How did you first start investing in the stock market?
I'm looking to invest some money that I've saved up for a couple of months before going to university in the stock market. The focus is for me to to gain some experience in managing my own portfolio early in life. Also, IMO it seems a lot better than joining a club to manage the university's portfolio.
So, if anyone who used to be in my position could give me some advice on how I could grow my investment (steadily), then that would be highly appreciated. I already opened a discount brokerage account and have read books on investing, The Intelligent Investor, Market Wizards, etc.
Thanks a lot!
I know when I first started getting interested in the financial markets, i played on the virtual market for a little while just to learn the ropes. Then I opened my own brokerage account and tried different strategies based on different trading and investing books I had read. I personally believe that there isn't one way to make money in this market and you have to find the strategy that best fits your personality. Good luck!
P.S. those books you have read are all great to start learning about investing.
I would suggested investing in a few (4-5) ETF's first just to be in the market and diversified. If you go through places like Schwab or Fidelity you can trade certain ETF's for free which is great. Now that you will be in the game begin looking at different companies and follow their stocks everyday or week and get a feel for how they are trading. Once you see something you like sell part of one of the ETF's and invest in that company. I think this is a good way of investing in a "smart" fashion as well as be the building block for your investing.
Thank you so much for all the comments! Any suggestions on basic strategy that I should follow would also be highly appreciated.
In terms of basic strategy start out simple. Small Cap; Large Cap; Maybe a Divdend ETF or REIT ETF and an emerging market Etf. In terms of stocks I would stick to making fundamental long term picks that are large cap stocks along the lines of IBM, GE, AET, CSX. Stocks that wont get hammered and are good long terms bets. This should keep the volatility of your portfolio low until you get a grasp at what your going. Stocks that I listed are examples not something that I am suggesting buying.
Thank you very much!
Good stuff ct, thanks
I prefer small companies with good products which haven't yet got off the ground, and invest for the long term. This is only viable if you are fairly sure that you can tie your money up long term, and can ride out any bumps along the way.
I started in college with a hilariously low volume.
When I was in jr. high with $1000. I was making money and then forgot about the stock hahaha.
Then summer before senior year of HS for the LEAD summer program. Since then I've followed the markets but felt that "paper" money doesn't simulate the psychological effects of real life.
Once I started working I would put $1000 amounts into stocks for my first 6 months, just to see what it felt like (and losing it big on a biotech stock) hahahah. Then it went to $6000 lots, then $12,000 lots. I range between 6-12 now, with an occasional 4.
I'm sure when I'm older I'll start to think "if I lose this, it's basically a year's salary." I wonder what that will feel like.
You really have to psychologically test yourself and see what you're wiling to win/lose. I was up $10,000 at one point on Fannie Mae this year but lost everything and took a $2000 hit.
No amount of books teaches you like the world teaches you. The earlier the better.
Looking for my first stock to invest in - should I wait for markets to fall? (Originally Posted: 05/11/2015)
I have roughly 7k US and I wanted to start investing to:
a) learn how to manage my own funds b) make some extra $ c) highly interested in investing as a career path and this could serve as a valuable experience.
I am looking for value and I am finding it extremely difficult to find anything that seems cheap or good value for money these days. US stocks are at 2008 multiples, or higher. I believe the growth story in Europe driven by a recovery in Portugal/Spain/Italy but this seems already quite priced in if we look at how expensive these indices are.
Hence, I have started to look for industrial companies that I particularly like such as the German Continental or the French Plastic Omnium. They seemed liked a good pick as they could benefit from a a lower euro and the European recovery. However I found myself looking at companies that usually trade at a 5-7x EV/EBITDA at a forward Y+1 EV/EBITDA over the top of that range.
What I am thinking that could be interesting ideas:
-Play the recovery in oil buying into some companies with exposure to the commodity. (This seems like some of the few things that could be cheap now)
-Long Greece (I do not have the courage/balls to do this)
-Play the consolidation in the telecommunications industry in Europe buying an ETF that replicates the sector
Any feedback/ideas would be more than appreciate it!
Thanks guys!
Unless you are trading options, which will really get you an education quickly, I'd probably focus on A. and C. as objectives which i'm pretty certain you are aware.
Personally, when starting out, I think it is smart to stick to what you know and where you feel comfortable generating a thesis and then committing a small position to that to test it. I would use this as an opportunity to really disassociate yourself from the money you are investing and commit yourself to a thesis and rules surrounding whatever trading you are doing. I think it is hard to run anything 'value' wise with that capital base because you generally need to commit that money for longer periods of time which doesn't really allow you to get a feel for trading (which I think is paramount to understanding the difference in mentalities needed). So, looking at Greece, if you think that that market is 'cheap' because it is essentially assuming there will be a catastrophe then maybe you take a small long position. But if it starts moving against you, don't convert that thinking to 'oh, Greece is undervalued because of X, Y and Z.' Cut the position and move along. You get my point I'm sure but It's essential to keep that in mind when you are first starting out. It's really, really easy to turn a trade into a value driven investment. I don't know much about the telecommunications industry in Europe, but i'd probably play that a bit differently than buying a sector ETF either with pair trades on the acquired/acquirer or just taking positions in entities who could get taken over and nabbing whatever premium they are paying for them.
I find that value is an incredibly hard thing to actually pull off, and it impresses me when people can spot it and hold on long enough to realize that value.
I see your point and I agree that it is important to commit to a thesis and to become disciplined regarding whatever trading rules I choose. However, I was thinking about investing only in equity following these rules:
Financials: 1)EBITDA c.a 200 - 500m / Revenues over 1bn 2)Historical EBITDA margins over 8% 3)5yr Revenue CAGR 1-3% 4)5yr Average FCF positive 5)Solid dividend yield (c.a 3%) and over 40% payout ratio
*Would be flexible regarding 4 and 5 if there is a non-recurrent capex requirement (Spectrum for telecoms or an acquisition, for example) and I would then use a 7-10yr average.
