Should I get into stocks?

[lightyear]

Hey guys obviously there are many places better suited for these questions but besides investment forums etc. I'd love to get some answers from people who might/not work in the industry but who might be involved with investing as a hobby.

So basically I'm going to be finishing my undergrad for a couple more years and after that probably something like JD/MBA. I'm currently thinking about getting into the stocks game more as an exercise then anything serious. I'm doing honors poli sci/econ minor and enjoy reading business/econ books on the side but deff. do not have a math background.

So the problem I have with reading on stocks is totally conflicting info. On one side you read all kinds of stories of bus drivers who started reading on stocks and in a number of years ended up doing pretty well, on the other the premise is basically that stocks is a game for 40+ Econometrics grads whom it makes no sense to compete with. Some say stocks is more random then a casino (except there is no house) and others cite that hedge funds often underperform the general market..

Basic question is, @ age 19 is it worth spending a few years getting the basics down if you are not going into full time investing?

 

[Mandrake9072]

Originally Posted by lightyear

Hey guys obviously there are many places better suited for these questions but besides investment forums etc. I'd love to get some answers from people who might/not work in the industry but who might be involved with investing as a hobby.

So basically I'm going to be finishing my undergrad for a couple more years and after that probably something like JD/MBA. I'm currently thinking about getting into the stocks game more as an exercise then anything serious. I'm doing honors poli sci/econ minor and enjoy reading business/econ books on the side but deff. do not have a math background.

So the problem I have with reading on stocks is totally conflicting info. On one side you read all kinds of stories of bus drivers who started reading on stocks and in a number of years ended up doing pretty well, on the other the premise is basically that stocks is a game for 40+ Econometrics grads whom it makes no sense to compete with. Some say stocks is more random then a casino (except there is no house) and others cite that hedge funds often underperform the general market..

Basic question is, @ age 19 is it worth spending a few years getting the basics down if you are not going into full time investing?

+ 1.

I'm in the same scenario. I'd also like to add to this by asking where to even begin as far as the learning process goes (aside from taking a couple finance courses). Are there any particular books that are essential reads? Any particular blogs/resources you fellow SF'ers pay special attention to?

 

[HelloIDistance]

I've been trading for four years now. As a basic rule I never trade penny stocks. If I could tell you anything it is stay away from penny stocks. If you want to be serious about being a trader you should also be ready to lose your money..it takes awhile to get the hang of it. I'd recommend going here http://hotstockmarket.com/ and researching it. That forum is a very good resource.

Basically I wouldn't expect to start trading and gain massive amounts...it's not going to happen. It is difficult to get the hang of it, but if you stick in there and keep learning the rewards can be very very good.

 

[acidboy]

I'm definitely far from an expert on stock trade, but I've been in and out of our local stock market for the past 15 or so years. you definitely need to understand fundamentals if you're going into it. throwing your money into something you do not totally understand is asking for trouble. you don't have to be an expert but understanding charts, ratio analyses, financial reports and all that is a good start. I've also pretty much stopped trading on what you guys call penny stocks, and now have a shortlist of companies to put my money in. corny as it sounds, my bottom line in picking which stocks to invest in is asking myself, which corporations do I believe in so much as to put my money in.

 

[joelmthw]

i would recommend using a stock simulator first to get down the basics and learning. i use the papermoney sim software from thinkorswim.com

how much money do u plan on starting with btw?

 

[Christobevii3]

Go read the hot stock market forum, sign up for think or swims paper trading platform, and do this for a year. Once you have lost all your fake money and realized who is bsing and who isn't you'll be able to think for yourself.

 

[hobojones]

I'm 19 and I've invested about half of my earnings from work into stocks. I'd say it isn't a bad idea, as long as you know what you're doing, and you have the available resources to do so. I'm not expecting to make insane 200% returns, but I figure this is better than either a) spending (most likely) it or b) putting it in the bank, where I'll accumulate interest at a snail's pace. So far, I've made fairly respectable returns, and I expect to hang in there for the long term. If you just want to be in it for the short term, don't bother. Also +1 on using a stock market simulator to get the hang of things. I believe I tried one over on investopedia a year or two back.

