I'm a new investor. I've never bought stocks before. Ever. Should I start with $500, buying/selling penny stocks?
Should I take 10k (upper limit of the free liquid capital I can spend right now), and buy oil when it hits $20 - and sit on that for some years?
How did some of you start - and would you do it any different if you were just starting to buy/sell again? ANY advice is welcome and appreciated.
Neither. Take 5-7k and open a margin account with a reputable broker. Take a third of that and put it monthly dividend stocks trading between 10 and 20. This will help you build capital and these are pretty much always a fund of some sort so you'll be getting market exposure anyway. Don't do anything else until you really learn the market. Learn to read a chart, learn to read financials, learn to screen. Start a watch list of things you know about, things you're interested in, things others are talking about. Don't buy shit. Watch what they do based on news, catalysts, earnings calls etc. Learn how the market fluctuates based on this criteria and also on human emotion. Learn the types of orders. Learn what kind of volatility is implicit in what kind of volume. Learn that volatility is everything. Learn that the trend is your friend. Just learn and never stop.
Once you feel comfortable THEN get your beak wet and only do it in small amounts to start with. Like never more than a third of your capital. You can go bigger when you're smarter. I'm telling you this because everyone gets burned early and you will too. Better to know what you're doing so that it doesn't hurt too bad.
this is great information. i'll be very cautious going into it. no penny stocks, and I've got a broker in mind that my parents have used for decades.
I like the idea of taking a third and putting it into dividend stocks, so I can learn to read the charts, and watch the trends. I need to do more research about volatility and where human emotion plays a role.
I know it's a foregone conclusion I'll get burned. I just wonder when - where, and how it will happen. hopefully nothing too significant.
>Should I start with $500, buying/selling penny stocks?
no, why would you immediately leap into penny stocks, are you going to try and sell me vemma sodas next?
We're at the end of a long bull market so putting money on the vanguard 500 (represents the entire market in general) isn't as great as it used to be but luckily oil prices have plunged along with various oil stocks meaning you can buy reliable companies at firesale prices, $1000 in statoil would be a reasonable long term investment right now. $1000 because fees are usually ~$10 and with a $500 trade you'd already be 2% down. If WTI stayed below $40 for years I would be very surprised.
the site i was using was crap and was charging premium per week if u were going long in commodities , where can i buy oil for long without this , 2016 will be a war year to jack up oil prices
>How did some of you start - and would you do it any different if you were just starting to buy/sell again?
1. Never invest in hype companies you see on Bloomberg, Marketwatch etc. their prediction of growth is already priced into the stockprice (learned that by losing money on TSLA)
2. Look for companies that have no debt and their market capitalisation is similar to their total equity. Thus their stock price is corresponding to their intrinsic value.
3. Out of those stocks look at their revenue, is it black or red. Are they loosing or gaining some profit over the years. Some companies may have been in the red (kickstarters) but a new, permit, product, service will be in high demand in the next year (according to DYOR).
4. DYOR, by far the most important thing is to do your own research on companies you are willing to invest in. A good analysis is the basis for a well founded decision. Every investment I did, I was absolutely certain that there was enough of the information I could get my eyes on pouring into my decision. This means, balance sheets, expert analysis of people in the industry you are willing to invest in. LinkedIn works great for me, since there I can find groups of people that are in this particular branch and are willing to discuss certain projections about the industry or companies I am interested in.
5. If your decision is well founded in your analysis thus you can trust the information you gathered, and you have enough capital (I started with $10k I could spare). Estimate the support and resistance of the stock, as said before, "you buy low and sell high", thus waiting when the stock is underpriced or overvalued to buy into, or sell out. DCF, Graham Nr. etc. indicators can help you in seeing the current value of the stock.
This is how I invest, and what works for me. Others have other approaches. Investopedia, Gurufocus Webinars are a good start.