Industry -Would focus on business models I understand -High barriers to entry -Pricing power
Valuation: -Over 30% below 5yr average for whatever ratio I might consider the most appropiate for the industry or a mix of weighted multiples. -Ideally, The discount would be to peers as well as to the overall market so I could even do an RV and have a market neutral position. -The reason for the discount could be (what I would consider) an overreaction to negative news
Basically, I would simply bet against that a solid company would overcome a certain obstacle.
Examples of potential obstacles: -Exposure to Greece -Exposure to Russia -Overreacction to negative results do to FX effects -Exposure to a falling commodity (iron ore, potash, oil, etc)
Obviously, I would look into every obstacle and every particular company to see if this overreaction (imo) exists. Average trade horizon 6-12 months depending on the catalyst. Usually the catalyst could be an improved financial performance 2-3 quarters in the future since the negative obstacle.
Your theses seem to be very macro speculative oriented while stating that you are searching for value. Unless you have put in the time to understand why oil will recover, you're speculating. Your bets are also extremely followed. Do you think you can add value to an investment idea on going long Greece because the economy has been beaten down? Maybe the shorts are right, do you really think you are going to be smarter than the other side of that trade at this point in your career? I would start by taking smaller positions in micro caps where you start from a bottom up approach. You will be able to learn more about each companies industry and what is driving that industry from a bottom up approach rather than starting top down. You will be able to learn a lot as you develop a theses for each investment and have a concrete understanding of why you are investing in it. If your theses turns out to be wrong, understand why and move on. Don't sell just because it goes against you. Personally I believe value is the way to go and you're not going to be good right off the bat (I'm certainly not), but if you enjoy it, there isn't a better area to invest your time.
Lastly, deconstruct previous investors ideas. There is plenty of info out there, especially Value Investors Club, where the ideas may not be the best (you get breadth), but it gets the juices flowing.
I agree that I am shifting towards macro themes but this is simply BC I have been looking at mid-large caps and I can't seem to find anything that is relatively cheap. Maybe these stocks are too correlated to the index and I should focus on micro caps as you mentioned. Thanks for your tips! SB'd
Forgot to mention, put a grand of that towards books. Read and apply, find what works for you.
How many positions are you aiming for in your portfolio?
7-10
Even if a company meets all of the fundamental qualifications that you are looking for, there is still a good bit of gambling involved when if comes to political matters and macro trends. If you insist on taking such a position, I would make it a smaller one, unless this is just throw away money. I'm currently holding a very concentrated long position on a micro-cap gold miner...its been a fucking gut wrenching ride and even though I'm taking a profit (miraculous in this gold market), I'm not sure it has been worth the stress. Also, be prepared for a lot of volatility if you go the micro cap route. Spreads can be enormous, even in a stable political and economic environment.
And to answer your question about waiting til the market falls...I'm sitting on an abnormally high amount of cash right now because I just don't see many opportunities that I'm really comfortable with.
I would say given your expected time frame, you might as well throw value out the window. 6-12 months is a very short time frame to hope for value to correct itself. Sure you can hit it right some of the time, but I think that is too large of a constraint to see your theses properly work out. If it is that obvious within the next six months it has likely been discovered. There will be those one offs where you could bet large, but for the most part I would recommend a longer time horizon. Your trying to think differently than the crowd and the crowd will be much more correlated in the short term than the long term.
Also when I say correlated I mean that the crowd is most likely correctly correlated in the short term. Unless your trying to bet on earnings surprises, which is a crapshoot, you have a much better chance of thinking of something unique and correct in the longer term than predicting that apple will sell more iphones next quarter. There is plenty of good info out there and if your are truly interested in value, graham and Buffett have laid out a nice framework to get started.
I think I might not have explained myself clearly. I am not looking to strictly follow a value investing philosophy (Graham, Buffet).
I am looking for good value for money in a very expensive market imo. I believe overreactions seem like a good buying opportunity. Also, I was even considering (I stress considering) "betting" on macro trends or sitting on cash until I see prices I find attractive.
Also, I was hoping to hear about what other monkeys might be looking at in this environment.
Thanks!
If that is the case I will just reiterate; is there any idea you believe you will be able to add to your side of the trade that the other side hasn't already thought of? If you think it's tough finding a decent micro bet try making a macro one where there are hundreds of billions at stake.
I think if you want to really see if your theses works..you have to increase your investment horizon. Your only increasing your chances of capital loss by having such a short holding period. I think you should always keep Mr. Market's advice at "arms length" in relation to your decisions if you are value investing. Personally I am in a similar situation as I am also looking to start my own portfolio, however, I am more focused on emerging markets. With that said my search criteria is not as strict as yours and I am only looking in the Micro to Small cap range. My holding period will likely be 5 to 10 years. Although I am not willing to disclose all my search criteria I will say that in general I am looking for unattractive options with decent performance , growth and a solid debt position. Their dividend yield should be positive and not be higher than 2-3%. Since I am still in university and going to grad school I feel that my planned investment horizon would allow for me to focus more on my long term financial goals and less on market fluctuations.
I think one really important thing to keep in mind when investing is trying to determine what everyone else is thinking and seeing if you have views that differ from the consensus.
Pretty sure he didn't say there's anything wrong with growth bro.
How many positions are you aiming for in your portfolio?
My advice would be to build up your cash reserves. While you do not need 6 months of living expenses as a emergency fund, you do need some put back.