 

[Merlino]

Do you want to invest or trade? I.e. do you want to buy stocks for the long run (investing) or do you want to profit from day-to-day (or even intraday) market movements (trading)? It's very difficult to get the hang of trading stocks, if you're bent on trading I'd rather recommend you traded something else such as bonds which have a more limited potential for gains but their movements are also easier to understand (at a very basic level, only interest rates influence bond prices). Options are a good way to get good returns with very little starting capital and can provide very high upside potential but they're also much more complex. Investopedia.com offers some nice options 101s. If you wish to invest I agree with acidboy (and Buffett and Fisher): only invest in companies you truly believe in. And spread your investments over different sectors/countries.

 

[brown eyes]

yea, you should totally jump into it.

Even though you won't be investing "fulltime," whatever career you probably end up getting into will have some sort of 401k/403b and knowledge of investment options would be invaluable.

If you had some extra cash, open up a stock account with Etrade or Scottrade and play around. Read, do research, browse the investing forums and see what people are saying. Don't believe everything you read of course and always go with your gut feeling.

Now's a good time to invest too. Shakey economy, political turmoil, high unemployment, and etc.. The market is down. But if you believe the economy will recover, get your money in now and just wait. If you feel you can't stomach the risks or deal with the swings; keep your cash underneath your mattress. But just know, nobody gets rich working 9-5. Invest in stocks or invest in a house.

Buy low, sell high. If you can remember this basic economic principle, you'll do just fine.

 

[Gus]

Do you have an experienced uncle, aunt or family friend who has invested successfully for most of their lives? They can often give you long-term practical strategies that can be helpful for getting started. The thing to avoid is all the BS from guys who talk up the next hot thing but never tell you of how they got killed chasing "hot things". Many fortunes have been made buying thoughtfully and investing for the long term with a strategy. My high school girl friends mom got me investing successfully years ago in dividend paying stocks that had free dividend reinvestment programs. That compounding really paid off in the long run during 10 years of poor overall stock market performance (70's).

 

[ter1413]

get one of these:

 

[Valproate]

I've been investing for 8 years, and have consistently beaten the street (by between 5% and 15%) each of the past 5 years. I'm not counting on that record to last in 2011, but you never know.

If you don't love the "game," you should go read Bogle's "Little Book of Common Sense Investing" and just go with index funds.

 

[BDC2823]

First off, you have to figure out how you want to invest. What your strategy is, what your comfortable with, etc. I don't do mutual funds because I think they're too risky. If I buy straight stocks, which I plan on doing heavily within the next couple weeks for a retirement account, it's because I will be selling covered calls on them. My strategy is options because they give you increased leverage. But I've been an idiot and killed myself because I was lazy and didn't spend due diligence and didn't set stop losses. So take some advice from someone who has been in the game and make sure to know your entry and exit strategies beforehand. I.E. set stop losses! I've had options that have had 100+% ROI's that didn't mean **** cause they just degated other options that expired worthless because I was stupid and didn't set my stop losses. So, know your entry and exit points and account for them.

My best piece of advice is to invest in your financial education. This doesn't mean school. It means learning about stocks and other forms of investing. Learn about fundamental and technical analysis. I'm big into technical analysis. Learn about stochastics, moving average, MACD, candlesticks, etc. Your knowledge is the best thing you can invest in. That's what I do. Because no matter what, financial education is everything. If you want some books and authors that I ahve found invaluable, send me a pm. But beyons anything else, your financial education means everything.

 

[jenlain]

I think you should definitely get into the practice of saving and investing. This is a great habit to get into at an early age. I suggest you keep a small portion of your total portfolio allocated to short-term trading activities (according to your risk tolerance).