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Advice for a investment newbie...

3K views 25 replies 11 participants last post by  KingNikan 
#1 ·
Fellow 4players and investment gurus, I've been looking through the investment forum and been trying to learn as much as I can from the posts I've read. I know I'm just scratching the surface but I'd like to hear any advice or tips you may have for someone like myself which has little understanding of the category. I have been reading up on stocks through google but would very much appreciate any other help I can get from my fellow forum members. I will be trading leisurely on the side, this will not be a main source of income but I would like to have a little extra from this. I plan on holding my shares for atleast a few months, but most likely a year or two.

Just recently I bought a few shares of NFLX @ 86.13 earlier this week and I'm seeing that it's still declining :(...I'm probably going to buy some more if they hit the mid 70's but I think NFLX has the potential to go back up once they solidify their new plan and do some damage control.

Secondly I'm 22 and I'm also thinking of investing in a mutual fund for my later years (55-60). Any good suggestions on which ones I should look at or stay away from? I'm looking at maybe Vanguard, but I still have a lot of research to do. I'm most likely going to be investing in a mutual fund that's mainly technology based.

Thanks in advance for any help or suggestions you may have, also PM's are always welcome.
 
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#3 ·
Sorry Schmidty, I didn't notice it was too broad. I guess it reflects my knowledge of stocks haha. Anyways, I guess the main question should be are there any sites or blogs anyone would suggest me on reading up to expand my knowledge and give me some good tips on what to look for when investing. I know many are secretive on what stocks to get into and stay away from so I won't ask that of people. But just curious on what signs to look out for when getting into the "game". Thanks!
 
#4 ·
I like seeking alpha.com they have some good info. If I were you I wouldnt touch Netflix it was a momentum stock which went down faster than it went up. There are so many other good buys out there. Take a look at FIO they make flash memory that goes into apple products and other smartphones, tablet etc. Plus Steve Wozniak is their Chief Scientist which doesnt hurt.
 
#6 ·
hey bud! i started trading around your age too. Mutual funds are motly a ripoff espeically if your looking for a longterm one. AFter expenses and fee's most can barely even beat the average of the s&p for the year. I*ve got a ton of friends on wallstreet and in the hedgefund business most of them can barely make 10% in a year which for a young guy is not going to make you any money. Your better of learning, reading, and talking with other traders and finding out the ways to make 10% in a month then settling for it in a year. Unless you got a 200million trust fund then id settle for the 10%.

HOlding stocks for a year or 2 also is less then a 50% chance of makiing any good money. 90% of stocks will have most of their upthrust in just a handful of days in the market. Learn to capture those spots of inflection where a stock explodes. Ride the meat of the move and get it. When trading with a small amt of capital its all about the most efficient use of capital. If your in dead money or a stock thats not moving then your basically losing money as you could be in a stock thats about to rip 20%

The most important thing is to figure out what your goals are. Then find a method that suits your risk profile along with your goals and then obtain complete master of that method. That involves stock selection aka identify stocks that fit your method. Then find the optimal low risk entry point, position sizing aka how many shares to buy, risk management aka where to exit thej stock if it goes against you, target, etc.

also one of the things ive learned in trading. best strategy when holding a stock longterm is average up...rarely down. if the stock goes down from where you bought it there is a good shot you misanalyzed it. You never double down on mistakes but always double down when correct.
 
#7 ·
hey bud! i started trading around your age too. Mutual funds are motly a ripoff espeically if your looking for a longterm one. AFter expenses and fee's most can barely even beat the average of the s&p for the year. I*ve got a ton of friends on wallstreet and in the hedgefund business most of them can barely make 10% in a year which for a young guy is not going to make you any money. Your better of learning, reading, and talking with other traders and finding out the ways to make 10% in a month then settling for it in a year. Unless you got a 200million trust fund then id settle for the 10%.

HOlding stocks for a year or 2 also is less then a 50% chance of makiing any good money. 90% of stocks will have most of their upthrust in just a handful of days in the market. Learn to capture those spots of inflection where a stock explodes. Ride the meat of the move and get it. When trading with a small amt of capital its all about the most efficient use of capital. If your in dead money or a stock thats not moving then your basically losing money as you could be in a stock thats about to rip 20%

The most important thing is to figure out what your goals are. Then find a method that suits your risk profile along with your goals and then obtain complete master of that method. That involves stock selection aka identify stocks that fit your method. Then find the optimal low risk entry point, position sizing aka how many shares to buy, risk management aka where to exit thej stock if it goes against you, target, etc.

also one of the things ive learned in trading. best strategy when holding a stock longterm is average up...rarely down. if the stock goes down from where you bought it there is a good shot you misanalyzed it. You never double down on mistakes but always double down when correct.
 