Regarding your search for value in the oil and gas business, you're about 4-5 months too late in my opinion. Many companies are already trading at what I personally believe to be a middle to high premium considering OPEC risks, domestic storage, and technology advances while those that aren't are over-leveraged names that haven't and aren't hedging their production at all. In other words, pick your poison. Look somewhere else that won't require you to necessarily hedge out the volatility. For disclaimer, I am at an energy focused value fund.
Getting Into Stock Investing (Originally Posted: 08/19/2014)
I am 20 years old, I have 1,000 dollars and I want to start investing in stocks. Any advice?
blow it on your 21st birthday
1,000 isn't enough. Spend that money on books like the Intelligent Investor, One up On Wall Street, get yourself a WSJ or Economist Subscription and read read read.
You need 5-10k to start investing in the markets. And even then, you wont be able to buy individual stocks (and be diversified) without getting kills on commissions. You'd be looking at mutual funds.
I agree with the above posters that 1k isn't enough to start legitimately investing in stocks with. There are, however, a number of places that will be beginning to offer commission-free trading, such as Robinhood.
Assuming you have $1,000 that you don't need, sign up for a trading account with an online brokerage with low commissions. You'll lose a lot to commissions, but it's a good experience.
Read, read, read... everything and anything.
How to decide whether to invest in a stock in 5 minutes or less? (Originally Posted: 11/12/2013)
There was a discussion earlier on how one would go about deciding to invest in a particular company if only given 1 hour last week. I wanted to narrow the time-frame even more and see what type of information you all would look at if only given 5 minutes? What would you spend most of your time looking at or what would you start with?
I would look at one thing if I had to make a decision in five minutes to decide, what is the current market trend. Is it a bull or bear day. That's about the only thing you can really look at in that short of a period. This of course is if you have no prior knowledge of the stock.
It's simple: be an idiot. If you're an idiot you should easily be able to decide which stock you should invest in given 5 minutes. You could flip a coin, so simple.
The above answer is assuming you know nothing about the market, company, trends etc.
Short answer: Don't invest.
Long answer: What industry are we dealing with? What's the ROIC? What's the EBIT margin trend over the past 5 years? What's sales growth looked like over that same time? What's FCF conversion rate? How about FCF yield? How long has management been in place? Who are the top holders?
If the answers to any of that aren't in the ballpark of what you'd want them to be, the answer is no. Always better off missing ten home runs than owning one catastrophe.
Google buy/sell ratings breh.
Cash Flow Statement
..
Pivoting to markets / investing - need advice (Originally Posted: 10/23/2014)
I'm currently a sophomore at at target. My background is in technology banking / venture capital. I'm looking to transition to an investing focus, and ideally I'd like to be following 5-6 public companies in the tech space and know everything about them (management team, strategy, ect.) in the next few months.
So, question... what are some essential books that I should read, and what are some daily newsletters & general resources I should look into? How are you guys sourcing new companies to look at? Seeking Alpha? I'm really clueless and could use all the help possible.
Basically, what online resources are you using to source and keep up-to-date with specific companies?
Also, what sort of skill set should I have if I'm interested in activist investing?
Thanks guys in advance.
The Intelligent Investor and Security Analysis
You're a sophomore who did tech ibd and vc during freshman year?
stuff people read
shameless plug for my book list thread
for activist, I'd just follow the big activists and see how they work, I don't know of any texts out there
How to start investing in stocks? (Originally Posted: 11/29/2014)
Hey guys,
I'm a senior in college who wants to start investing in the market. I have a decent amount of money saved up and am thinking of opening an online brokerage account.
How would you guys recommend I proceed with this? What kind of strategy should a beginner use? I'm not going to be trading options or shorting stocks because I don't have enough experience for that. I understand how the market works and know the basics of company valuation. But it's one thing to understand this on a theoretical level and another to actually invest your own money in the market. My main goal with this isn't really to make a lot of money, it's more to see how the market moves on a first-hand basis and to improve my investing ability.
Any suggestions?
It's important to understand what your end goals are and how much money and time are available to you. Most kids who want to "learn" end up investing in what they hear on Cramer, Motley Fool, etc and then hope for the best. This is a decent strategy if you just want to watch stocks go up and down, but you won't really learn anything about investing.
If you really want to learn about individual companies, I would suggest you initially pick an industry you are interested in (Healthcare, Tech, etc) and focus on investing only in companies that you think are the best in that particular industry. If you go with this approach, you'll get to learn a lot about macro trends affect that specific industry, current trends in the industry, how the companies in the industry actually make money, who the major competitors are, other specific industry dynamics, etc. Admittedly, this is a relatively narrow approach in that you will really only be exposed to one industry initially. However, I would argue that once you learn one industry relatively well, you will be able to apply the general principles to learn about companies in other industries easily and quickly. While each industry has it's own unique specific intricacies, the general value drivers across all industries are not so different.
If you really want to learn about portfolio management and diversification, then that's a whole different discussion. I would argue it's more beneficial to learn about how to assess individual companies first though.
This is just my approach as someone who is also a senior investing their own money. I started investing with the Cramer/Motley Fool approach and I really didn't learn anything until I switched to focusing on one industry. I've personally found that after focusing initially on one industry, it's a lot easier for me to read material on other industries and understand what's going on. I personally want to generate decent returns with my portfolio so the majority of my investments are actually in ETFs, and I only actually play around with a small percentage of the total portfolio for learning purposes.
It is important to know how to start investing in stocks and how to learn it. So you would learn how to do stocks successfully?
Take a look at Robinhood for your trading account. It is commission free and is very easy to use for beginners. I agree that the best way to learn how the market works is to put some money in. However, treat the money you are about to put in as gold. Conduct research and analysis to determine your best outlets and then you will get something out of this experience. If you just blindly throw money in to say you "invest" then that is a huge mistake and an easy way to lose money.
