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Stocks and how to invest?
01-24-2013, 12:02 PM
Post: #4
 
Try some good books like Investing for Dummies, The Complete Idiot's Guide to Investing, and Mutual Funds for Dummies for a good intro. If you really want individual stocks, try Stock Investing for Dummies.
Don't do ANYTHING until you know yourself first.

The question you need to answer is WHY you are investing. Different people have different goals. Is it for more income? For retirement? For someone's education? Plus how old are you and how long do you want to invest? How much risk are you willing to assume?

These are all very critical questions and they will determine what kind of investments are right for you. Don't believe anyone who has a "one size fits all" kind of investment. For stocks typically you are talking about at least a 5 year investment period. If less, consider getting into bonds or a bond fund instead. Many people choose an appropriate mix of the two.
Also be aware that online you'll never find a shortage of flim-flam types or people pushing very risky activities. Know the difference between investing and speculating - and avoid the latter no matter what - at least for several years until you are experienced. Otherwise, you could lose your shirt.

If you want to get into the market but don't know what stock to pick, consider an index fund. Instead of throwing all your eggs into one basket (one company), index funds can invest you in dozens, hundreds, or thousands of companies all at once and so there is less risk. This protects you if any one company or industry runs into trouble. They're also professionally managed, by experts doing more research than you could ever dream to. For bonds, the returns are less, but more solid.

If you are thinking of retirement, consider a Roth IRA. Your money grows tax free, and when you retire you can withdraw it tax free as well.
You first need to pick a company to invest through. Some of the best are Vanguard, T. Rowe Price, Fidelity, and Schwab. Avoid the big banks like the plague. Don't let them rip you off with loads (sales charges) and fees. Check how much the company charges you as an expense ratio. A good one might charge you 0.2-0.8 %. If they charge more than 1% than go somewhere else. And if they charge any kind of 12b-1 fee, hold on to your wallet and RUN.
Getting individual stocks make more sense if you really want to buy stock at a place you work at, or want to really get involved and are the hands-on investor type. If you want to be more passive and have things grow over time, index funds make more sense. If you want to see some of the variety out there,
For more information, try looking at
https://personal.vanguard.com/us/funds/v...torder=asc
and play with it, comparing funds with more or less risk.
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Messages In This Thread
Stocks and how to invest? - bullseye - 01-24-2013, 11:54 AM
[] - DAVID - 01-24-2013, 12:02 PM
[] - kelby7670 - 01-24-2013, 12:02 PM
[] - Tom Tomorrow - 01-24-2013 12:02 PM

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