Check out my plan (beginning to invest in stocks)

Spoudazo said: "Ok, feel free to critique things as I'm still learning. I've been reading several books and watching CNBC when I have time as well. I enjoy doing my own research and am able to learn rather quick on my own, so that's a blessing :) Now, in a few days I'm opening up a Scottrade account with $620 that I have extra, and then after that, I'll continue to buy shares weekly, and will probably spend about $200ish or so per month. I'm still living at home while I'm in college, so I need to do something with my money instead of throwing it away with renting an apartment (which was tempting, but from a financial point of view, I don't need to). I'm not naming any stocks [i]right now[/i] as I'm currently looking, but how should I divide up the initial $620? Try to buy about 5 well-researched stocks, and continue on from there? Thanks for any advice!"

Spoudazo said: "BTW, I was watching the Suze Orman show and she said something that really made sense. She said she has rarely ever seen a person that would tear up a dollar of 5 dollars if she asked them, and even the ones that do do so in a very hesitant manner. Then she mentioned how we throw our money away on things we don't need and won't want shortly after buying them. This really hit home, as I'm still young and have sometimes spent money on cloths, electronics, etc. that are just so useless that I could have invested them. So, I'm trying to stead of buying (for example) some new PC program or game I like that I won't use long, I'll just put that money in the market. Then hopefully after a while, will be able to do some work with real estate. Just a little extra "testimony." :D"

alhamid said: "looks like you have the right idea. savings is the key."

thebeave said: "Maybe I wouldn't throw it all in the stock market. Try to keep some in something a little more secure. It is good to be thinking about investing young though. I am in the same situation as you, living in home while in college. Unfortunately, I only make roughly 400 a month and I have to put 20% of that into the bank for college no matter what, thats a condition my mom set. I save 25% for investing but that only amounts to about 100 a month, which is better than nothing. You are lucky if you can afford to invest 200 a month, it will add up quick. Time is a good ally with investing money."

chahinemm said: "my advice would be added to the post before which is to add 50% of your savings into a saving account with good interest rates and keep compounding in it on a monthly basis. in the first few years it will look like peanuts but i can assure you that after a while it builds up phenominally fast and fat ;) that will also allow you a backup fund in case u clean up ur stock account which being realistic occurs. loosing all money should be in the eventuality of every investor. at least my 1 1/2 cent and i hope that helps. chahine"

alhamid said: "yes, i believe in having cash too. plus make sure you pay off all your debts too"

Spoudazo said: "I currently make about $20,000/year before taxes, and I draw about $300/week :)"

