Stocks?

[Ortega]

Originally Posted by prescient63

Working at hedge funds, mutual funds, and investment banks where they had entire support teams of Ph.D's helping them.

Right... Thats why Warren Buffett bought his first stock when he was 11 years old.

Warren Buffett Timeline

[Soriak]

Originally Posted by Ortega

Right... Thats why Warren Buffett bought his first stock when he was 11 years old.

Warren Buffett Timeline

Warren Buffett really is a good example for the average investor. The way you make it sound here it's like he's a high school dropout who just happens to be good at trading - not true of course, he got a Master's degree in Economics.

Not to mention he made his fortune by buying companies, not simply buying a couple stocks.

[prescient63]

Originally Posted by Soriak

Warren Buffett really is a good example for the average investor. The way you make it sound here it's like he's a high school dropout who just happens to be good at trading - not true of course, he got a Master's degree in Economics.

Not to mention he made his fortune by buying companies, not simply buying a couple stocks.

Lets not forget he trained under two of the greatest minds in finance (Graham and Dodd) and was the best student they ever had (only student to ever receive and A+ from Graham in security analysis) , or that he had a privileged upbringing. There is also the issue that the market today is absolutely nothing like it was back then. There is zero correlation between Warren Buffet and some yahoo trying to day trade with a few hundred thousand or even million dollars.

[rinthea]

or that his outperformance is almost identical to the tax advantages he's got away with

[ashatumar]

Originally Posted by xilsharn

Hardly relevant.

Anyway, I've been thinking about getting into the stock market myself. It just seems so damned complicated. I've just been putting my overflows into a high-yield savings account till January, when hopefully I'll get up to about ten grand. Also maxing out my 401(k) (well, technically it's the Thrift Savings Plan but retirement plan, tomato toe-mah-toe).

How do places like E trade, scott trade etc., work? Do you keep a balance in an account? How liquid are they?

You should max your 401k, then open and max an IRA before beginning diversification if you're young.

[prescient63]

Originally Posted by ashatumar

You should max your 401k, then open and max an IRA before beginning diversification if you're young.

Diversification and tax advantaged accounts have absolutely nothing to do with each other. If you have a 401k and it makes sense given your situation contribute to a Roth IRA if you are eligible so that you can manage your taxes to some extent in retirement. If i had to guess I would say taxes are going to go up in the future and paying your taxes now as opposed to paying them at retirement will be a bargain.

Oh yeah, diversify on day 1 the most important aspect of investing is proper diversification. ETFs = cheap diversification.

[Darkko]

I've also been thinking about getting into some investments long term and starting out real small. I've been looking at sharebuilder to get started. I read this article this morning on MSN. Start investing with just $100 - MSN money
Does this sound like a decent plan for a slow and small investment plan?

[Soriak]

From that guide:

Also, about 4% of your investment will have gone to pay commissions.

This is why I'd recommend against it. If your portfolio goes up 6%- (and that's a big if) you'd actually only have gained 2%, which is less than the interest on a savings account. If you absolutely must do it, save up the amount you want to invest for each item and do one transaction to each per year. So instead of investing 2x $100 in the same item, do 1x $200. I'd also drop real estate from that list and maybe even reduce it to 3 items so you're down to 3 transactions. (you could drop the Aggregate Bond)

3x $4 ends up at 1%.

[Kindnugs]

A couple stupid questions regarding ira and mutual funds

1. I can transfer my ira from one company to another? ( AIG to say Etrade )

2. If I sell part of my holding in a mutual fund thats in an IRA but then re-invest that money into another fund for that IRA will I incur taxes on this?

[prescient63]

1. Yes
2. No

[Disp]

Dollar cost averaging is very important when investing. It's what a lot of people do for their 401K's and IRAs. Basically it means investing the same amount of money every month regardless of the current price of the mutual fund or stock. Many people are tempted to change their monthly investment when they see the stock price going up or down. The problem is you never know what the peak is or what the base is so the smartest move is to just invest the same over and over since the stock market is cyclical. This is the proven most effective way to invest for the non-pro.

[Tolanin]

gotta say its usually a better idea to go with diversified stuff like mutual funds. Unless you are some kind of economic genius you arent gonna be able to juke around the professionals with all their resources.

[Grumath]

The secret to day trading is studying charts and analyzing patterns. Using this in conjunction with good market or sector news (or bad if you are selling short) is really the key. I have gotten into trading a lot recently, but I also don't have a lot of money. My dad did a 5000$ Online Trading Academy course and has been hooking me up with info and a DVD set that is pretty awesome. The good tips are strikingly similar to poker. Know when to fold em is the best and hardest lesson to learn. And as a beginning trader your goal should NOT be to make money, it should be to NOT lose money. If you can cut out big loser trades, you end up with small losers and small winners, which cancel out, and then big winners. Other things that are difficult for most people to grasp is buying when stocks are going down and selling when they are going up. This seems backwards, but is what professional traders do. You just have to time it right based on support levels, charting data, etc etc.

I am no expert, but if someone wants to PM me about stuff, feel free.

EDIT - A few sites for those who want to get serious...

StockCharts.com - Simply the Web's Best Stock Charts - A very powerful charting service. All pros use charts that can do all kinds of data like Moving Averages, Bolinger Bands, Fibonachi, etc etc. This is a good one.

StockTradersHQ.com - Stock Picks, Candlesticks, Technical Analysis, Momentum and Swing Trading - Awesome awesome webite. You have to pay for this one, but its worth it. They give daily market alerts before the markets open to let you know what to expect based on futures and news. They have great message boards with people who post on breakout stocks. You can just ride their coattails at first and win 80% of the time or so.

[Ortega]

If anyone new to the market is considering starting right now I would be very careful. The credit crisis has been taking its toll this last month and the markets are on the verge of a decent sized correction. If the nasdaq finishes below its 50 day moving average tomorrow and we don't get a end of the week rally on larger volume for all indices (as the others are already below their 50dma) then we are definitely heading for a bear market.

[prescient63]

It doesn't matter where the nasdaq closes. If you don't think we are heading for a bear market you've lost your mind.