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I am planning to invest in stocks but don't know where to start. Can anyone please help?
- JoeLv 61 decade agoFavorite Answer
It's hard to give you specific advice without knowing more about you. To best advise you, I would need to know how much you are investing, how long you are investing for, what you eventually expect to do with the money, what your "risk tolerance" is, and how old you are. Therefore I can only give you general advice.
Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. The links below have on-line questionnaires which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of investment.
You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.5%.
If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.
I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be good all-in-one stock and bond funds for an IRA. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.
If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.
I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don't work. Particularly bad are people that teach "technical analysis" systems that sound impressive, but don't work.
Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.Source(s): (all links are to non-profit groups or to Yahoo sites. None are solicitation) http://finance.yahoo.com/education/begin_investing http://finance.yahoo.com/funds/basics http://www.vanguard.com/VGApp/hnw/planningeducatio... http://sec.gov/investor/pubs/assetallocation.htm http://www.bogleheads.org/wiki/Main_Page Asset Allocation Calculators: https://personal.vanguard.com/VGApp/hnw/FundsInvQu... https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/...
- 1 decade ago
Take some of the other people's advice and read up on some simple basics. A key thing you should understand is your risk level, diversification needed, and your investment plan (ie. the amount of money you need to keep investing at what interval).
Another tip, keep in mind that if you have enough money to own 20 stocks, you are completely diversified. Ie, its the same risk as owning an index or a mutual fund...without the management fees.
A simple start though, look for several good companies that pay a respectable dividend. Make sure to buy a few, don't put all your eggs in one basket. Again, all depends on your cash amount.
- Max MLv 71 decade ago
If you're a rookie in investing or stocks, go to
Open up a portfolio without using real money. You can give yourself as much or as little money to try out the market. The stocks you want to focus on is consumer staples, consumer discretionary, and healthcare. These are DEFENSIVE stocks that will survive through good and bad times. Most of my positions are in these stocks. Some names include 3M, Procter & Gamble, Kimberly Clark, Exxon Mobil, Walmart, Costco. Everybody's got to eat and wipe their butts regardless of the state of economy. Many of these companies survived through the Great Depression.
That's the benefits. You can sleep at night knowing your money is doing well. There are NO guarantees that you won't lose money. It's just that these stocks are the best. They pay good dividends too.
Then once you're comfortable and test the waters of the market, you can finally put some real money in. Go to Scottrade.com. They're excellent for beginners.
If you're new to stocks, DON'T DAY TRADE. You'll a rookie in a world of professionals. I tried day-trading with Citigroup and AIG when they were a little bit over $1. I had some luck at first, making about $30 a day but I was way over my head. My luck didn't last long and I had to rethink my strategy.
Day trading involves A LOT of commissions to the broker. With all the commissions deducted from each trade, you'll be lucky if you only lose half your money.
I would just day trade using Yahoo! Finance. Open a stimulation account, give yourself $100 worth of fake money and play it in the stimulation format. You'll see what I mean by losing money every easily.
- Anonymous5 years ago
Despite their volatility, trading penny stocks can be extremely lucrative. Here are three ways that you can profit from investing in penny stocks https://tr.im/3LaQM
The good news about penny stocks is that you can buy a good amount of shares without going broke. It’s thus easier to get a good stake in a company for less than you would pay for stock of a larger organization. To find a company that you feel confident investing in, make sure to do your research. Don’t just choose a company because you saw an article about it, or because your friend is investing in it.
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- Anonymous5 years ago
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor by John C. Bogle . . Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies ) by Jeremy J. Siegel These books are on sale for August 28th, They are new editions of the authors' previous Very good books These two books will give you a history of the stock market and successfull strategies for investors. Jim Cramer"s book is for very experienced investors. the books you have on your list are good the two I mention are for beginners and give you very thorough course in investing. I read the original books in the 90's and they were what I reread when I needed to refresh my investment knowledge. Remember what you said "Long Term Investing " Good luck
- Anonymous1 decade ago
Start by doing some reading and decide what sort of stock investor you want to be. For instance I am a value investor which suggests that I invest for the longer term whereas others who prefer short term buying and selling are called stock traders. Check out the source below which will give you a good introduction as a beginning investor.
- Anonymous1 decade ago
Before you start investing, spend some time and maybe money and educate yourself. If you are going to do the investing yourself, you will need an account with a brokerage house. There are several good ones that are accessible from your own computer.
Another way to get some education is to sign up with a brokerage house and study their education section. Most have them. optionsXpress has a good education section and you can get a free account with them. They also have a very good paper trading (Virtual Trading) engine. This is not an endorsement for them, it is just that I have an account with them.
- Anonymous1 decade ago
I see that you are beginner and do not know much about the stockmarket. So I would like to suggest you a trading platform called gnutrade where you can actually start learning all about stock market while trading with play money. The trading platform is specifically designed for newbies. The Learning Center will help you at every mode ...
All the best..hope it will be useful to youSource(s): self experience
- 5 years ago
In binary options you will have the possibility to predict the movement of various assets such as stocks, currency pairs, commodities and indices. Learn how you can make money trading binary options https://tr.im/1R4Jc
An option has only two outcomes (hence the name “binary” options). This is because the value of an asset can only go up or down during a given time frame. Your task will be to predict if the value of an asset with either go up or down during a certain amount of time.
- The Old GuyLv 61 decade ago
Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.
Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.
Here is some reading material that can get you started in the right direction,
The first book you should read is Rich Dad Poor Dad by Robert Kiyosaki
Then try some of these
What Works on Wall Street by James O'Shaunessey
Beating the Street by Peter Lynch
One Up on Wall Street by Peter Lynch
The Warren Buffett Way by Robert Hagstrom
Trading For a Living by Alexander Elder
Mastering the Trade” by John Caster
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Disciplined Trader by Mark Douglas
While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why. This site has some basic information for beginners. If any site offers free information, take it.
Other website that can provide instructions and help with procedures and terminology are
Visit some of the more professional websites like Zacks - http://www.zacks.com/
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.
Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses. Try to get some fee information from the stocks exchanges they all have (had) free booklets, SIAC and some of the regulators (FINRA SEC MSRB CBOE) may provide some free literature.
You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest.
Good luck on your journeySource(s): from the street