Stocks?

PerfectCreature

I have been debating on "playing the stock market" for quite some time. A co-worker of mine says he has had so okay luck.
I was wondering if any of you guys deal with stocks and how time consuming is it?
Could it be like an on the side thing? etc etc.
What would be the stock "traders" that you use and so forth, any tips or tricks on not to get "burned" or anything like that.
I am just testing the waters at the moment, simply seeing if it could be any fun or anything.
Thanks.

snotpmah

I used to day-trade about 3 days/wk. I'm a realtor, so a few years ago I had alot of free time :frown:
When someone says they "had ok" luck, usually means they've lost a ALOT of money! If your co-worker can't show you his acct. balances (w/deposits and W/D's), take it with a grain of salt.
There are some cool strategies you can use to make some money here and there. What I've found is that you'll lose on the vast majority of your trades, but letting your (few) winners run is where your profits come from. Just cut your losses and look for the next opportunity.
You also need to learn to fight human emotion, cause it will KILL you. Don't stay in a position because of pride. Cut and run, trade like a robot. Pick your trading rules and stick to them. Trust your trading platform and when it signals the end of a trend, act accordingly. Never use money you can afford to lose

PM me and I'll let you know what worked for me.
Bob

kevhed72

Personally, I would pass. Stick with an assortment of mutual funds from a low cost fund provider such as Vanguard. You will spend less time and make more money in the long term. The only broker / day trader that "beat the street" was Bernie Maddof

PerfectCreature

Well, I know that I have a bit of fun watching the price of gold and silver go up and down, which kind of spiked my interest in stocks. The value of things and so forth. I have a neighbor that bought around 50 shares of Netflix when it first came out and paid about 3.16 a share or so he says and has made quite a some. After reading articles I realize that sort of stuff is very very far and few between.
I mean, my job gets me by, but it is not nearly enough to get me by comfortably. We still skimp her and there and with my college degree closing to an end(next year) I will need to pay that off as well.
I have invested in silver and gold, but that is intrinsic (I think that is what it is called) and that value will remain indefinitely because it is a precious metal, so that is a win win and I have bought very low and have made a considerable gain by doing so.
I have debated on sticking with silver which is pretty much no risk, (Although I read somewhere that the government has a law that they can come in and take all your silver? Not sure if its true or not but that would suck)

Anyway, was wondering if I started trading stocks if I could expect the same time of environment.


Plus, I am not 100% sure on how to go about it all either, which is what has keep me on the watching side of it all.

phipiper10

You can spend as much or as little time as you want. Besides your time two big questions are -

What are your risk tolerances?
- Are you willing to lose money, if so how much, honestly ask yourself?
- Is your primary goal to retain what you have and grow it at smaller rate of return

What is your horizon for return on your investment?
- Are you looking to double your investment in 6 months?
- Are you looking for retirement money in 30 years?

Determine above and buy mutual funds as appropriate diversifying based on tolerances and time lines. (That's my advice, then you can spend more time on audio! ; )

That said picking a few winners brings a sense of pride and it's fun to learn and understand companies and economies etc.. Just don't get confident you know what you are doing after your first "win" and go all in on the next big thing!

Investing in stocks can be fun and dangerous particularly now with unrest in N. Africa/Mideast and Nuclear meltdowns which are slowing economies across the globe.

In theory it could be a buying opportunity as things dip here but I'd bet things are going lower before we reach new highs.

Good Luck!

Rich

PerfectCreature

Well, I would like to get big returns of course, everyone would.
I would rather get a ton of safer small returns rather than unsafe big returns for the time being.
The more or less pressing question is which company should I use to do my trading?
Are all trading atmospheres the same? Like scott trade, vanguard as mention and a few others...is it just as simple as hey I like the name scott or do they all have different things to offer.