You can approach your "strategy" in many different ways. There is no right answer to this.
Good luck.
Stocks Investing (Originally Posted: 11/10/2013)
In a nutshell, can anyone do this I think I'm seeing the complicated side of it all reading too many books with different points of view.From any one with experience how difficult is it to be successful in it and how does it work?
Buy low, sell high.
Damn, sounds like you don't know the first thing about investing. Just buy SPY and call it a day, until you figure the more advanced stuff out. Investopedia.com is your friend.
Thanks for the advice,dick.
To be fair, your question is not very concise and way too broad. Try to construct a better question such as: What would be a good career path to choose if I want to become a successful equity investor in x amount of time? Or what would be the best way to develop my understanding of equity investing given x? etc.
.
All about the cash flow and yield.
Sectors to start with? (Originally Posted: 01/18/2015)
Hi guys:
I'm a beginner in learning to look at and invest in stocks on my own, and I was wondering what sectors would be good for beginners to analyse? I read somewhere on WSO that small-cap biotech stocks are hard to analyse for beginners, and was just wondering if there are any sectors that I can start with to train my skills on my own.
Thanks!
Businesses that make intuitive sense and are easy to understand - eg consumer retail stocks. Walmart, Target, Macy's etc - all businesses that you probably already understand well.
The first stock you should analyze should be your love stock. So pick your favorite hobby/product, find out which company does it, and download their fillings. That's how I started and it really helps!
That's actually an excellent tip. Most people get started this way actually and you should probably do so, as well.
It's a great way to start learning more in depth information. I will start right away.
thanks guys! any other suggestions everyone? thanks
Presumably, you are working and saving money to invest with every paycheck. Index funds and ETFs represent your best opportunity to diversify and cut risk while staying investing in markets high or low. I suggest that you will sell off as stocks rise and reinvest in them when prices fall, using new cash, dividends and interest inflows.
Airlines --- learn about history, how and why it has changed, where the industry is today... great story
Looking to invest ~10k (Originally Posted: 07/08/2011)
I know a similar thread was posted before and got a little messy from trolls.
A lot of us undergrads have some cash to play around with (including me) and wanted to open up a discussion for 4-5 stocks (high risk/high reward stocks) for the next year or so that can produce returns.
Here's my current equity positions (not really high risk high reward). Looking to re-balance. Tech: Cisco Healthcare: Teva Telecom: Verizon Railroad: Genesee & Wyoming CleanTech: Telsa Mortors (mainly bought for long term)
invest-vest eh
put it in LBSR or JBII but for me is JBII their stock can go up to the heaven since PLastic to OIL just became Reality
JBII is highly speculative...
My picks for high risk/high reward in the energy space are:
ATPG, BPZ, GMXR, HNR, LLEN, PSTR
I own all of these, but keep in mind I have something like 50 positions in my fund (some "positions" have multiple legs, so if you count each leg of a spread as a position, then it's slightly over 100)
Pick one of the above that you like and dump Tesla...
(btw, I own Teva and Cisco, I would keep those)
I don't think high risk high reward is warranted right now (in general - like if you're going to be industry agnostic), but to each his own.
Google. Strong corporation and is sitting on a lot of liquid assets. Also with Google+ you never know how big it could get
I need to Start investing, I can start with $1000. (Originally Posted: 09/12/2013)
Hello all, I want to start investing, I can start with $1000. Please anyone with good investment experience can help?
.
You need an account. Get a Schwab or Etrade
Buy "DUST" it's 3x inverse gold miners -- hold on to it for 1 week.
If you haven't already, do some math with trade fees. The good platforms are $10 per trade, so you're already $20 in the hole when you buy a stock. With only $1000, that's substantial. Poster above said not to diversify, which I agree with, but also everyone knows is stupid not to diversify. Bottom line, $1000 is too little to start investing with if you ask me...
Go FX.
Hey guys, I am thinking of spread betting. I am a newbie so only planning to use £100 real money to invest and gain experience. Anyone got good trading platform for spread betting? I was thinking IG Spread betting or City Index? Any suggestions?
Look at gold's price, right now - 830am EST. DUST is going to go up so much today.
Anyways, it's 1k -- either invest in something risky or put it all on red. Since you're even on this forum, odds are that 1k will be a night out for you in a couple years.
up 13%
Assuming you are in college, open a Roth IRA and invest the entirety of your money in an index fund / ETF. Look for a fund with relatively low fees (now because once you hit a certain level of annual income, you no longer can make contributions to your account ($125,000 for singles).
Starting to invest advice (Originally Posted: 04/03/2015)
I am a college student and would like to open a real account. Does anyone have any advice for starting up? I was thinking about opening an account with interactive brokers. Any advice is appreciated.
Some good articles on Investopedia to expand your knowledge.
You must have a min. of 100 trades to open an account with Interactive brokers.
Account minimums apply as well.
If you have money, then, you can :).
You can have what ever you want, if you know how to play, under the table :)
Investing Startup Tools (Originally Posted: 12/29/2014)
Hello WSO Community. I'm a college freshman with interest in studying finance. I have never invested money before, but I plan to start. Do any of you know of any good investing tools or reads to help get me started? Personal tips would be much appreciated as well.
Thank you very much, CFOinTraining
If you are looking for books to get you started, try "One Up on Wall Street" by Peter Lynch and "Margin of Safety" by Seth Klarman. However, I think the best way to get started is to buy a couple of shares in 5 companies that you know and use, and follow them closely. Figure out what his behind their price movements, sift through analyst reports, earnings transcripts, etc. Best case, the stocks will go down, and you will have learned why. You learn more from your failures than your successes.
