Want to start investing (stocks, etc.) but clueless.. help!

[riaketty]

Well, the title about says it all. I'd really like to start playing the stock market and investing for long-term, and it seems like with stocks so low right now, now would be a good time to jump in. I don't want to mess with more than $100 or so right now, but ING Direct has a program called ShareBuilder that lets you start with $100. They also have a nice $25 incentive right now.

So what should I know? Any good books to check out from the library? Is there a "stocks for dummies" type book?

Thanks!

[velochic]

Hmmmm... are you doing this on a lark or do you really want to invest for the long-term? Stock investing is for veteran and professional investors. Otherwise, it's simply gambling. This is not a good time to gamble, either. I've been handling my/our portfolio for over 20 years and I would not feel comfortable managing a portfolio that is put together with individual stocks.

Can you explain a little more about your goals. Until you have established your investment goals, there really is no second step.

I'm not trying to discourage you.... OK, yeah, I *am* trying to discourage you. Investing in stocks is just playing with money. It's foolish. I'm sorry. JMHO.

[SeekingJoy]

Originally Posted by velochic

Hmmmm... are you doing this on a lark or do you really want to invest for the long-term? Stock investing is for veteran and professional investors. Otherwise, it's simply gambling. This is not a good time to gamble, either. I've been handling my/our portfolio for over 20 years and I would not feel comfortable managing a portfolio that is put together with individual stocks.

Can you explain a little more about your goals. Until you have established your investment goals, there really is no second step.

I'm not trying to discourage you.... OK, yeah, I *am* trying to discourage you. Investing in stocks is just playing with money. It's foolish. I'm sorry. JMHO.

Velochic, are you suggesting she look into an index or mutual fund instead?

OP, are you investing for retirement? Have you already maxed out your IRA/Roth/401k options?

[velochic]

Originally Posted by SeekingJoy

Velochic, are you suggesting she look into an index or mutual fund instead?

OP, are you investing for retirement? Have you already maxed out your IRA/Roth/401k options?

With only $100 to start, no. I'm thinking that she's wanting to gamble away her money. She'd be better off at the slot machines right now. I know that is harsh, but it's the truth right now.

[Mommal]

If you're just getting started, definitely go with an index or mutual fund instead of buying stock in a single company. Investing in an index or mutual fund will spread your risk out because you are investing a tiny bit of capital in hundreds or thousands of companies, and spreading your risk around. Some of the companies in your mutual fund may do poorly, but that will be balanced out by the ones that are doing well. If it's a good mutual fund, it will have picked mostly companies that will do well in the long run. If you buy stock in a single company, the risks are much greater: the company may do fantastically well, or may lose everything, or may go nowhere.

You can even invest in mutual fund via your IRA, which will reduce your tax burden.

[velochic]

Originally Posted by Mommal

If you're just getting started, definitely go with an index or mutual fund instead of buying stock in a single company.

Unfortunately, with only $100 to invest, this isn't an option.

[Sarah W]

Originally Posted by velochic

Unfortunately, with only $100 to invest, this isn't an option.

I agree. Investing with $100 is difficult. Assuming you're only buying 1 stock and paying $5 per transaction (which is cheaper than any place I've seen), that's 5% of your money. You'd have to make 5% gains just to break even and that's not even taking into consideration inflation.

If you're with ING, I'd put that money in a CD.

I used to invest in stocks and it took a lot of effort. You have to do a lot of research not just on the company, but competitors and that particular sector in general. I don't think it's a bad idea to buy stocks, but with this amount not the best idea.

[westernskies]

The ING share builder program is great for learning I think. You can go at your own pace and you can even buy as little as $5.00 worth of a stock. $100 is just $100 and if you are wanting to start small and can live with the possibility of loosing that $100, I think it is a great place to start. We do invest in our 401K etc... but I wanted to "learn" about the stock market so I did try the sharebuilder program. I too only invested around $100 over the last 2-3 months. Our money has grown. I found myself checking out lots of books from the library, researching in depth the companies I wanted to buy stock in, finding out what LOCAL businesses I could invest in, watching videos, etc... I have learned a lot. Can I survive if I loose that $100? Yes of course. I don't think it was a foolish investment at all because besides the monetary value that is growing, I gained in knowledge too... I say go for it!!!

[riaketty]

Originally Posted by westernskies

The ING share builder program is great for learning I think. You can go at your own pace and you can even buy as little as $5.00 worth of a stock. $100 is just $100 and if you are wanting to start small and can live with the possibility of loosing that $100, I think it is a great place to start. We do invest in our 401K etc... but I wanted to "learn" about the stock market so I did try the sharebuilder program. I too only invested around $100 over the last 2-3 months. Our money has grown. I found myself checking out lots of books from the library, researching in depth the companies I wanted to buy stock in, finding out what LOCAL businesses I could invest in, watching videos, etc... I have learned a lot. Can I survive if I loose that $100? Yes of course. I don't think it was a foolish investment at all because besides the monetary value that is growing, I gained in knowledge too... I say go for it!!!

This is it.

I'm not looking to actually gain anything with that $100. I only want to play with it, learn how the stock market works, and see what's there to learn.

[Sarah W]

If you just want to learn, can I recommend a website? Fool.com is one of the best when it comes to investing. You don't have to spend money to learn. You can also pick a stock and track it to see how it would grow/not grow.

If you can lose the $100 and not worry about it, go for it. However if you just pick something and buy it, you aren't investing, you are gambling.

[velochic]

Originally Posted by Sarah W

If you just want to learn, can I recommend a website? Fool.com is one of the best when it comes to investing. You don't have to spend money to learn. You can also pick a stock and track it to see how it would grow/not grow.

If you can lose the $100 and not worry about it, go for it. However if you just pick something and buy it, you aren't investing, you are gambling.

Yep! Put together the portfolio you *would* purchase, then see how it does and learn along the way. You don't have to actually own anything to "play" the market and learn.

The "For Dummies" series of books on investing, written by Eric Tyson is *always* my suggestion for young/new investors. He has been writing that series for almost a decade, and in spite of already having 10 years of investing under my belt when I first picked them up, I still learned a TON.

I have 3 "fantasy portfolios" that I track on morningstar.com. I don't own any of the funds, but I see what would have happened if I *had* invested that particular way. I learn a lot without really losing money. Needless to say, they are all down, but then, our actual taxable portfolio is as well. Well... and our tax-exempt retirement and 529 accounts are down, too. I think everyone's is down. It's almost impossible to have not lost something. Even treasury-backed securities are way down.

Also know that this is a tough time to really know how the market normally acts. Extreme highs and lows are not indicative of the true nature of the market. Keep that in mind. Good luck!

[westernskies]

You are right when you say you don't have to spend money to learn... I agree. But for me it sure is easier for me to pay attention more when there is money on the line.

Thanks for posting the portfolio sites. I am going to look at them

[Usually Curious]

We haven't reached the bottom yet, why would you want to start now?

[velochic]

Originally Posted by Usually Curious

We haven't reached the bottom yet, why would you want to start now?

I beg to differ. I think we are scraping along the bottom right now. It's still a market anomaly, but I *do* think we are at the bottom.

[SeekingJoy]

Originally Posted by velochic

I beg to differ. I think we are scraping along the bottom right now. It's still a market anomaly, but I *do* think we are at the bottom.

Why?