I would prefer to be a daytime trader, I hate to let stuff sit over night because I know my silver has dipped as low as $4 in one night but again it has jumped as high as $3 as well.....
As for retirement? No, that is not in the question yet. I am thinking more short term, like how can I keep up the payments for my college. (It is around an estimated $16,000 for my college tuition that I have to pay back)
Plus, I need rent, food, car insurance etc etc....
So I figured stocks could be an okay way to go. My silver has already given me a return of almost $200 in the last month, I predict it to continue to go up as the dollar fails, so I figure I could deal with stocks while my silver would be my main concern and stocks as a side to make money to buy silver is really what I was looking at.
So, I have been poking around the trader sites, which do you guys recommend over others?

Big Dawg

If you need the money to live over the next few months (food, rent, etc.), then you cannot afford to invest in the stock market.

I was a portfolio manager for a few years and have an MBA in Finance. I understand very well how the markets work and the potential risks and rewards. Please do not be insulted by what I am about to say.

Based on the questions you are asking, you need to learn a lot more before you invest a single cent. If you decide to day-trade and want to make money, you need to win often enough, and in high enough amounts, to offset your losses plus your expenses. Sound easy? Everyone in the stock market is trading with the expectation of making money, yet every trade has someone buying what they believe is an undervalued stock from someone who believes that the stock has reached or exceeded fair value - and both pay a commission to make it happen.

Phipiper10 asked many of the right questions. You need to understand what he's asking and what your own answers may be.

There is a lot of money to be made investing in stocks, and a lot of money to be lost day-trading.

Frankly, if you are looking for fun and excitement with potential financial rewards, learn how to play poker. The odds of winning (short-term) are much better, and you'll have a better time.

If you are still planning to plunge ahead with this idea, and would discuss this with me, I'd be happy to speak with you.

PerfectCreature

I do fully understand the risks and and well aware of the fact I know virtually nothing about trading. For the time being I have a little side money, not a lot, around $20-$50 per week to play with, once summer hits and I can open up my work hours I will have more to play with.
With that said, if you are willing to educate me I am more than willing to listen and attempt to learn the "game"
I do watch fox business most mornings and have a basic understanding of rising and falling stocks, buy low sell high. Watch for market premiums, events and all that stuff really determine the values.
I would prefer to start out buying really small stocks....ones that I wont take too much of a hit on if I lost to start out and gradually as I win some and lose some try larger stocks. I figure, why go into water above my head when I can still only walk waist deep....

snotpmah

+1000 to what Big Dawg said!

I was just about to say the same thing, also with the poker suggestion.
Based on the questions you're asking, you are NOT a candidate for the all-encompassing stress of short-term trading at this time.

It will be years before you will reliably make enough money to supplement your income w/trading. If you must, I'd recommend you get some books on technical analysis, sell off some old stereo equip. and put $500 or so into a Scottrade or TD Ameritrade acct. You will most certainly lose it all, but you will have learned so much in the process. Consider it "tuition".

And don't be too hot on silver; it goes up, it goes down. Oil goes up, and goes down. Oceanfront property goes up, and goes down. Everything has a pattern. If you can capitalize on those patterns you can make some money, regardless of what's happening in the world.

phipiper10

Not to be a downer but $20-$50 will not even cover the cost of the trades. I think you might seriously have to consider some other alternative method to increase your cash flow.

Tour2ma

Good on you going with the questions, Rich, and good info to boot. Made me redo my "age-goals-etc." post....

EDIT: Scottrade is $7 per trade... up to 5000 shares.
And BigDawg beat me to the cautioning and said it better.


PerfCrea,
A couple initial thoughts....
- Day trading is towards the deep end of the pool... right next to options... and commodities. It's really not for novices.
- Silver (a commodity) is anything but safe. Kinda reads like you are holding the actual metal, which is fine, but comissions, both buying and selling, may shock you. There are ETF's, e.g., SLV. Opinions vary, but few would coach more than 20% of your money in precious metals... most would say more like 10%.
- As young as you seem to be a diversified dividend portfolio may be the ticket.

While I am not a Jim Cramer devotee, I found his book, Real Money, to be a good primer. I've also skimmed Jim Cramer's Mad Money and his latest, Getting Back to Even. Neither added much new info; any of these your Library has would be worth a read.