If you want to give macro trading a try then get a copy of Market Wizards by Jack Schwager (the first one) and read the chapters on Bruce Kovner, Paul Tudor Jones and Michael Marcus - they are short, easy reads.
I also think you should read Intelligent Investor by Ben Graham, even if you don't wish to go down the value investing route. The books suggested above are also great, but the Klarman book is hard to obtain.
If I were you I would practice at up down.com and read some books first. The intelligent investor is very good and Ive had success in following the ideas laid out in that book.
I want to start learning on how to trade stocks. Where do I start? (Originally Posted: 04/20/2013)
I'm heading to undergraduate school next year as a freshman, and I want to start learning on how to trade stocks soon. Can any experienced traders please tell me how they got started and give any advice on what to start doing to learn the market? What books I should read? How I can guess (to the greatest possible extent) the rise or decline in price of a stock? Just letting you guys know I'm a total noob, I pretty much know nothing about the market.
//www.wallstreetoasis.com/forums/how-to-start-trading-compliments-of-bond…
Read some books- Margin of Safety by Klarman, One up on wall street by Lynch, The Most Important Thing by Howard Marks would be good starters.
first learn about the mind set of a trader. i know there are a few books on that, i was a little crazy and jumped in the market at a super young age with my own money so my mind set on a trade was built from experience. then there are three paths you can take. they are technicals, fundamentals, or a mix. for a pretty straight forward technical side for a noob use the for dummies guild. I know it sounds stupid, but any book i could recommend would be a lil complex, however once you understand the basis side of technical stuff you could try and read telebs. for fundamentals there are a lot of ways you can go on this. some say follow buffet, or lynch, however i have always been fond up viewing top HF managers and trying to understand the reason on a position. that was my way to success without reading. some investors go with a trend follow approach which in a fundamental sense means a company like CMG will continue to outperform because growth is just so great and it will outperform expectations. some investors may go after a deep value approach meaning they will buy a company that is just doing absolutely terrible like CLF, and since investors are so negative the stock would be so low that the company because almost worth buying because people expect it to do worse then what is going on in the company. a mix of the two might be trading a CMG or CLF but when the trend breaks down or starts you would jump in our out of the stock. I say learn how some of the top HF's trade. I never read much, i think i only read Micheal lewis' books. that was about it. oh and defiantly practice on a trading account. One with multiple options like stocks, options, futures, and forex. also if you have the cash make a real account, but practice before you put your own money on the line. i know TD ameritrade costs nothing to make an account, and there you should have access to their paper portfolio. it will let you test out all the options i mentioned above.
thanks so much for the replies, I really appreciate it and I will definitely start reading once I have the time. 4thefuture sorry but your response is a bit confusing, I don't know much trading jargon so bear with me- what is "telebs" and what does "HF" stand for? Sorry if it sounds dumb, I'll probably feel like an idiot once you tell me what it stands for lol
If you have a brokerage account with TD Ameritrade you can learn using their Paper Money application. Marketwatch also has some virtual stock games you can play.
If you're talking about some kind of live data virtual simulator, I remember TradeFields is a solid application. They're available everywhere from iPhone (app), to W8/Android, to on the web (www,tradefields.com). I recommend using the approach given by '4thefuture' and test it out on the sim.
Telebs? Who the hell is that? Shirley, not Nassim Nicholas Taleb? And what does it mean to "defiantly practice"? "Dummies guild"?
thanks for that site, I've been trading virtual stocks for a while but I've been making mediocre profits (like 5% in a month) and it was always by just trading random stocks that I had no idea why I invested in them. I'll check that site out
Lots of "Hedge Fund - Portfolio Managers" popping up on WSO lately. Glad to see all the money managers finally realizing this amazing resource for them!................
I prefer navy blue to goldman blue, hence the self assigned title.
As for OP, while bondarb's advice is truly phenomenal as it cuts to the very core of trading which is taking a measured and disciplined approach to limiting risk opposed to trying to pull a Paulson, I think his advice does require some prerequisite knowledge about markets and more importantly your own trading style/ strategy before taking the dive. I personally wouldn't start trading until you've found a style that fits your skills, personality and outlook. The best place to start is the Market Wizards series.
How to start investing? (Originally Posted: 10/25/2012)
Hi Monkeys,
I am currently a Junior, majoring in Finance. I have always been interested in investing and follow the markets quite a bit. I was wondering, how does one go about starting to invest for himself?
I have about $4,000 that I would be able to invest, but do not really know how to start. Do people usually pick out a few stocks, and analyze those in great depths, or select an industry in general, or different instruments...
I am willing to put the time in and I don't mind making mistakes, as long as I learn. If anyone has any tips/ideas as far as "making a plan" and starting to invest for myself, I would greatly appreciate your insights.
Also, who do you invest with online? What should I be looking for, besides low transaction costs, in the company that I will use to manage my portfolio?
Thanks a lot in advance!
Any investor will tell you to start out investing in what you know. What do you wear? What's in your garage? etc.
You can open an account on ETrade or Vanguard or whatever else broker you want (there are too many to list). Usually trades are $10 each, so you need to make >$20 to break even on your investment. (10 to buy, 10 to sell)
My other suggestion is that since you don't really have a lot of capital to invest, try out an etf or mutual fund. Vanguard has the best options for those types of investments. There are so many; biotech, emerging markets, technology, etc. Good luck
I would look to TD ameritrade or Interactive brokers/ tradestation. The latter two if more active......
In terms of investing, I assume you going fundamental rather than technical....
First plan is deciding what makes you wrong on a choice. Always know what makes you wrong before right so you got exit plan on trade....
