidly). If you want to make a lot of money quickly, become an analyst (or proclaim yourself one) and gamble with other people's money while making a sizable salary, risk-free! Or write a book on it! Ever wonder why the guys who write e-books aren't enjoying their yachts in the Caribbean off all their profits? Why they have time to write in bold type in basic HTML? Because they learned the "game" long ago!


2. If you DO want to "play the market" in individual stocks, don't do it until you have significant hedge funds in safe accounts, and play it with money you can afford to lose.

3. To this end, become an EXPERT in the field in which your company of choice operates in, research the market dynamics, learn about everyone on the Board and their tendencies, look at how legal precedent and current legislation might affect decisions, and ESPECIALLY look at the research and development pipeline. For example, AMD was trading at $4 just before the 64-bit Athlons came out. Now its at nearly $40...MANY financial advisors (especially those who don't understand the intricacies of science and the evolution of technology) were yelling "SELL," back then, only to eat their words.

4. Put your proifts and/or "play money" in a money market account at Ing direct or ebank--they give you a $25-$50 signing bonus, no minimums, and amazing rates usuaally reserved for long-term CDs.
 
Just watch the charts... It's ALL in the chart. The chart is the summation of all the knowledge about a stock. If someone knows something about this stock, he's acting accordingly. The more certain his information, the more money he's throwing around according to what he knows. The people with the most knowledge are often the people with the most shares or just plain old money. So the market movement of any stock reflects every aspect of every pertinent analysis of that company's situation. If you learn to read the charts well, you won't need to read the news or to learn anything but the most basic of financial analysis.

What I like to do is watch larger cap tickers, because they are less likely to have a truly unforeseeable event. Moreover, their size give them some stability, making the chart your friend. Penny stocks can go up and down in leaps in bounds in what seems like a random manner because someone (or a team) with lotsa dough or shares can just kick the price up or down for sh!ts and giggles... or of course for their own goals. Larger issues don't have this problem.

When buying or selling, watch out for gaps in the chart. A gap ALWAYS gets filled, eventually. Besides that, try and find which moving average best suits the chart: simple or exponential, 20, 50, 100 or 200-day. MACD, use as is, and RSI also. RSI is a godsend: When it underreaches the 30-line, it's a buy if you like the stock, when it overreaches the 70-line, it's a profit-taking signal if you own some, and a short if you dislike the stock.

Follow the last paragraph above with larger stocks and you'll do GREAT. :D Send a few zillion after you've made them if it makes you feel better. :)
 
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Will Rogers had the best advice when he said:

"I buy a stock. If it goes up I sell. If it don't go up I don't buy."
 
I work in the industry as a Research Managerand have worked for several fund managers in Australia. Because of the internet, individuals are overloaded with information on making investment decisions. It's too much. If looking at picking stocks, the old addage of havign a diversified portfolio, with relatively inexpensive stocks, quality management, strong cashflow and a high dividend yield, is the best way to go. However, how do you pick the stocks? That's the trick. But if you don't know much about investing, forget about technical trading etc etc

So then the best option I think is mutual funds; but even there, there is so many fund managers, funds and styles. Research companies such as Morningstar are a good start, because they actually research managers and funds and give them a rating - and yes Morningstar are very well regarded globally for their research to retail clients. Personally when it comes to equities, I believe a bottom-up fundamental, style-neutral approach works best, especially ones that looks at all market segments and which is high conviction in approach ie. the stocks included are the ones that analysts have their highest confidence in, and that hopefulyl the analysts remuneration is tied directly to their stock calls, and that they have a share in the business.

Whatever you do, choose a portfolio that is diversified, and which will give you the certainty of dividend yield and capital growth if you are only looking at equities. If you truly want to diversify you opportunities for generating returns, then look at a diversified portfolio allocated not only to US equities, but to global equities, bonds, cash, property and alternative assets such as infrastructure and private equity. Such diversification not only casts a wider net for returns, but also helps to reduce risk.

US investors tend not to be too global in their focus compared to overseas investors and thus miss out on opportunities...so for example, look at the fact that the aussie market offers an average dividend yield of 4%, and higher when franking is accounted for, and the fact that the aussie market has delivered 22.5%, 27.9%, 15% for each of the last 3 years - and no it's not an emerging market, it's an advanced market.
 
milwood said:
ummmm..............


...buy low, sell high...!!! ;)

:thumbsup:
:cheers:
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Conversely, you can buy low and never sell. Since your price point would be below fair market value (low), any up tick in the trade price would create an equitable position (profit). If you were to then sell (high) , you would occur a capital position of gain, which is taxable. The tax would detract from your profit margin and thereby your equity. So the key is determining what would constitute a (low) price for a particular stock. The low price should be the lowest price ( a point where a lower price would never occur ) Once the low price has been established you would aquire as much of the stock as you can afford. Your purchase alone may drive the price higher creating a market momentum that drives the price. Congradulations you are now a "market maker". The equity that is created by your market momentum can now be used to borrow against other stock positions. You could purchase short positions ( options to sell a stock at a higher price at a future date ) to hedge your initial stock purchase. The hedge position will maintain your equity against market volatility. The value of your overall market position can now be used as collateral for the purchase of real estate. Soon your wealth and market savy will make you a man of influence. You can peddle your influence to garner political power...Remember who got you started. Take care of your friends!!!
 
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Investors business daily is a paper that I read when I started investing. I started with mutual fund investing and now I pick my own stocks.
 
