This Year's Best Stocking Stuffer: Stocks
If you have some extra cash right now, there's a big sale going on right now you should know about. It's called the stock market.
When a place like Macy's has a shoe sale, you want to be a buyer... This current market situation is like that Macy's shoe sale: It's the stock-sale of a generation. So keep doing your dividend reinvestment programs, keep on dollar-cost-averaging, and keep investing in increments. Two to three years from now, you'll be glad that you did, or wished you had.
—Consuelo Mack, host of PBS' "Consuelo Mack WealthTrack".
Stock market's silver lining [Bankrate] (Photo: Ben Popken)
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@LoganAdams: Yep, we've invested about $2,500 and as the Dow sits right now, we're up a few hundred.
There are lots of companies I'd love to buy right now if I could afford to invest $10-15,000, but we're just not comfortable risking more just yet.
Remember, small cap leads economies out of recessions. We've got the January small cap effect (hopefully) right around the corner.
Two to three years from now, there's a 50% chance that 70% of the companies you invest in today will be completely gone. So keep in mind that this "Sale" might also be considered a "Clearance".
It's a good time to be 25 and a bad time to be 65, is the message here :)
In all seriousness invest if you want to retire. If you think our parents generation fucked up...have you met 8 year olds today? I can see it in their eyes, whatever hasnt been sold to china will be sold to the Halo Covenant Aliens for pennies on the dollar!
@m4ximusprim3: Everyone keeps saying that, but if you're 65, shouldn't you have already moved all your stocks to bonds like 10-15 years ago?
OMG stock advice on the consumerist now. so what if Consuelo Mack is completly wrong and fundamentals matter again making stocks drop 50% from here?
I have no idea how or where to even start investing. People have told me things like "don't until you have a large pool for your initial investment".
I'm not talking about my retirement fun here... I'm talking about how I'd like to toss money that is currently going tinto a savings account into some sort of fund... where's a good place for an investing newbie to learn what's going on? Does anyone have any tips?
Any site I've seen is either throwing terms at me that I dont' fully understand, talking about generic terms I do understand like dollar cost averaging while giving no real "here's how you do it" advice, or so obviously trying to sell me a product that I instantly am repulsed.
I know that now's a perfect time, and with a new daughter and a soon to be wife and an ecenomic recovery coming at some point down the road, I'm getting very anxious to invest, if only I could get started...
@WiglyWorm: Look into Stock-Trak, its the best simulator I've seen. Its $25 but it gives you literally every investment vehicle in damn near real time. Any number of sites let you set up mock portfolios so you can practice and learn a little.
The how to is difficult and will take time to learn. I'm a technical analysis guy as opposed to fundamentals. Even more important than learning the how to, is learning discipline and patience.
My recommendation would be to start with some basic funds (index and small cap funds). While planting those seed you can start learning about what to look for in individual stocks. Also, find a friend or two who are interested in finance and economics that you can have discussions with and bounce ideas off of. You just need to start following the day's news and speaking the language, the rest will follow.
@cordeliapotter: Probably, but most of the big financial companies were pushing index funds like they were a safe alternative.
I suppose I should have said it's a bad time to be 65 with a brainwashed financial advisor.
P.S. I'm 25, so take this with a grain of salt :)
Finding a buddy or two who share the interest in finance and economics is how I got started. I also used Google's portfolio thing and tried it out with virtual cash with an amount equivalent to what I was actually capable of investing. The key is to make it as realistic as possible.
Also, I think it turns the sort of boring research part of investing into fun if you guys set up another virtual portfolio for a fantasy investment game, like how you would play in a fantasy baseball league.
@WiglyWorm: Check out The Motley Fool (www.fool.com) -- lots of good beginning (and veteran) investment advice, and it's free. There are pay newsletters and other stuff you can sign up for, but use of the vast website and articles is free. You might also consider picking up a book by the founders, Tom and David Gardner; lots of very readable and useful information for fledgling investors.
Not only is it great advice, it's also generally fun and entertaining to read.
@HIV 2 Elway Resurrected: What about the "save up 3 grand before you even bother" that I've been told? That sounds incredibly... wrong to me. I would think any ammount I can put in would be good, as long as I can make monthly contributions...
I have been buying as much stock as I can since October 10. This is the greatest opportunity since 1974. The fact that the media is all doom and gloom gives me more inspiration to buy. The media talking heads don't know the difference between common stock and livestock. The big sale is on.
Anyone want to lend me a few grand to invest?
@WiglyWorm: Most funds do have a minimum but it's in the $1000 to $2000 range. After that minimum contributions may be $100 to $1000, but are typically closer to $100.
If you are buying individual stocks, it is in your best interest to make larger purchases since you can then spread your commissions across more shares.
Check your profile dealie, I've got some more info I can send your way.
