Advice for a New Investor

[CavalierOn20z]

I am a complete rookie when it comes to stocks. I realize the potential, and Truly want to get involved. I have been tracking a few stocks, watchin Jim Cramer... quite a few have been gaining generally most based on what he reccommends to buy. I'll go and put it on my watch list.

Is Investors Business daily a good investment? It was like $300 for the year. I need to learn the Lingo would It likely be too far above my head?

My Problem is:

1. Fear of jumping in just as the stock begins to fall.. this has led me to miss out on a couple decent sized gains so far. Which hurt my feelings :-(
2. My Funds Available are not very large. I really can only afford investing around $2K - $3 K
3. ------So That Limits My possible investments to stocks under $5, and more likely well under $5, as $5 gives me approx. only 500 shares.
4. I simply don't Understand How to Maneuver with Stocks. The Language generally leaves me curious to what exactly is meant by what I read.
5. Therefore I don't know what Key Financial Stats to pay attention to. What Ratios mean Good/bad, Growth, etc.

I bought a penny stock on the advice of an old co-worker who said he used to do that stricly, day trade... sounded good but its at .0718 as of Friday I bought at .102 5000 Shares (SHRN.OB)

Anyone Can help an eager investor scared to lose his wallet on this Stcok game?

 

[Awilli1055]

sell the penny stock now, since u don't know what u are doing u r just giving away money. soend a year trying to come up with a plan. then know ur plan, work ur plan. I suggest TA, but that will require u to learn what u are doing.

 

[Temujin]

Man I'm like you I just started messing with stocks about a year ago. When I first was inquiring just like you, a brother on here suggested sharebuilder.com. Which I have found very easy and very convient.

Unless you have the time and interest in studying and analysing stocks and stock trends I wouldn't suggest buying stocks to make a quick dollar. Look at them more as a long term investment. If that is the way you want to go invest in a sharebuilder plan. The one I have I set up as an IRA so my investments are tax deductible. You can set one up with no money down at all and the cost is only 12 dollars a month but you can make up to six stock purchases a month. This breaks down to 2 dollars a trade and you can't beat that. The only catch is you can only purchase on tuesdays but since I am not looking at the day to day up and down that is really not a big deal to me.

Sharebuilder will actually set up a plan for you for free. If you go through the questionaire it will analyze them for you and set up a plan if you like. Otherwise you can invest a dollar or 100dollars whatever you want. Sharebuilder is cool cause you can buy equity in a stock you don't have to buy a whole share. If you want to invest $50 in microsoft you can buy 50 worth of microsoft which might get you 1.5 shares.

But there is plenty of stuff out there but your approach depends on whether you are looking for a long term investment or immediate income. If you are looking at immediate profits it's gonna take a lot more time investment in understanding the market. If you are looking long term low risk investing on your own is no big deal.

 

[BigATLslim]

CavalierOn20z, I respect the fact you started the thread by saying you don't know. That is a strength that I respect on a personal level. Anyway, you have made the first step by having an internet connection. Allow this to be your only financial investment to learn about stocks for the rest of the year.

Secondly, I would suggest finding the nearest or the best library nearest you and getting a library card. You can get all the Wall Street Journal, Investor Business Daily, Barron's, Money, SmartMoney, Forbes, Fortune, Kiplinger's, Black Enterprise or any publication for free. If the magazine issue is not current, you can take as many of the back months home just like books. I suggest scouring the section that has to do with money and read all you can about stocks. It sucks to many but it is effective.

Thirdly, you will need to decide what magazine and stock books are for you so you don't get swamped. Are you looking for large cap, mid cap, small cap, penny stocks or international stocks? Keep that two or three grand in an interest bearing account while you invest in your knowledge. Knowledge increases profits and minimizes losses before real money ever gets involved.

Finally, after saying all of that, I would tell you to F*ck stocks. The returns are horrible compared to other investments, less than 1% of your wealthiest people made fortunes soley from stock investing and your best bet is to begin to read the Robert Kiyosaki series, Rich Dad Poor Dad so you can learn how a business and real estate will make you more money faster. Just depends on how fast you want to get rich. That's my wooden nickel. Hope it helps.