What's the smarter way to invest in the stock market?

Question

Let me start by saying I am completely new to this, my friend and I have decided to pool some money and hopefully see a nice return. However, both of us are very green in regards to investing in the market. We have a few companies in mind, and are thinking about pulling the trigger soon. Our first question would be what type of company to invest through? Energy, oil, etc. Also what type of brokerage, preferably one that charges lower commissions? (Not sure how it works exactly.) Also, what is the best way to invest, more shares in a company that is being sold at a lesser value (1-5 per share) or less shares in a higher valued company (20-30 per) If anyone has some advice they can kindly offer it would be appreciated. I spent the day watching CNBC and only understood about 5% of what was being discussed, so if anyone can help or recommend some literature it would be great, thanks.

Answer 1

no load mutual funds

Answer 2

ontheroadto1m has given some good suggestions. I'll add that Vanguard does have a brokerage, but its not as cheap as some deep discount brokerages. You shouldn't pick a stock based on is price. This is like asking what's better - 2 nickels or a dime.



If you are not experienced, you may want to follow the advice of perhaps the greatest investor ever - Warren Buffett, who recommends investing in a low cost diversified index fund. For this, Vanguard would be a good choice.



Since you are new, you should be aware that the value of your account will at times fluctuate wildly, and there isn't any good way to know when this will happen. On the positive side, the market has had a rough few years, and this is good for new investors providing you are very very patient. You should have a multi decade time horizon.

Answer 3

If you're new to this, I'd recommend you start investing through mutual funds. There are mutual funds investing in all sorts of stocks, and some of them only invest in green companies. The mutual fund company with the lowest commissions is Vanguard. I don't think they offer brokerage accounts, though (I'm not sure about this).



If you want to invest in stocks directly, you'll have to open a brokerage account. Your bank will usually allow you to do this, although it's likely that they will charge you a lot for each trade (I have one with bank of America and they currently charge me $10 for every trade).



A cheap alternative is Sogotrade (www.sogotrade.com), which only charges $3 per trade. When I found out about this company I was surprised at the low prices, so I was worried it could be some type of scam. I did some research that reassured me that they're a legitimate company. I couldn't find anybody who had had problems with them. Now I've had an account with them for around 6 months and I'm very happy with the price and the service.



For an introduction to mutual fund investment, check this book I recommended in my blog:



Part 1:

http://ontheroadto1m.wordpress.com/2009/04/30/the-gone-fishin-portfolio

Part 2:

http://ontheroadto1m.wordpress.com/2009/05/08/the-gone-fishin-portfolio-ii



For an introduction to stock investments, check out this other book by Peter Lynch, one of the most succesful investors ever (he managed the Magellan mutual fund from 1977 to 1990, with an average return of 29.2%). The book was written at the end of the 80's, but it's surprising how relevant everything it covers is still today:

http://ontheroadto1m.wordpress.com/2009/05/18/one-up-on-wall-street



I hope this helps!

Answer 4

http://whit.me/StocksRobot



Before you start investing, check that site out.

We all heard of "Forex RoBot" which automatically executes decision intelligently to make gains... that site features a Stock Market RoBot! This website uses a Stock Market Robot to track and intelligently pick the best stocks that have high potential to make huge profits.

To make lots of money you got to spend some money. That is the official website that helped me start making thousands recently. It was featured in Forbes magazine before - it is damn good. Many people praised the Robot and wrote testimonials.



Especially with the current economic crisis, imagine how much you can make once it hits the bull market!



Here's an evidence:

On 18 May 2009 (last month), a few hours before the stock market opened, I received an e-mail from the website that UOMO penny stock will rise to new highs. I bought 10000 stocks at $0.35 (the closed price for the weekend and before the market opens) for $3500.

As soon as the stock market opened, the price soared till $0.52 and closed at $0.81! The next day, it rocketed to $0.90 and I was informed by an e-mail from the website to sell the stocks off by the end of the day.

And luckily I did because the price fell after that. I earned a hefty profit of $5460 (After broker fees) just like that in 2 days.

http://finance.yahoo.com/q?s=UOMO.OB

See the graph if you do not believe me!



So believe me, this robot really works. Check out the live demostration video at the website if you still doubt it.



P.S: Please use Firefox as I just found out the website is only optimized for Firefox browsers and NOT Microsoft Internet Explorers.

Answer 5

Take 6 months to a year learn the basics. Why make typical "newbe" mistakes (that will cost you money)?



Typical "newbe" mistakes include;

Finding the cheapest broker.

Opening a brokerage account before doing anything else.

Trading penny stocks (under $5 a share).

Looking to make a big score (trade with big profits).

Not understanding how important trader psychology is.

Not understanding how important money management is.

Not understanding that job #1 is not to lose too much money.

Not understanding that job #2 is to make money (vs thinking it's job #1)

Following CNBC (or any other news media).

Following "Mad Money" (Jim Cramer).

Not putting a "stop loss" on every trade.

Not understanding what you're investing in.

Buying a stock because its price is soooo low...........

Buying a stock because the company is so big that it just can't fail.



and so on......



Stay in reality. Don't use "hope" or "belief" to guide your trades. Never (ever) take stock tips.

Answer 6

First, forget all those finanacial shows on CNBC, MSNBC, Bloomberg, etc. They are all full of BS. The ONLY one worth watching is Mad Money (on CNBC). It moves pretty fast, but the host, Jim Cramer, is an honest guy who made hundreds of millions in his career and now gives his advice to us. Don't watch any other financial show. As far as a brokerage account, check out zecco.com. They give you 10 free trades. After that I think a trade is only $5. (read the fine print).



check out my blog for the stocks I think are going up. Rather than relist them here, I'll just point you to my blog. Its easier.



http://kmsweeklystockpicks.blogspot.com



you can connect to me on twitter through my blog. this way you'll get notified when i create a new blog entry. you can also chat with me through my blog if you have any questions. I chat with people a few times a day and wouldn't mind hearing from you.



I have been investing since 1985. In 2007 I retired at the age of 40 after having made over a million dollars in the stock market.

Answer 7

Wow...All kinds of answers and people trying to sell you stuff. Fun,huh? I am a professional trader and willing to mentor and help you out. I am not and will not try and sell you anything. I'm just a regular guy that works from home and is getting rich from self education and willing to share. My email is [e-mail] and my name is Brian. I hope to hear from ya. If not, good luck to you!!!

Answer 8

consistent dividend from 2% to 15% monthly is all you want

The reliable and safe investment is myfxfunds (My FX Capital)

search for myfxfunds in yahoo search engine for more information.

Answer 9

google stock