Cramer's show on CNBC got annoying fairly quickly, but I still have it on during Club Polk time with an ear peeled for new ideas to look into.

The one show that is must see IMO is CNBC's Fast Money (M-Th @ 5:00 EDT)

Broker-wise, for stocks/ ETF's I've been very happy with Scottrade... very fast... very cheap.

jflail2

Big Dawg said it best. Honestly, to make a good decision for investment, I think you need to have a much better than average understanding of how everything works in the world of finance.

Pricing multiples, dividends, leverage, fixed charge ratios, growth rates, etc...there are a ton of metrics that you need to understand to make an "educated decision" as to if an equity/bond/etc is over or under priced to you.

And you cant just understand them in a vacuum, you have to understand how all those metrics affect each other. It's not as easy as the commercials make it out to be; even with the more user friendly trading platforms.

Good luck either way!

shack

Big Dawg wrote:

Frankly, if you are looking for fun and excitement with potential financial rewards, learn how to play poker. The odds of winning (short-term) are much better, and you'll have a better time.

Good advice.

In my experience day traders rarely make money over the long haul. Most invest using margin accounts trying to take advantage of the leverage they afford. It is hard to make money on your own funds and now margin accounts are much more difficult to come by.

If you want to go ahead, my advice is to pick a couple of industries/segments you are interested in or already know something about. Then research...research...research...study...study...study...and understand what makes those stocks move and the underlying fundamentals of the companies. Too many people want to buy/sell based on hints, rumors, or just random stuff without ever understanding the dynamics of the price of the stock. Those are the guys that make the "investors" real money.

I prefer to buy and hold till a particular stock reaches a certain threshold based on my research. If it drops to my stop loss price it's gone...if it reaches a certain high point I usually sell unless there is some major change from my original estimates. No need in getting greedy. Many people sell too soon when it starts to slide...or hold too long when on the rise.

Poker sounds pretty good!

mhardy6647

If you wish to speculate, treat the stock market like any other form of gambling. Risk only what you can afford to risk and play off of your winnings.

Never sell, or buy in a panic - the weirdest, dumbest thing about the stock market is how many people are exactly out of phase with its movement; buying high and selling low. Don't do that!

:-)

PerfectCreature

It does appear to be quite a bit of work indeed.
As for silver? Yes, I own a fair share of a stores supply of silver coins. I bought a little over 3 pounds of silver when it was at around $19 an ounce. I since sold all but 1 pound when it hit the $37 an ounce spike. So, I get the concept of buy low sell high.
It was merely an idea. I would not want this stock trading however to take fold over my studies and work which it seems it very well may.
That is why I decided to post, get some input on what it is all like.
From what it seems, the truth holds; you need money to make money.

I think I will let this post go on a bit, lets say, I get set up buy a few stocks, what should I be doing?
I would like the spin on what I actually would do.
I would research my stock. Buy it. I would watch it, I would most likely what the behavior of other stocks in its category right? I would then watch the news for any events regarding that particular stocks area. Then I would like mentioned create thresh holds....buy and sell when either hits.
Pretty simple concept, but a lot of effort goes into it from what it appears. I poked around etrade, scott trade, and the other mentioned sites for some info. They all say most of the same stuff. Which is nice and all, but it does not go much in to detail. It seems they want you to rely on their "prediction" software to buy and sell and not real information....
I think for the time being I will let this sit on the back burner, may pick up some of those books, were there any others that could be of good reference?

DarqueKnight

PerfectCreature wrote: »

Could it be like an on the side thing? etc etc.

I am just testing the waters at the moment, simply seeing if it could be any fun or anything.

If you want a good supplementary revenue stream that you can have fun with, find a good or service that is in demand in your area, that is under served and that you can do part time.

Good luck with your sideline hustle.

megasat16

Very good advises are given here.

I know you want to make a few coins but now is more chance of losing than winning.

Personally, I would start an investment somewhere other than stock. or Buy more silver and gold.

