NT: school me on stocks

[obie21]

Ive been watching a stock and i see a lot of potential in it, have some extra cash,so I'm wanting to buy some shares. so how would i go about that? Etrade? basically i know very little about the stock market.

any info would be greatly appreciated

 

[crcballer55]

Ive been watching a stock and i see a lot of potential in it, have some extra cash,so I'm wanting to buy some shares. so how would i go about that? Etrade? basically i know very little about the stock market.

any info would be greatly appreciated

If you're just starting out, single stocks are one of the riskiest moves you can make. Remember Enron?

Subscribe to a podcast like "The Winning Investor".

If you're really looking to invest, put it on something like an index fund like SPDR or QQQQ that will mirror the market. It's fairly "safe" and you'll learn over time how the companies within those funds gain value and why they're going up and down.

 

[lazyj10]

Wow, extreme much? Enron???

He's not pouring his life savings in it. He isn't going to lose his retirement or pension.

While I don't believe in just doing it w/o any due dilligene, I do believe in having skin in the game and learning from that.

The operative word he used was "extra".

To the OP - assuming you don't have a brokerage account you'll need to figure out the best one for you (suggestion would be to look at the discount brokerage houses since I'm assuming you're not doing heavy trading/day trading). E-Trade, Charles Schwab, Scottrade to name a few.

You'll fill out their forms and fund your account and receive a trading level. From that point you can place your order. You'll have numerous types of order placements to pick from. Market (almost immediately filled at whatever the price is at that moment) or one where you have a bit more control as to how much you want to pay.

Now you'll also have to pick a cost basis to track because brokerages will be sending that information to the IRS. It doesn't matter nearly as much if you get into a stock and exit w/ the same amount and aren't doing a lot of tack ons.

 

[obie21]

yea, money is EXTRA...obviously i want to make some type of money but if i lose it no big deal.

been looking at this stock: ESPI

what do u guys think?

 

[go rilla]

found this on page 1

 

[lazyj10]

I'm not going to tell you what you should or shouldn't do with your money, but I wouldn't jump into OTCs let alone any company trading below $1.

Some discount brokers won't be able to fill the order.

 

[bruce negro]

I would skim through the thread we have going: http://niketalk.com/t/173127/official-stock-market-economy-thread-vol-schools-out

 

[crcballer55]

Wow, extreme much? Enron???

He's not pouring his life savings in it. He isn't going to lose his retirement or pension.

While I don't believe in just doing it w/o any due dilligene, I do believe in having skin in the game and learning from that.

The operative word he used was "extra".
 

The point isn't that he'll lose a significant portion of his life savings, rather, is he willing to risk losing his entire investment on a single stock. I think we can both agree, diversification is the best way to go when putting any amount of money in the market.

 

[lazyj10]

Diversification is meaningless until you reach a specific dollar level. I understand there's more risk associated w/ one stock. However, one could argue the macro events that impact investing in the S&P ETF are riskier than say investing in GE or Microsoft. My response was prior to knowing the type of stock he was looking at, as well.

In theory, it's great but in practice it's very difficult.

 

[6 Rings G.O.A.T.]

Definitely taking notes right now..

 

[bruce negro]

Diversification is meaningless until you reach a specific dollar level. I understand there's more risk associated w/ one stock. However, one could argue the macro events that impact investing in the S&P ETF are riskier than say investing in GE or Microsoft. My response was prior to knowing the type of stock he was looking at, as well.
In theory, it's great but in practice it's very difficult.

Meh, I wouldn't call investing in an ETF "diversifying," but I also agree that the merits of diversification don't present themselves below a certain dollar amount invested. I've been out of the trading mindset for a minute, I'm not sure what exactly I'd play at the moment.

 

[lazyj10]

It's diversification in the sense that it encompasses multiple industries/company types, versus, one....

That's what I mean.

 

[h1n1proof]

I'm not saying buy in, but look into these symbol's history chart:

AMD

AKS

JBLU

MU

S

BSX

CLWR

 

[crcballer55]

Diversification is meaningless until you reach a specific dollar level. I understand there's more risk associated w/ one stock. However, one could argue the macro events that impact investing in the S&P ETF are riskier than say investing in GE or Microsoft. My response was prior to knowing the type of stock he was looking at, as well.
In theory, it's great but in practice it's very difficult.

Meh, I wouldn't call investing in an ETF "diversifying," but I also agree that the merits of diversification don't present themselves below a certain dollar amount invested. I've been out of the trading mindset for a minute, I'm not sure what exactly I'd play at the moment.

ETF's & Mutual Funds are the very definition of diversification unless every stock in that fund is in the same industry. It only takes $1000 to buy into the cheap funds, so it's really not that difficult. That's only $80/mo. over a year or what most people pay going out to lunch in three weeks.