Reply
Established Contributor
wildcat
Posts: 508
Registered: ‎04-10-2007

Question about stock market

I know this is a terrible time when it comes to the stock market but I am wanting to educate myself on this subject. Also what is the minimum amount of money a person needs to open a account with etrade or some other online broker and does anyone have any advice on good books or sites to read where a person could educate themselves.
Contributor
JayToo
Posts: 86
Registered: ‎12-25-2007

Re: Question about stock market

[ Edited ]
Books I recommend:
Peter Lynch "One UP on Wall Street", "Beating the Street", and possibly "Learn to Earn"--tho' it's been years since I've read the last one, so can't say for sure.

More advanced, for the future:
"Common Stocks" Philip Fisher
"Intelligent Investor" Benjamin Graham (the version with the preface by Warren Buffett)

I'd read anything that Warren Buffett writes/says, including his writings on berkshirehathaway dot com (including the "Owners Manual" and the letters to shareholders for the last several decades).

I'd stay away from etrade; I can personally vouch for scottrade ($500 min to open) and schwab ($1k min to open).

A couple of general points: expect a hard inquiry upon opening-- don't listen if they say otherwise.

I recommend keeping as little cash in the account as possible, the interest paid is laughable. Better to keep it in a high-yield saving account linked to your checking, then deposit a check in your brokerage account when you are ready to make a trade. With Schwab, for instance, when you deposit a check in a branch, the funds are immediately available for trading (tho' there is a hold if you want to withdraw this within two weeks or so). Incidentally, the CSRs at schwab are phenomenal. For scottrade, the customer service is handled by your local branch-- mine is fantastic.

Do not put in "market order"-- rather put in a "limit order" even if for the current market price-- market orders are too easily... umm.. let's say "manipulated".

I would urge extra caution picking individual stocks; I'm a big fan of index funds including index-ETFs. Investment timeframes should be long and proper diversification is extremely valuable.

I'd be very dubious of the plethora of so-called investment "experts" --even (?especially) of the prominent ones from prominent firms. Personal finance/investment magazines of which I'm a big fan: Kiplingers, Money, Fortune.

Best of luck... er fortune!! :smileyhappy:

ETA: just to pass along the following to which I always refer-- from Warren Buttett tho' perhaps originally from Ben Graham in the 30s:

"Buy stocks with a margin of safety.
A stock is part of a business.
The market is there to serve you, not instruct you."
Also from Buffett:
"Be feaful when others are greedy, be greedy when others are fearful."
Message Edited by JayToo on 10-31-2008 02:53 PM
Recent Ficos 815+
I do not do business with crooked companies.
crap1, United Airlines, Home Depot, Volvo will never make a dime from me.
Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Question about stock market


wildcat wrote:
I know this is a terrible time when it comes to the stock market .....

Now's a great time to buy!!

 

IMO, stick with mutual funds, especially in the beginning. Try to go with a 401(k) first.

Contributor
JayToo
Posts: 86
Registered: ‎12-25-2007

Re: Question about stock market

Roth IRAs are awesome, too! (Possibly Roth 401ks, too, if the employer offers one.)

Something like:
Roth IRAs > sliced bread
Roth IRAs >= nice wine and bread
:smileyvery-happy:
Recent Ficos 815+
I do not do business with crooked companies.
crap1, United Airlines, Home Depot, Volvo will never make a dime from me.

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+