4406bbl

Its easy to make money on stocks, all you need is for the Dow to drop below 7000 like in 2008 and buy the big names. When and if they get the nukes under control in Japan invest in cement, steel ,lumber, and machinery like cat and don't hold it too long, SELL when you have profit and move on. Stay away from power companies right now.

dorourke07

mhardy6647 wrote: »

If you wish to speculate, treat the stock market like any other form of gambling. Risk only what you can afford to risk and play off of your winnings.
:-)

+1

The stock market is essentailly gambling. Consider how prepared you are to walk into a casino and beat the house on regualr basis. There are no single solutions to winning and that's why you only hear of a one-off successful guy or a one-time hit on a stock. Index funds are pretty safe right now, emerging market funds are an opportunity but don't look a this as cash machine. If you can generate a 10% return this year, well ahead of the market, you only make $6-$7 on ever $100 invested after taxes. A lot of risk for little reward.

PerfectCreature

Wow, that is quite a small reward for the risk....
Keep the advice coming. Thanks.

Casinos? I played slots once and won $32 in quarters ...
Anyway, as for gold and silver, I plan on buying some more once it drops again, it appears to be dropping, as for hustling? eh, that is not something that could provide an large outcome it would be to time consuming and anything giving a good return rate would most likely be illegal.

From what you guys are telling me, I would essentially be better off buying scratch tickets. And the DOW is well over 7000, as for the Japan adivce, that seems like a very nice idea since they will have to do massive rebuilding....

Investing gets mentioned quite a lot. Would I consider my gold and silver investments? Or should I invest in something else?

jflail2

Sure, your gold and silver holdings are investments.


If you want to invest long term, you could possibly find an ETF with a very consistent dividend stream. An ETF focused on REITs for example might not be bad. REITs have to pay out 90% of taxable income to their shareholders in dividends to maintain their corporate tax status, so the stream of dividends would probably be very consistent over time, and those dividends alone should provide a better yield than the "risk free rate" (the 10-yr T note rate.)

shack

Gold and silver are commodities and subject to price swings that are much more unpredictable than stocks. At least with stocks there is underlying value and information with which to make informed decisions. If you are only in gold and silver you are at serious risk. Diversification is the key to long term investing success.

IMO the way to invest is for the long haul. I am a fan of regularly investing (monthly) in individual stocks or mutual funds (dollar cost averaging). It doesn't have to be mutual funds, but can be 5 or more individual stocks or two or three good mutual funds. As I said earlier, it is important to understand what you are investing in...individual stocks or mutual funds. Review semi-annually or annually to make sure your strategy is sound but don't panic at every twitch of the market. I don't like day trading and I don't like trying to time the market because those generate more losers that winners for the average investor as they simply do not have the information and resources to make it work.

tonyb

snotpmah wrote: »

I used to day-trade about 3 days/wk. I'm a realtor, so a few years ago I had alot of free time :frown:
When someone says they "had ok" luck, usually means they've lost a ALOT of money! If your co-worker can't show you his acct. balances (w/deposits and W/D's), take it with a grain of salt.
There are some cool strategies you can use to make some money here and there. What I've found is that you'll lose on the vast majority of your trades, but letting your (few) winners run is where your profits come from. Just cut your losses and look for the next opportunity.
You also need to learn to fight human emotion, cause it will KILL you. Don't stay in a position because of pride. Cut and run, trade like a robot. Pick your trading rules and stick to them. Trust your trading platform and when it signals the end of a trend, act accordingly. Never use money you can afford to lose

PM me and I'll let you know what worked for me.
Bob

Good advice too, I used to trade currency,may get back into it someday. Never trade with money you can't afford to lose. Like going to Vegas.
Stocks is a tool, and should be taken care of as such. You don't buy a tool to throw it away the next day, stocks are the same. A longer approach is needed when buying into stocks. It is not a get rich quick vehicle that some make it out to be. If you want to invest in stocks, plan on that money not being available to you for awhile. Do your research. May be better if you put the coin in a no load mutual fund. Just to get your feet wet.
Plenty of discount traders,like Scott trade out there that offer some good research tools and trading platforms. Stay away from those "I got the inside scoop on this stock" people. They are like the "I got a line on this horse " crowd.

steveinaz

I have a number of investments (bonds, S&P, Small cap) but I'm a "buy & hold" kinda guy. I don't have the knowledge to do day-to-day trading. My yields aren't spectacular, but they are pretty damn good using this strategy. Last year my combined yield was 12.84%, not too shabby. As long as I stay at or above 6.5%, I'll meet my retirement goals.

squeeb

I have been in Finance for over 20 years, MBA, worked for a Finance professor in college, blah, blah, blah ...