LanceJ said: "[QUOTE=Spoudazo]Now, in a few days I'm opening up a Scottrade account with $620 that I have extra, and then after that, I'll continue to buy shares weekly, and will probably spend about $200ish or so per month...I'm not naming any stocks [i]right now[/i] as I'm currently looking, but how should I divide up the initial $620?[/QUOTE] Well you stated that the $620 is EXTRA money... You also stated that you'd be able to add about $200 per month to your Scottrade account. Here's the problem. You should always diversify. But with $620, your cost basis is terribly high because your per trade fee is such a high percentage of your initial investment because it is so small. You need high growth stocks with that little amount of money, but high growth stocks are much more risky. In summary, I don't like the fact that you are only starting with $620 and you are a new trader. I coached an investor who only started with $500, and let me tell you, it was a pain! We used a buy on momentum high risk strategy to grow his $500 to $1,000 in a few months, then diversified him once he had $1,000. It was such a risky move that he insisted on (he's a sports better) that I will not post about momentum investing here and do not recommend you do that. Your main goal is to get that $620 up to a minimum of $1,000 before you begin diversifying (remember, if you want to stay in the game, you must diversify. I've seen more new, low initial money, investors get knocked out of the game because they did not diversify, don't be one of them!). Even just sitting in a ScottTrade account, you may earn a percentage via a money market until you get that balance up to at least $1,000. TDWaterhouse works like this. If you have the money sitting in cash, they'll automatically have you buy money market shares that earn about 3.5% per year. Then when you go to purchase a stock, they'll automatically move you out. Don't know if ScottTrade does this. Secondly, you mentioned you like doing research. If that's the case, you've got to go with TDWaterhouse. TDWaterhouse gives you all the $20 Reuters reports that sell on Yahoo Finance free as part of your membership. They also give you Market Edge (which is an automated buy/sell signal system). They also give you the analysts "First Call" estimated EPS figures both past and future. Cool .pdf reports generated on the fly on most companies traded on major exchanges, etc.. When it comes to research, ScottTrade sucks. If you want to be able to do indepth research, then I strongly recommend you sign up with a TDWaterhouse account. Keep in mind that ScottTrade's trading pit is nicer than TDWaterhouse, especially for day traders with streaming instant quotes which TDWaterhouse doesn't have. However, you don't need streaming quotes to make money here unless you want to "day trade". However, TDWaterhouse was bought out by AmeriTrade, and so they will be releasing a new trading pit interface soon that will be more equivalent to ScottTrade. So, in summary, if it's day trading streaming quotes lots of instant generated charts flashy trading pit, it's ScottTrade you want to go with. If it's indepth research you want, then it's TDWaterhouse you want to go with. TDWaterhouse charges a little more per trade, but that's because they have contracts with Reuter ProVestor Plus Reports, Goldman Sachs (on some companies they are covering), Market Edge, First Call, etc... So sometimes going for the cheapest $$ per trade is not always the smartest. Especially if you are a research fanatic and avid reader like I am. Another nice thing about TDWaterhouse is that they have a whole banking suite of products. One of the things I have is a TDWaterhouse check system where when I want to take money out of my TDWaterhouse brokerage account, I just make sure I sell a stock and the money is in cash (which they automatically move into a money market earning account), and then write a check out to pay a bill or something. The checks have my name printed across the top and look exactly like the checks issued from my local bank, the difference being the TDWaterhouse symbol on them and that the $$ comes right out of my brokerage account. Anyways, back on the research thingy. Both my boss and a co-worker come to me when they want indepth research reports (and they have no idea how I get such good information either, I tell them I have my "connections"...lol...job security). I have TDWaterhouse and they both have ScottTrade. That really says it all doesn't it? Nuff said."

Spoudazo said: "Ok, I'll look into TDWaterhouse. I'll have $1000 or more just in a few weeks or less so I can do that. [B]Big problem though[/b], I had a problem with a credit card I had, I scheduled payments online, and somehow their my payment mest up and didn't go through (it appears they tried to take it out of the account a day before they were supposed to, as I had direct despoit from UPS at the time, so I always scheduled the payment on days UPS would put my check into the count). Well, between the time that happened (I didn't know my payment didn't go through) I switched to construction, as I always enjoy learning something new and UPS wasn't working well with school. Well, the construction company lost work due to various reasons, so they had to let go the newest worker--ME! So I then go back to the credit card company online to make another payment and notice my account just got $60 worth of fees and two month payments doubled up. Well, I had just lost my job (my mistake for quitting UPS I suppose) so I couldn't pay them. Well, apparently that mest up my credit, as I'm young, and so my FICO score isn't the highest. So while I was at the Scottrade office I was turned down for starting an account, even though I said I'm not wanting an options or margin or options/margin account. I don't understand why I have to be "Credit worthy" to start a Scottrade account when I'm not borrowing money and not putting them into risk. So, as soon as I got home, I called the credit card company and brought everything current and payed about 25% of the account off, and will pay the rest of it off soon, along w/ my other behind payment :rolleyes: I know, I know, it's my fault, a young, stupid mistake, but thanks to work and having a bunch of stuff I'm selling (car parts), I'm paying them off quickly. So, with TDWaterhouse what kind of credit do I need? Apparently I'm going to have to fix my credit score ASAP but I know that credit is ruined it seems overnight but takes much longer to fix :( Any advice? Sorry for the book in form of a post! PS: My networth sank a good bit when I was injured at UPS (part time work) but couldn't work my fulltime job (landscaping), so I was living off a measily $140/week and that was just barely enough to pay bills, sometimes, but not all the time. So I'm recovering from that currently, didn't know my credit score got mest up so easily. I'm going to get a free credit report as well."