#8 ·
great words^

one thought i can give you off the bat, i personally i think a couple shares of one stock at $85 a pop isnt going to mean much if it jumps up a few cents or even a dollar; id run a much smaller amount around say the 25-50 dollar mark (fi you can afford it) and when you learn more, jump into higher amount of shares
 
#9 ·
1. Get out of any debt you have
2. Make sure you max out all retirement funds
3. Invest in stocks/mutual funds/real estate depending on your goals

Buying and selling short term stocks are a good way to make a quick buck. Also a good way to lose your money. IMO its not a great retirement strategy.
 
#10 ·
Thanks a bunch for all of your input guys. There's so much more for me to learn and I'm going to try to absorb all that I can.

Bullsonwallstreet, thanks for putting in your time and effort on explaining some of the things you've mentioned. Definitely worth thinking over. I've actually seen your videos on your website and I'm slowly starting to understand what the charts are representing :lol:. Your second and fourth paragraphs are very insightful and great advice. I'm just trying to feel out when's a good time to buy and what not.

Ddigangi, yes, I've been trying to look for some companies which are around that price range but I guess I haven't done enough research yet on the companies to "predict" which ones are promising in the near future and that may jump up that Bullsonwallstreet has mentioned. But what you said is very true and I will continue my search.

Donblackie, thank you for your 2 cents as well. Currently I have no debt and I'm still looking at these stocks on the side. Secondly, what do you mean by "maxing out all my retirement funds"? Sorry for the silly question but I just want to stay on the same page. Thirdly, I heard from another trader which I've met through work that; if I were to invest into a mutual fund, save atleast 20-30 dollars a week and put it into that fund religiously that the moeny in the fund will be worth a good amount of money by the time I'm 60-65 which I could use for retirement. This of course seeing that the market is doing well and not in a trough. Is this true? Also I understand that may not be the wisest and least risky way to save for retirement but like I've mentioned, I've still have a lot to learn and a lot more research to do.

Also, seeing that many members seem to be on the same boat of which trading evey few days vs a year a or two, would you recommend me staying with scottrade? They charge a 7 dollar fee per trade and I can only imagine the money I'd be throwing away if I were to stay with them assuming I start trading regularly more frequently. Are there any other services you would reccomend? Thanks again for all your support and help 4players. It's much appreciated!:bow1:
 
#14 ·
hey send me an email kunal@bullson.ws i got ebooks on trading, investing, almost anything. Like 500 of them! i been collecting them for 10 years!

and dont give up! its very admirable you want to take charge of your finances and your future. Its a suckers bet to put your money in someone else's hands. Nobody else is responsible for you and your family except you! your the man of the house its good to take charge and learning this all at an early age is very commendable
 
#16 ·
run awau from the market!! USA and Europe are fvcked and there is nothing anyone can do. The Euro and Dollar are both going to collapse at some point. Faith and hope in these have disapeared. good luck though
 
#21 ·
Thanks to everyone who has contributed to this thread. It helps a lot and I truely do appreciate all the advice and help given. I have already sold my NFLX stocks a few days ago and glad I did. I have invested in two other ones so far, and they're doing well at the moment. Made back some money from the loss of NFLX.

Shawny, thanks for your posts and I understand I am making many mistakes. I'm sure I will continue to do so, so I will try to learn as much as I can and minimize mistakes in the future.

Bulls, thanks for your continued support here and I will be contacting you shortly.

M6, I will also be sending you a PM, thank you as well for your help.
 
#24 · (Edited)
If you decide to hire anyone, make sure they are certified, and are fee-only. This way, they will have your best interests in mind rather than their own commission.

From your original post, it's hard to tell exactly what you want. I can't decide if you want to invest for the future, or want to try to get rich off the market in a short period of time. You can't beat the market, and you can't time it. Some have gotten lucky, but it doesn't last forever. I don't recommend trying your hand day-trading, not only because broker fees will eat up part/most of your gain, but also because it's risky. If you do decide to go for it, make sure you know what you are getting into. It is certainly possible to profit, no doubt about that, but you have to have your stuff together and know what you're doing.

If you just want some basic pointers on where to start as far as basic finance/investing, I (along with most personal finance gurus) would say:

First:
Get rid of all debt
Establish an emergency fund (some say $1000, some say 3 or 6 months of expenses)

Then:
Contribute to 401(k) up to your employer's match
Max out a Roth IRA
Max out 401(k)

And then, after getting your necessities in order, perhaps you can spend any leftover/play money on trying to beat the market? This kind of stuff is my hobby and soon to be career, so if you have any more questions, feel free to ask. And I'd like to hear others' opinions too, I know this isn't the plan everyone else operates on (kunal00 obviously has a different mindset from me, and he appears to know what he is doing, and I respect that), but it is a plan easy enough for anyone to follow if they don't know what else to do or where to get started.

Also, for more detailed ideas and help with finances (particularly retirement-related, but open to other discussions as well), I suggest visiting Bogleheads Forum. Everyone there is very welcoming, open-minded, and willing to share valuable information and experience with new users.
 
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