You have been given very good advice - especially for an audio forum.

Here is another way to look at things. If you have debt - pay it down or pay it off with your extra money. Whatever rate you are paying on it - 10%, 15% or 20% - that is your GUARANTEED return as you pay it down. Not too many investments out there will give you a guaranteed return.

Next, you say you are renting. After paying off debt, start saving for a down payment for a house. I am still a big advocate of home ownership. By all reports, the cost of renting is going to go up.

Those strategies are not nearly as glamorous as day trading; but they are proven and time tested. Good luck.

steveinaz

...also keep in mind I plan to work for another 11 years. Once I get closer to retirement (5-6yrs) I'll start backing my percentages off of the higher risk investments, pushing everything into the lower yield/safer investments.

Pycroft

kevhed72 wrote: »

Personally, I would pass. Stick with an assortment of mutual funds from a low cost fund provider such as Vanguard. You will spend less time and make more money in the long term. The only broker / day trader that "beat the street" was Bernie Maddof

I agree with this whole-heartedly. Stick with Vanguard and Fidelity, deposit consistently (I try to do 20% of my takehome - most of the times less due to financial considerations) and then don't play or touch it. In the end you will make out like a bandit.

I usually (Not always) find people who are looking to make a big score or make a quick buck lose money. If you're in for the long haul, you can do very well.

James

steveinaz

Education of market returns is a must. Look at the histories, and diversify to buffer from serious losses. Typically (but not always) when stocks drop, bonds tend to rise--it makes for a good offset.

Get your learn on, I'm no guru by any means; I know just enough to stay out of trouble.

steveinaz

Pycroft wrote: »

I usually (Not always) find people who are looking to make a big score or make a quick buck lose money. If you're in for the long haul, you can do very well.

James

Actually the "long-haul" is a perfect scenario for stock investments, as you'll have plenty of time to recover, should you take a hit. Of course everyone has their tolerance for risks, and this--plus your timeline has to be taken into consideration.

jflail2

squeeb wrote: »

I have been in Finance for over 20 years, MBA, worked for a Finance professor in college, blah, blah, blah ...

You have been given very good advice - especially for an audio forum.

Here is another way to look at things. If you have debt - pay it down or pay it off with your extra money. Whatever rate you are paying on it - 10%, 15% or 20% - that is your GUARANTEED return as you pay it down. Not too many investments out there will give you a guaranteed return.

This is superb advice, especially for credit cards and things of that nature.

doggie750

Bro, u just entered the kingdom of AUDIO world, not an ideal place to seek for financial-stock advice. HE HE HE

Pretty sure u got cleaned up/ smacked by the gurus here. RIGHT!

Anyways, just my 2cents have a PLAYMONEY (Win or Loss) then play.....no more no less. Use all the senses u got coz there's no such thing as GUARANTEE, it's gambling but way better than Casino like Poker (IMHO, u got more strategy and pointers unlike any thing in the casino).

True u will lose, so get some balls to handle it otherwise 4get about it.

Always have some cash to float for recover, as needed, trust me no one is immune to this.

NOW if you win, DONT BE GREEDY (guilty here), have a threshold and commit to that. (+20 to +30%)

Know your accounts, and play what you know!

Keep in mind, Options can be cheerful and be deadly so be careful.

REMEMBER, you will loss money to gain money.

IT's all about the balance, don't go over board/ load. What comes up, will go down and vice versa. Play ur card right and don't seek to be rich instantly, you will do just fine.

Educate yourself.

HOPE that helps,

D0661E750......no savings in the bank, all in TRADINg since 1998.