10 Responses to “I’d like to invest my money but I’m a beginner?”

1. Jonathan Says:
   April 6th, 2010 at 5:01 pm

   Hi Amy,

   I was in the same boat a couple of years back. I opened an account with an online brokerage and started trading straightaway. I got lucky and made some cash fairly quickly, then just as quickly lost all the gains and then some. Fortunately, I met someone who had been investing for a while and he gave me extremely valuable advice – (1) start with paper trading i.e. in a simulated trading environment where you invest virtually (2) get a basic understanding of how businesses work because what you are doing when you buy stock is buying a piece of a business (3) keep an investing journal where you track all your trades and most importantly have an entry & exit strategy so that you reduce the effect of emotions on your trades.

   All of these strategies have served me well and helped me pick more good investments and fewer bad ones. I’ve read a lot of books on investing – warren buffet way, rule number one, jim cramer’s books, random walk down wall street and a couple dozen others. I would start with random walk first because it gives you a good feel for wall street jargon, then move on to rule number one which walks you through a process of buying stocks of a company at a good price. If you want to follow the top investors/traders you could check out covestor.com but I woud suggest paper trading along with them rather than putting in real money to start with. The emotions involved are completely different when you have real money on the line but you’ll make fewer mistakes. If you like to invest in companies whose products you use personally, then checkout weseed.com (resources mentioned below).

   I hope I haven’t lost you already This is more than enough to begin and I dont want your head to explode from too much information. Learn slowly and keep applying what you learn. It’ll all start coming together and you’ll get the hang of it with experience.

   Good luck,
   –Jonathan

2. Midnak Says:
   April 6th, 2010 at 5:01 pm

   If you wanna make a career of it, go to college. If you wanna just be smart and save money, diversify. A common mistake is buying from large companies like microsoft. Instead, buy a couple shares from a bunch of different companies.

3. Age of Reason Says:
   April 6th, 2010 at 5:01 pm

   Research first. Borrow or buy the book "Investing For Dummies" and watch Squawk Box on CNBC
   Look at companies that produce products you know and love. This way you know their products are good. Investing in stock is long term and very few make you rich, quickly

4. Qwertycalifornia Says:
   April 6th, 2010 at 5:01 pm

   Well I’ve made about 100,000 in investing in many companies. Don’t listen to investing clubs, I would invest in from my own experience first general growth properties. General Growth usually makes me around 10% a month after my losses. So I would just do General growth and investment banks an tech companies. What ever you do do not invest in book store companies and restraunt compananies. Don’t open a restraunt either

5. Steve D Says:
   April 6th, 2010 at 5:01 pm

   Do NOT ..repeat NOT invest a dime until you have educated yourself on investing. DO NOT..repeat NOT NEVER EVER take anyone’s advice here about a company/stock to invest in. You have no idea what their qualifications are and whether they did due diligence in researching said investment. If you are intent on investing, you need to do a few things. Start by heading to the local library and ask the reference librarian to show you to the area with books on investing. Read a few (start with something like Investing for Dummies, etc.).

   Next, head over to the SEC’s web site. and to this site – http://www.sec.gov/investor/links.shtml

   There are a ton of links to places that provide educational information/publications on how to invest. Avail yourself of the resources there. The reason that stocks return 8% (on average) annually is because of the risk involved in investing. The higher the risk, the higher the reward.

6. Carlos R Says:
   April 6th, 2010 at 5:01 pm

   Amy: I have 2 suggestions for you. First, go visit a reputable mutual fund, like Fidelity, T. Rowe Price, Vanguard, Franklin, or something similar. Talk with one of their investment advisors, and pick a mutual fund that’s in keeping with your objectives, time horizon, and tolerance for risk.

   The other approach would be to find a company you like, and after doing some research, you think has good earnings prospects for the future. Something like GE, Ford, Dominion Resources, or other known, established companies. Of those, find some that have Dividend Reinvestment Plans (also called a DRIP), and that pay a dividend, and that allow you to buy your initial investment via the DRIP. I think Proctor & Gamble is one such firm. Once you decide what you want, sign up for that company’s DRIP, send them a check, and you’re on your way.

7. dad_brad Says:
   April 6th, 2010 at 5:01 pm

   First, learn and practice. There are virtual trading websites that let you buy/sell without risking real money. It’s a great way to make rookie mistakes and learn the mechanics of trading in the stock market.

   Regarding the best companies to invest in: that depends entirely on you, your risk tolerance, your time frame and your financial goals.

8. jlf Says:
   April 6th, 2010 at 5:01 pm

   It’s great that you want to learn; everyone needs to understand the basics of investing (and they aren’t that hard). A great starters’ book is "Investing For Dummies." Very easy to read. There are also a number of good websites:

   http://www.investopedia.com and http://www.morningstar.com have tutorials you can work through.

9. I.R. Says:
   April 6th, 2010 at 5:01 pm

   According to investing expert Robert Kiyosaki (Rich Dad Poor Dad author) he says people should be investing in silver.

   He’s huge in the real estate game, but he said that he was investing in silver long before he was the multimillionaire he is today. If you watch his investing DVD’s he also mentions silver and the money he’s made with it. Not only that, but he says silver is a great security.

   He’s quick to point out that in 200 years nobody is going to be diving into the deep ocean for US dollar bills LOL!

10. Simon Cowell (Q & A judge) Aldo Says:
    April 6th, 2010 at 5:01 pm

    here just give it to me, ill make you millions.

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