My advise.... read up on real estate investing first. It's closer to home and the returns are greater. Then once you have a good amount of cash from quick turn profits then you can trade.

But... inregards to stocks... don't ever marry a stock! Set your stop losses and take profits and leave 1/2 if you want.

I disagree with Grunt. Paper trading is an excellent learning tool. Yes it doesn't carry the same emotion but it gives you an understanding of what can and will happen. If you are having a bad day... don't trade. When you have the risk capitol it's easier to distance your emotions from your money. If you lose $3k in one day and this affects your livelihood... don't trade!

But with anything.... education doesn't cost, it pays!
And what do hobbies do.... cost. What do jobs do.... pay! Treat it like a business and it will pay you like a business.

If you want some help on getting started with investing in real estate email me at (emjones2 @ email . uophx . edu)
 
Roth IRA's are good at this point kwyck. You don't get taxed on them and you can't lose them in case someone ever files a lawsuit against. This is at least what the person who made a presentation told us.
 
Thanks for all the input guys; Thanks to Salv for pointing out overseas markets--I was looking into that a few days back, but it seemed to have slipped my mind! Definitely worth it, we ARE going to a global market, no ifs ands or buts now.

PaperTrading may not be the 'best option' because of the lack of emotional attachment, but its about all I'm gonna have for a while :D lol.. I figured it would be stupid for me to get started even 'playing' with anything less than $500 because of brokers fees....hell, onlinne its still like $15/trade. And, say if I invest in stocks right off the bat, that would be $75, so i immediately have to make that much back just to break even! So, I NEED to make 15% if I start with $500 just to break even! That's discouraging. So, paper trading it is until I get about $500-$1000 that I"m just going to completely detach from me. Its not gonna kil me to lose that money...hell, we've all spent that kind of money before right? And, this isn't 'quite' a gamble, its taking an educated risk.
 
Grunt76 said:
My baby AMD just confirmed a buy signal this morning :)
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Hehe...i've come to the conclusion I "need" to learn how to effectively utilize my shorts, stops, limits, etc. Been watching some of theg ood guys and they do amazing things with their money!!!
 
Iron Warrior said:
Roth IRA's are good at this point kwyck. You don't get taxed on them and you can't lose them in case someone ever files a lawsuit against. This is at least what the person who made a presentation told us.
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Yes, this is the best part of a roth or a 401k. Not only do you have a hedge against inflation(>3% on returns), but as the OJ Simpson case provided, nobody can touch your retirement account!(woohoo). The legal system cannot afford to create welfare positions on otherwise taxable citizens. This would cause a vortex of deminishing returns in a zero sum scenario. or you don't s**t where you eat!
 
In my mind, the most important part to investing is discipline. Success is achieved when one develops and strictly adheres to a disciplined investing strategy, particualrly with respect to technical analysis. It does not matter if everyone is saying buy or sell b/c one should adhere to the guidelines that one has selected. This will enable one to understand why one had a loss on one occasion and a profit on another.
Remember, everyones loses sometime, accept the loss and move forward. Do not dwell on an investment hoping it will return in one's favor simply because one does not want to admit that a mistake was made. This is a losers mentality.
To me, investing is a zero sum game, in every market condition there is money to be made despite what others may have you believe.
 
size said:
In my mind, the most important part to investing is discipline. Success is achieved when one develops and strictly adheres to a disciplined investing strategy, particualrly with respect to technical analysis. It does not matter if everyone is saying buy or sell b/c one should adhere to the guidelines that one has selected. This will enable one to understand why one had a loss on one occasion and a profit on another.
Remeber, everyones loses sometime, accept the loss and move forward. Do not dwell on an investment hoping it will return in one's favor simply because one does not want to admit that a mistake was made. This is a losers mentality.
To me, investing is a zero sum game, in every market condition there is money to be made despite what others may have you believe.
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I agree.

I also would be buying AMD today. :)
 
Can anyone offer an opinion on how to identify the "best" mutual funds? What sites, etc., might you be able to recommend that rank MFs on an ongoing basis?

I realize "best" is subjective and driven by your investment goals - but I'm looking into MFs more closely and would like to minimizes opportunities for error.
 
Long track record of CONSISTENT returns more than GREAT past returns. Also, look for funds that have the same managers for a long time, otherwise the track record of the fund means NOTHING.

IMO you should never expect anything from mutual funds with a horizon of less than 5 years. Think in 10 year terms and MFs will do you good.

A lot of investors pick a MF with a great 3-5 year record, keep it for a year or 2, get disappointed, switch and again and again. You look at their returns and unsurprisingly they'd have done much better keeping the first choice longer.
 
kwyckemynd00 said:
Hehe...i've come to the conclusion I "need" to learn how to effectively utilize my shorts, stops, limits, etc. Been watching some of theg ood guys and they do amazing things with their money!!!
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Secret for Profitting in Bull and Bear Markets is a good intro to technical analysis. Good read, written for the layman.
 
CDB said:
Secret for Profitting in Bull and Bear Markets is a good intro to technical analysis. Good read, written for the layman.
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This book?

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EDIT:

Some more would be....

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One by Constance Brown looks good for a newb.

and one more time...

The only one I have read is: Invalid Link Removed
 
It may not be a bad idea to look a some alternative energy stocks right now and metals are through the roof. I have made 48% in less then 4 months on palladium alone. As long as the situation with Iran is uncertian energy and metals will do well.
 
changewave.com This is Tobin Smith's site. He is on bulls and bears which can be seen on fox news saturday at 10am est. I have made a lot of money with some of his advice.
 
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