I’m 22 and I’m interested in buying stock from a certain company. I’m unsure how to go about doing this. Can I go online and buy, similar to any online business? I’m also wondering about the specifics of "shares." If the stock I’m interested in is at about 90.00, does that mean I pay for one single share of it?
On a side note, I have a corporate job and also a part-time fun job, so the poor economy is not really affecting me fiscally. If I have disposible income, is now a good time to invest?? Or is this the worst time to invest?
$so fresh so clean$ 1:03 pm on March 3, 2010
The best thing to do would be to become educated on different investments, then speak with a financial advisor that can map out a plan for you.
http://investopedia.com/dictionary/default.asp
Fascism's Worst Nightmare 1:03 pm on March 3, 2010
It’s a good time to invest, since stocks are priced low. They may go lower still, but it’s impossible to time the market. Rather than try to get THE best price, just be happy eventually that you got a very good price.
You’ll need to open a brokerage account, like at E*Trade or TDAnmeritrade. They’ll want you to send them a sizeable amouint of cash for starters, or an equivalent amount of securities if you have them.
As for stocks, investing in food companies like Kraft would be safe for a possible lengthy Depression. Look also at Blue Chip stocks that are badly underpriced like General Electric. Or stocks that are low not because there’s anything wrong with the company, but just because the economy is bad, stocks that will go up when the economy improves. Like Alcoa or DuPont.
Texperson 1:03 pm on March 3, 2010
At this time your best bet is to stay away from the stock market. The ecomony is in a very difficult position and when and how it recovers is still in question. And it may take years until the problems are resolved.
Try to wait till things start to improve as saving money at this time is the best course of action. Your job may be secure today, but who knows about tomorrow. You want to have as much readily available cash available to you, not have it tied up in the market where the potential for loss is still great.
Rabbit 1:03 pm on March 3, 2010
At a superficial glance, the prices for stocks tend to be amazingly low. In that respect it would appear that there are a boatload of bargains out there. Here is where the risk comes in, as in you could lose value, because we do not know how much lower the market will go.
It is possible that the company you are interested in is bucking the trend. Some stocks are going up. The value of your company’s work and situation, however, may change. The broad economy is in flux, so I trust you aren’t going to ‘bet the farm’ on your chosen company.
Here is an idea for you. The concept is called dollar cost averaging. If you apportion your money over a period of time, especially when values are falling, then you get to average down the cost of your investment. Suppose, for illustration, that on the first monday of the month, you put 10% of your money into XYZ, then next month you do the same, which may include additional money added to your investment funds. If the price of XYZ has fallen, you buy more shares. If XYZ has risen you buy fewer at the higher price. Carrying this on you have the potential for buying more shares when they are relatively cheap and fewer shares when they are relatively expensive.
There are modified schemes for this. One is to set such a target investment amount over a period of time, but apply a reserve percentage. At the first purchase, you perhaps use 2/3s of your current period investment amount to buy the shares, and save the remaining 1/3. Next month (week, day, whatever) you see how much the stock has moved up or down since the starting month, then you add or subtract that percentage from the purchasing portion of that period’s investment share. This way you buy increasingly more if the price falls, and a decreasing amount as the price rises. The saved amounts (1/3) in the example get pooled into the percentages and helps you maximize the buying of cheap shares and minimize the buying of expensive shares. When you go to sell, if you do, then you have an even lower cost basis than straight dollar-cost averaging.
Jatin G 1:03 pm on March 3, 2010
Thats good you looking to invest in stocks.
Also i would recommend you to try out Forex Trading similar like Stocks but with a better fortune:-)
Check out this site got a great help from it:-D
Keith W 1:03 pm on March 3, 2010
You need to educate yourself before you buy anything. Read financial publications and compare what they say to what happens, As a novice I would start with a cheaper stock to take a bigger position in the company then a more expensive stock with a smaller position..http://www.investor-relations-firm.com
edgetrader 1:03 pm on March 3, 2010
Betsy:
To your last Q, I would say this is the worst time
to be investing?
Why?
You do not know what you are doing, and you
are looking to learn in what has to be one of the
worst market declines in history.
I am going to past a lengthy answer I just gave
to someone else because you may find it
appropriate to your own circumstances.
This is just my opinion, but it stems from facts,
and facts are what you need right now. You have
time on your side, so do not be in a hurry to
start unless, and until you have a much better
grasp of what you are doing.
Consider: After the stock market crash in 1929,
it took four years for the market to bottom. The
current "Bear" market is barely a year old. Does
it make sense to be in such a hurry, given history,
when there could be AT LEAST 3 more years of
decline.
The severity of the market drop this time around
is unprecedented. It could get real ugly before
this is over.
To your very intelligent question, how to find
good/trustworthy people? At the end, you ask
for help. Who could you trust more to help you
out, and who has more of a vested interest in
your financial well-being than YOU!
Start there. Start by acquiring some knowledge
about what is entailed in making investments.
An excellent, and inexpensive start would be
to buy William O’Neil’s book, "How To Make
Money In Stocks."
This will give you an appreciation for learning
out to make the best possible selections in
the markets. You will learn to look for the
strongest stock potentials that are already
proving an ability to appreciate in value,
You will learn that "bottom-picking" is a
fool’s game and a quick way to waste money.
O’Neil’s company publishes "Investors Business
Daily." Your local library may have copies
available for you to read. In section 2, the market
is broken down into sectors, starting with the
strongest, and within each sector, you will find
a ranking of each stock, again, starting with the
strongest.
When you invest, you want to invest in stocks
that are proving themselves worth the risk. This
will teach you how to identify them, and how you
can make your own informed decisions.
There is more, but this should be a good start.
Do well for yourself. It is not about surrounding
conditions, it is all about the decisions you
make.
To some of your specific Qs, you purchase
stock by opening an account, those are simple
mechanics. What to buy, and when, are not.
Yes, if a stock is listed at 90, it meand you will
pay 90/share, plus commission, costs.
Let me also dispell a previous answer about
"dollar cost averaging." It means to keep
buying something that is declining in value
in order to lower you average cost. That is a
myth. When anyone dollar cost averages,
they are increasing their losses and risk
exposure, at the same time.
Given a choice, would you rather buy something
that is going up, or something that is decling in
value?
If the thought crosses your mind that you may be
getting a better deal by buying at a lower price,
you may soon discover that a "lower price" can
easily become LOWER.
That is addresses in the book I mentioned.
You are asking excellent Qs, Betsy. Get the
answers before proceding, and never stop
asking questions until you get an answer.
Cheers!