Next time is you need catalyst for a value play otherwise it becomes more of a value at a lower price
With 4k you can't do much. Invest what you know and start with simple put/call options. Stocks will waste your time and transaction fees will eat your lunch.
First, you want to ask yourself what are you investing for? Is this money being used for retirement? Is it for extra income? For fun? Once you figured out what you're investing for, you'll understand the amount of risk to return to undergo.
Second, what are you interested in investing in? Do you like large caps, or small caps? Growth stocks or value stocks? Do research on your own and figure out what you want to invest in. Great places to start would be Yahoo! Finance. Seeking Alpha is great too as you get to read what authors are recommending and see if they align with your own assumptions.
I would suggest you open up a virtual account and trade with fake money. Sites like investopedia have a virtual simulator and most online brokerages have one as well. Trading with virtual money will give you a sense of how investing works and not risk any of your capital. With only $4000 to invest, your options will be limited but you can still pick up som quality investments.
Lastly, to answer your questions on which brokerages to use, it's really up to you. Based on your username, I would assume you live in Canada which makes your options a bit more limited (Some of the best ones like TD Ameritrade don't operate internationally). I would suggest OptionsXpress. This is the one i'm using right now and they have excellent user interface, research tools and trading options (stocks, etfs, mutual funds, options, futures, etc...) I believe they have a promotion going on right now if you sign up you'll get 13 weeks of investor business daily for free.
Thanks a lot for the input.
pplstuff, I have always been interested in put/call options, but it seems everyone that I talk to gives me the "it's for advanced investors, very risky, blah blah blah". Would you agree with that? Or do you still think I should just go for it and try and figure out how things work?
Well, just know they wouldn't be long-term investments. You'd basically be doing it for fun/learning exp. Although derivatives, in general, may be considered 'advanced'... just understand what you're investing in before you do it. Start by reading up on the payoffs for buying/selling call/put options. Once you understand how a contracts payout... start thinking about combining multiple option contracts to structure your trades with the payout you want (google "iron condor" or "butterfly" options for simpler examples on this).
With $4k, you can either put it in a mutual fund/etf/index and let it sit there... or if you want to be more active, look at options. Just know, there's risk with any investment. It's a matter of how much risk you're willing to take and what your financial goals are.
If you're looking to learn, I'd say go for it... but do a bit of reading first! Don't make a bet if you don't know what it is.
Thanks for this. This is good information for me as well and I'd like to look to invest as well. Going to use investopedia for virtual trading
As someone who lost nearly $10,000 when he opened his first trading account at the age of 19, I can tell you one thing: focus on capital preservation above all else. You're going to start having fantasies of doubling your investment. Everyone does. Resist it. Lower your expectations to something that is good on a risk-adjusted basis.
1) Don't invest with $$ you don't have. So payoff any debts you owe first. Put aside in safe savings any $$ you will soon need for purchases (like a car you start buying with cash, not debt).
2) It takes $$ to make $$ by investing because you earn a % on invested capital. Because you are starting with relatively little, don't get enticed by leveraged products that appear to overcome that limitation, like options, rights, futures, double ETFs, leveraged closed end funds, etc. You increase your capital with savings, not profits at this stage in life.
3) There are many strategies to choose from. Do NOT approach investing with the built-in excuse of "It is OK to lose money because I am learning". Losses are BAD for everyone. Pick the strategy with which you are most likely to be successful to start.
4) The best strategy for most starters is the most boring passive indexing with large index ETFs or index mutual funds. Don't think that you are not 'learning something' just because you are not stock-picking. * Your investment will focus your attention on the economy and markets. You will see how your $$ reacts - which is quite different from an academic knowledge.
* You need to experience market volatility to see exactly what your risk tolerance is.
* You need to feel the pressure to trade and find your own 'emotional triggers' and develop ways to control them. * You will learn the basics of trade execution and the portfolio tracking necessary for taxes and documenting the success of decisions.. * You will learn the execution and emotions involved in re-balancing between asset classes.
5) Brokerages have different plusses/minuses. Because your trades will be for small amounts you want one with transaction costs based on the number of shares traded, not a flat rate. Interactive Brokers was recommended above. Yes, its fees are 'per share' but its problems far outweigh its benefits for starters. It's order entries are very confusing; its cash transfers into/out of the account is cumbersome, its tax reporting is most often wrong, it does not provide market data free of charge, it imposes a $10 minimum fee per month, etc. I have an account there but I do NOT recommend it to starters.
6) I would also disagree with the advice above 'to buy what you know'. Your finance courses should have taught you diversification. And buying what you know will most probably land you with consumer stocks. Also that approach fails to distinguish between a good company and a good stock.
7) Before picking individual stocks make sure you understand financial accounting. Financials are the language of business. Hopefully you took those courses too. If not then start learning that part now.
8) The site Retail Investor has pages on all these topics and links to other education sources.
Paper trade.
Probably and summarizing cautious investment pay-off, specially if starting.
That means: - Do not leverage (portfolio, but also your own B/s -> pay off your debts) - Capital preservation is paramount - To better know your behaviour towards market movements start investing in ETFs/indexing. That way you are diversifing and testing the waters at limited costs. Vanguard has interesting cost/quality ratio to start - Staged investment can be a good idea, that is, instead of investing the whole 4k within a week, invest a fix amount each month - Be aware of your limits: check losses and take profits when satisfied - Understand what you are investing into (underlying, product, conditions)
A good read is B. Graham's seminal book. Good luck
Dude, please don't tell me you actually wear Canada Goose
Thanks to everyone for all the info! I wish we were taught more applicable skills for "real world" finance in school...
I will conduct my own research, but for someone in my position, would you guys have any suggestions as of the best brokerage firm? My focus is mainly low transaction costs, straight forward platform, and possibly market research available. I could do without the market research as I have other tools that I could use for that.