Spoudazo said: "It seems Scottrade is getting better reviews than TD Waterhouse. TD Waterhouse has "main. fees" for accounts w/ less than $25,000 so I would say the % I'd earn on my investment (hopefully) would be eaten up by these fees. :confused: [url]http://www.dogsofthedow.com/waterhousefeed.htm[/url] <---"

LanceJ said: "Pete Grosz runs a company called VP International who is an investment advisor, and who pays the bill on the website you gave dogsofthedow.com TDWaterhouse, plus all the tools I mentioned above, also gives you The Outlook, a $700 per year publication free, delivered to your inbox about once a week, and a big issue for the next year. In otherwords, if you have such great research with TDWaterhouse, and excellent commentary by 5 star analysts with the ability to get deep research for free (higher per trade costs of a couple dollars), why would you need an investment advisor like Pete Grosz? BINGO... you've got many investment advisors running websites that bash TDWaterhouse because with the deep research you get, you're in competition with investment advisors. TDWaterhouse's who niche market is making "Intelligent Investors" (no doubt you've seen their ads from that Law and Order guy)... in otherwords, investors who can get the information they need for themselves to make intelligent choices, don't need investment advisors like dogsofdow as much as investors who can't get the information they need unless they pay $20 per report. Just becareful of what you read and don't take it for the gospel truth. There's always a motive somewhere for someone who is an investment advisor and has to pay a monthly fee to keep a website up, and many investment advisors don't care for TDWaterhouse who purposely tries to make investors that don't need investment advisors (aka Intelligent investors who can make investment decisions on their own by doing their own research). Finally, I have first hand experience with both platforms and like I told you, if you want a better trading pit with lower per trade fees, go with ScottTrade. But if it's research you want (which your original message indicated that you are an investor who wants to do research), go with TDWaterhouse. As far as less than $25,000 cutting into profits, I had less than $25,000 for years with TDWaterhouse and it never slowed me down and they never cut into my profits significantly. And I always pull EVERY report I can on TDWaterhouse for my stocks, my bosses stocks, my friends stocks, etc... to really get my money worth. I can tell you that if I would have ordered each report from Reuters ProVestor alone, which is about $20 a piece, the price tag would probably be upward of $20,000 easy over my years of trading, just for Reuters Provestor reports. If you add Market Edge which is a $15 per month service on top of that, and The Outlook for $700 per year, etc....you get the point. I'm all talked out on this subject and can't put anymore time into this message thread at the moment. So good luck to you and I hope you make lots of money in the stock market, whichever online brokerage service you use."

Spoudazo said: "Thanks for the detailed response, thanks for taking your time and laying things out. Will most def. look into it more detailed than in previous times, thanks again :)"

HappyHarry said: "I've had a Scottrade account since 1991 and always ejoyed it. They were cheap and efficient discount brokers before they went online and they still are."

skelo said: "I would suggest that you buy a good book and read it. I think that the book by W.Scott Simon would be an excellent choice for a beginner. The book is titled Index Mutual Funds-Profiting from an Investment Revolution. Today there are about a dozen books in print that will give you a good start in your investing career. There are thousands of books out there that are just plain trash. Be sure you use a deep discount on line broker. Under no circumstances use a full service broker. A good on line broker is MB-TRADING whose commissions are 1 cent per share with a minimum ticket of $1.00 There is an on-line book that you can read that I wrote that can get you started right. Go to [url]www.index101.net[/url] to read the book. Gordon"

SHIFTY101EASY said: "wait...MB Trading commissions are 1 cent a share with a minimum of 1 dollar of shares? Is it actually any good or just really cheap? Im interested in this also because im investing with less than 1000 dollars as well. Even a discount broker like Firstrade's commissions (6.95) are sort of big in relation to how little im making and trading with."

LanceJ said: "Make sure that with any broker or brokerage service you use, you check them out first at: [url]http://www.nasd.com/web/idcplg?IdcService=SS_GET_PAGE&nodeId=469[/url] You not only can find out if they are licensed to sell you securities in your geographical region and if they are in good standing, if you live in the U.S., but you can see any problems, settlements, litigation, or regulatory action over the past few years. Everything but the litigation and regulatory action you can see immediately, for the rest, you order a report which is delivered to you via e-mail usually within a couple of hours."

SHIFTY101EASY said: "thanks. I love the cheap commissions of that MB brokerage, except i dislike how you cant tranfer funds in and out of your bank account. Its very annoying to have send a check and wait 7-10 days for it to get there and to clear before you can add more money to your account. If i cash one of my savings bonds i can have around 840 dollars to trade with in my Firstrade account and thats probably a worthy amount of $6.95 commissions would you say?"