Pick me a stock

Discussion in 'Finance, Investing & Economy' started by eplkewell, Aug 26, 2006.

  1. eplkewell

    eplkewell Member

    Aug 27, 2004
    Grand Rapids, MI
    I'm an 18 year old college student with a $1200 stock fund lying around. What should I invest in? If you know why, that's even better, but any suggestion is alright.
     
  2. junjunforever

    junjunforever Member

    Feb 18, 2002

    I'd say invest in a large company you feel most comfortable with. My first stock was Sony, because I liked Playstations, and since I believed they would make a comeback. Your favorite bank. Your favorite gas station. Your favorite auto-company. Your favorite search-enigne. Anything would be good.

    I would also say you should buy no more than two companies stock. it takes around $20-$30 to buy and sell the stock. That's already 3% of your investment. Splitting your money means you'll have to pay around 50 bucks on commission.
     
  3. eplkewell

    eplkewell Member

    Aug 27, 2004
    Grand Rapids, MI
    Thanks for the advice. Any other opinions would be great.
     
  4. Footer Phooter

    Jul 23, 2000
    Falls Church, VA

    Scottrade: $7 trades. $500 minimum to open. Therefore, rather than $50, you'd be paying $28 for buying and selling 2 stocks.
     
  5. prk166

    prk166 BigSoccer Supporter

    Aug 8, 2000
    Med City
    Are you just looking to put the money into something and let it sit?

    If so, I'd say some mix of
    SPY
    QQQ
    VTI

    SPY is an SP500 ETF. QQQ is a NASDAQ ETF. VTI is a total market ETF. You could also find a mutual fund that was pegged to those indexed and invest in them that way and be able to skip paying the commissions.

    I'd highly recomend against buying a single stock or even 2 or 3 company stocks with the money you have. You don't have much and it's unlikley you're going to buy a stock that will outperform the market. Your 18, you have plenty of time for this money to grow. You don't need to take any big risks now.

    Have you looked at US Treasury iBonds at all?
     
  6. eplkewell

    eplkewell Member

    Aug 27, 2004
    Grand Rapids, MI
    Could you say the exact same thing again, but in basic English.

    And for the guy that suggested using Scottrade- that's what I have. I juts need to buy something now.
     
  7. prk166

    prk166 BigSoccer Supporter

    Aug 8, 2000
    Med City
    IIRC if you look around there are mutual funds that will let you invest in them without having to pay any fees. I think that's your best bet. Find one or two of those like that AND that are index funds. That is, they have very low fees becasue they simply buy stocks based on the S&P 500 index or the NASDAQ 100. I'd go that route because, no offense intended, I doubt you're going to make good decisions in buying a stock or two. Just let the market do it's magic and it'll give you more time to pay attention to things you should at your age : beer and boobs. :)
     
  8. junjunforever

    junjunforever Member

    Feb 18, 2002
    Prk's advice is very good, and works well for both long-time and short-time trader, but i have a different philosophy in starting out in trading.

    Buying index ETF funds are a good way to safely increase your investment, but we should realize he has $1,200. If he gains 30% in one year, thats still only $360.

    If he wants to trade stocks and understand how it works, i think its better that he buy individual stocks, and understand how


    Personal experiences

    One of my first stock was MEH, an airline company. This was during the rebuilding of post 911. All the airline stocks once crashed out to the bottom, and then the values have multiplied nearly 10 times from their bottom. The stock rose 20% within the week i purchased, on the news that labor union had agreed to some sort of deal. I thought it would increase even more, but the stock kept dropping and dropping. I eventually sold it at around 20% loss. I learned how investors can overreact to the news, and not to be too greedy.

    Or Sony. They came up with a decent plan to bring them back to profitiability. I always liked Sony, so I invested in them. But their stock value refused to go up and stayed in the same range. I grew tired of them and sold them after a year. Later, their value rose 50% about half a year after i sold them. I learned that even if companies have a good future plan, their stock value will go up after the plan starts to effect the balance sheet.

    I still learn a lot trading individual stocks. Trading Ford and Microsoft, i got a better feel of how company buy backs and short trading effects stocks. I try to follow the company news, and understand how ratings upgrade, earning reports, news on delay of certain new products can effect stock value. How important dividends are for long-term traders.

    If people are serious about understanding the stock trading, i think its good to trade individual stocks. I began with $1,000 six years ago as well. Understand the basics when you can, even if you may lose some money. But if trading stocks does not interest you, but just building equity does, ETF funds are the way to go.
     

Share This Page