Thanks again, much appreciated
@Pancakes, no I do not wear CanadaGoose. Should maybe change that username haha
Thinkorswim
Thinkorswim
Any Trading strategies for beginners (Originally Posted: 10/22/2015)
I found few basic strategies for beginners 1)The stock has to be stable and understandable 2)A stock must have a long term prospects 3) A stock must be managed by vigilant leaders 4)A stock must be undervalued
Please let me know if any strategies
When people use the term "day trading", they mean the act of buying and selling a stock within the same day. Day traders seek to make profits by leveraging large amounts of capital to take advantage of small price movements in highly liquid stocks or indexes. Here we look at some common day trading strategies that can be used by retail traders.
Try working for a legit firm first where you can get training and not have to risk your own money/pay for infrastructure. If you're successful, feel free to leave and start your own gig.
15 Grand to Invest (Originally Posted: 05/14/2013)
So I have about 15 grand that I realize I should probably put to work especially as the market continues to run. Any ideas/suggestions of names to invest in? Risk tolerance is pretty high and willing to stomach some volatility. Have some ETF names I'm interested in but nothing more than that.
Invest in your education. As in, learn how to research companies, research them, and then invest in them.
Volatility indexes, S&P, Emerging market ETF's, commodity basket ETF's...just to name a few general categories. I'm not going to name individual stocks because I believe one only learns when one researches.
DXJ
Do you have time to look at specific companies and truly dissect and understand them? If not, open an account on Vanguard and put ~10 grand in an S&P 500 mutual fund and the rest you can do whatever you want with (stocks, etfs, gold, etc) or just keep it liquid for future downturns that present the valuable opportunity where you can buy more at a discount (god I wish 2008 came around again!) Good luck
Go for commodity ETFs in the emerging markets. I've done some research on those last summer and they are pretty solid, though volatile.
Creating a Basic Personal Investing Strategy (Originally Posted: 08/24/2015)
Hey guys,
Just came off a summer internship in ER and have a few thousand I plan on saving. Personally, after my experience in ER, I think beating the market is a doable but exhausting process, something left to people who can do it full-time. My strategy is to put 25% of my savings into a low-cost Russell 2000 index every 2 months until I'm 75% invested and keep a remaining 25% for any serious market corrections. I'm looking pretty long-term (10-15 years) for these savings. I'm just looking for long-term wealth generation and to implement a personal system of financial discipline.
What do you guys think of this approach?
You mean long term investing? This is how you do it.
fine strategy. something else to consider would be an equal weighted ETF, instead of cap weighted.
ideally, you'd keep contributing to it over time.
just curious, what would you do with the 25% cash if such an opportunity presented itself? how will you know that opportunity when it comes?
my opinion is your emotions are the devil, just stay 100% invested (if you're consistently contributing), and the math behind dollar cost averaging will allow you to pick up more shares during tumultuous times.
kudos on starting early
Help on starting trading (Originally Posted: 04/04/2010)
I read about BondArb's how I can learn about trading post recently and I wanted to follow his advices. But, is there any reason you recommend trading index futures? if i'm more interested in FX trading in the future, do you think I can learn as much through trading FX trading in the way you outlined??
In terms of brokerage/platform, I'm currently using Sogotrade, but wanted to switch to either Velocity Futures or LightSpeed Trader platform following Trade4Size advices. Can you tell me which one might be better choice for me Trade4Size? I personally used LightSpeed Trader platform before in my daytrading internship, so if LightSpeed Platform is not much worse han Velocity Futures, I would like to go with LightSpeed. Only thing is I can only commit $5000, but in their website it says, "Lightspeed Trader - $10,000 minimum balance"
Finally, after summer rotational program, can i get a cheaper price for same brokerage/platform that the firm(BB) uses in which i'll be interning at?Or, it just doesn't matter?? Maybe I should just continue trading on my Sogotrade account and spend my time reading more trading books for now until summer program starts and get more sophisticated trading platform after summer internship. Do you think it's a good idea? Thanks.
i suggested futures because they have inherent leverage so you have to really pay attention to managing risk and figuring out how to size trades. FX is fine.
If you are doing Active daytrading stocks and need reliable FAST execution lightspeed has no equal. If you are trading index futures then I go with Velocity Futures with Xtrader platform. I have no experience at all with FX so I cant advise you on that.
I am very confused by what you are asking in the last paragraph.
thank you for your insight trade4size. I'm sorry if the last paragraph was confusing. I was just saying that my summer S&T internship from BB starts this June. And if I get lucky, and happen to get the full time offer there, I thought BB that hired me will pay for my trading platform once I become a trader. Then, there might be no point for me to open up the platform right now and pay for it myself.
Or, is it going to take too much time until I get my own trading desk and platform, so I should just open personal trading platform right now? Thank you in advance.
call me really crazy but i was sort of under the impression that as a trader at a BB you are the broker.
^^^Crazy
Stock Trading Beginner (Originally Posted: 04/29/2011)
I have some spare cash that I want to invest in stocks. I hear a lot of people talking about it and I guess I want to jump in on it.
Where do I begin? Should I start by learning all the terminologies that are associated with stocks, then proceed to the actual trading?
Also, what number of shares should I buy to start off with?
Any other beginner tips are greatly appreciated too.
Start here: www.investopedia.com
I cannot give you a number of shares but with commission being $7-10ish a trade, make sure you invest enough that after a reasonable return you are covering the transaction costs and have a profit that makes it worth you while. There is a simulation on investopedia as well, not a bad place to start.