@WiglyWorm: I opened an account with Sharebuilder.com (now owned by ING) and started of with $50. I set up an automatic investment plan there.
They ask a few basic questions to see what kind of risks you are willing to take (more risk = more *potential* returns), suggest what to invest in and you are all set. If you do not have at least $50 when Tuesday rolls around, it just skips that week. If you do, it invests it in the stocks listed in your plan.
No fees to worry about. As I get more confident, I might decided upgrade to a better plan.
@WiglyWorm: There is lots of good information about investing, but try the original internet: the library. Recommended Reads: The Four Pillars of Investing, A Random Walk Down Wall Street, and anything by Jack Bogle.
I think we are just seeing a bear market rally. The real armageddon will happen when we rally back to 10-11k on the Dow. Then I'm in cash and short etfs all the way down to 5500. I went long last week and I've been rewarded short term; however, I really recommend against averaging down in this kind of volatile market (at least with non-retirement funds). Why throw good money after bad? I think it is so much better to buy and sell into momentum than to try to time tops and bottoms for individual stocks.
@WiglyWorm: I had started a few investments in the last few years that were based on Vanguard index funds, which are large, diversified funds representing hundreds of companies each. Instead of being subject to the volatility of any given company, you get a sample of the growth/losses of many companies at once to average out your risk. These funds have a minimum buy in of $3000 each, so maybe that is what they were referring to?
People need to stop buying stock. Things are only going to get worse and no matter how tempting a stock price might be, the way things are going it will only tumble down.
Buy GOLD people. Gold is the universal stock and it goes up more times than down.
People just never learn. Stock is worthless just as our dollar is, supported by nothing but good faith and nice feelings.
@laserjobs: You are right that they may drop 50% more. Also, they might stay down for more than "2 to 3 years." People should read about Japan's "lost decade."
"Immediately after the 1929 crash the spectators rushed in to buy 'bargains' but were badly mistaken because the market kept going down and down even tho' industrial leaders kept on assuring the people that everything was fine and the worst was over."
Maybe I'm just overly cautious, but the stock market is entirely too volatile for me right now and I'd rather be safe than potentially dump more money into the flaming pit that is the US stock market.
The only thing I've ever done right financially was last January when I moved everything in my 401K into cash. My coworkers still glare at me when the subject of 401K's come up in the lunchroom.
@kwsventures: you are correct sir. Automatic payroll deductions right into my sharebuilder account every two weeks. I don't even look at it. Also maxing out my 401k. If you are under 30, you won't feel the pain as much, but you will reap the benefits, especially twenty or thirty years down the road when you're ready for early retirement.
@howie_in_az: Unfortunately everyone is invested in sheets of paper given out by some government. You lose if you play, you lose if you don't.
@howie_in_az: What's worse is the day-by-day changing the rules that are occurring as we speak. How can any rational long positions be made and kept in this environment?
@cordeliapotter: Hell no. I'm 57 and I own no bonds at all. On the other hand, unlike most people I pay attention to what my money is doing.
@dohtem: I second Sharebuilder.com. I started off with $100. If you use the automatic investment option, it will setup automatic withdrawls on a time table you setup, and invest it in whatever stocks it has available for $4. All the auto investments happen on Tuesdays (I guess that's why it's cheap?).
@LoganAdams: $3000, up $900!
I also like watching the little dollars go into the 401k where they buy mad shares of mutual funds because the market's so low. Go forth and have money sex, little dollars! You have 30 years to multiply!
@howie_in_az: "but the stock market is entirely too volatile for me right now and I'd rather be safe than potentially dump more money into the flaming pit that is the US stock market."
Well, I wouldn't go dumping in my life savings in a market this volatile. But the best time to buy is when blood's running in the streets -- if you can afford to ride out the volatility.
Also, in 1929, little information on these companies was available to small investors. Today, investors have a great deal of information available, and can do a better job making smart choices about which companies will survive and which are going toes-up. (A *better* job, not a perfect job. Ergo the not dumping of the life savings.)
@Landru: may i ask...how did you do that? i am not sure i saw that as in option in my 401K stuff. i am 28 - i know that now would be a good time to make a switch, but i am not sure how. advice?
@WiglyWorm: I am very happy with a Fidelity account, which has access to tons of no-load funds and pretty good research, etc. Can also buy individual stocks, of course. I've found it very user-friendly. There is a minimum to open the account, but it isn't high. (And then there's a minimum for purchases in some funds, but that's true of many funds.)
I learned primarily from reading newspapers and from my dad. If you start buying individual stocks, common advice for newbies is to buy stocks from companies you know in industries you basically understand. If you're an electronics buff and you LOVE stuff from Company X, do a little research on Company X and you'll often find it's a good buy. And then when you notice Company X's products suddenly suck, that's usually a hint to sell. :)
I've put $2,100 in so far and I'm already up $150. I luvs this market.