Credible sites to get started? (Originally Posted: 07/06/2015)
Hey all -
Just getting into managing my own personal portfolio. What are some good places to start? Obv internet is flooded with ideas/content that are a bit annoying to sift through as starting points...
Robin Hood is nice place to start trading as a retail investor if you're trying to manage a relatively small portfolio. Its an app without any trading fees.
Seeking Alpha is pretty good place to get some ideas/gain multiple perspectives on stocks you're interested in. Has both a website and a nice app so you can look into stuff quickly and when you're on the go. And to go off of the above post, I use Robin Hood as well.
Interesting. Haven't used Robin Hood but reading through seeking alpha, seems a bit all over the place.
I understand that one will have to do analysis themselves, etc., but I'm wish there was a service that filtered good ideas and you could roll from there. It'd also be nice if you could actually see performance by any of these stock pickers/analyzers (from SA to Twitter)...
And to be clear, I'm not looking for a Robo-Trader because I'd actually like to start learning a bit about this
Eaque aspernatur necessitatibus rerum nulla est. Sed aspernatur illum quisquam officia doloribus cumque. Et nulla eum modi sed error quasi repudiandae. Totam adipisci qui ipsum nisi. Quia non repellat assumenda nam voluptas. Quia aspernatur aut laudantium et ut mollitia.
Laboriosam aut vero laborum perferendis unde autem. Aut vitae et minus eius vel. Omnis similique molestiae consequuntur fugiat sint quae.
Sit rerum quis dolores et et harum dolores. Nemo dolorem ea est impedit in ducimus omnis. Veniam molestiae consequuntur et et et aut ea. Eum rerum dolor sunt nihil voluptates molestiae blanditiis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Nisi minus est sint. Ea est neque optio qui. Minima iste molestiae sapiente et natus maiores. Ipsa sunt mollitia et quisquam saepe ut.
Et aut enim dolorem labore suscipit qui. Qui iure aliquam nostrum. Esse aut aut ut. Quas est ullam facilis aliquid laboriosam qui. Qui voluptate accusamus consectetur natus doloribus. Et adipisci quis qui voluptatum.
Non quasi animi eum repellat cumque fuga veniam nulla. Et et voluptatem doloremque deserunt libero maxime. Repellat commodi eum iure excepturi error vel culpa.
Quos officia voluptate ipsum. Aliquid delectus aperiam soluta neque sed iusto vitae voluptatem.
Praesentium illo non libero voluptatem id non veritatis. Veniam tempore incidunt sit magnam ab expedita maxime. Ut ratione qui iure voluptatem aperiam quia. Culpa ipsum perspiciatis atque et. Voluptatibus amet ut accusamus nisi sunt et aliquam.
Quia ipsa ratione animi. Accusamus earum sed exercitationem alias. Quibusdam sit incidunt culpa neque animi rem. Autem ducimus id molestias dolores voluptas impedit quia debitis. Et dolor odio aspernatur odio reprehenderit asperiores. Earum sed voluptatem libero voluptatem quia sit. Illum est voluptatem pariatur.
Aut quae odit deleniti veniam reprehenderit. Distinctio pariatur culpa delectus. Quae vel rerum omnis repudiandae eveniet. Dolorem impedit et qui. Eum aut tempore ea dicta.
A eaque nisi beatae voluptatem. Similique enim commodi aspernatur neque fuga. Placeat illo sed enim eum. Eaque dicta debitis sed sed adipisci fuga inventore.
Aut tempora tempora est temporibus non reprehenderit perferendis. Ducimus et consectetur aperiam quasi quod aliquid cupiditate. Exercitationem in voluptatem quia fugit quas autem magni. Aut laboriosam repellendus fugiat enim earum laudantium est.
Voluptas mollitia ratione iste ratione odio. Corporis porro ullam tempora soluta quibusdam rerum. Dolores itaque a omnis et aut aspernatur harum. Recusandae a dolores modi. Ut rem corporis tempore eius.
Sequi velit voluptas placeat quia quos. Exercitationem temporibus sit laborum minima ipsum ut.
Perspiciatis sit nisi aut facilis culpa. Et harum nisi nisi temporibus cupiditate. Enim maiores quis ut hic vitae. Perferendis ducimus neque eum autem sunt et quas. Quod eos provident voluptas rem molestiae quia eos. Atque debitis voluptatum est ad quo quisquam. In molestiae dolor asperiores quia at expedita.
Aut consectetur error tempora optio. Dicta et eius adipisci. Non velit quia occaecati qui voluptas qui. Pariatur consequatur quisquam libero minus ipsam incidunt tenetur. Enim distinctio at dolor animi. Asperiores eaque quae quas omnis voluptatem vel est. Et quibusdam fuga architecto aperiam quia culpa dolores omnis.
Repudiandae sed pariatur doloribus qui non error. Expedita facere exercitationem animi enim neque veritatis. Expedita dolores sed minus saepe illo. Quo molestiae deleniti reprehenderit dolores odit. Possimus nostrum pariatur corrupti dolores suscipit nobis dolorum. In aut deleniti et iste dolorem consequatur illo.
Perferendis distinctio et ab sit enim ut. Molestiae laborum et corrupti perspiciatis. Ipsam velit quia sunt animi at nemo. Vero voluptatem dolorum eaque enim corrupti. Distinctio quidem dolor molestiae et distinctio dolorum.
Quaerat nam aliquid doloribus. Ducimus fugiat consequatur facere et rerum consequuntur et autem. Sint qui sit est porro id rerum.
Omnis autem odio aut quia. Quia et ipsam natus optio labore quas perspiciatis. Quasi eligendi possimus delectus corrupti. Pariatur numquam quis doloremque adipisci optio. Velit sit fugit magni non et necessitatibus mollitia. Qui vitae quo placeat earum.