How To Get Started In The Stock Market (An Original TFP Guide) - Tilted Forum Project Discussion Community

soma · 09-09-2006, 06:09 AM

- removed by OP -

NoSoup · 09-13-2006, 10:04 PM

Quote:

Originally Posted by soma[SIZE="4"

Conclusion[/SIZE]
In the end, even with the help of this guide, I recommend against investing in the stock market. Why? As an individual investor, the odds are stacked heavily against you. This is why I urge in the beginning to never invest anything you cannot afford to lose. Start first by investing using a fantasy stock trading game before doing the real thing.

Oh, Soma, looks like you and me are gonna have some words

Perhaps we'll just have to agree to disagree here, but I highly recommend individual investing intelligently into the stock market market.

Certainly, you put a lot of good information up there, but (at least in my opinon) is not necessarily useful to the individual investor.

Perhaps I'm being overly simplistic, but unless someone is planning on either initially investing a ton of money in the market, or just has way too much time on their hands to analyze stock market trends, entry and exit strategies have little to do with individual investors.

Then again, I'm a firm believer in the Buffet method - just buy and hold, hold, hold. Sometimes the stock market will dip - other times it may skyrocket, but over the long haul, the stock market has continued a northword trend. Certainly not at incredibly fantastic rates, but an average return of 11% per year ain't bad.

At any rate, if you dedicate a few hours a year to research, I'd be willing to bet that the average investor could at least match the market, if not beat it. It certainly seems a better option than mutual funds - over 80% of them fall short of what the market earns. You'd be better off just buying Spyder shares.

Either way, thanks for the guide - it does have a lot of great info!

KungFuGuy · 09-16-2006, 09:23 PM

what are spyder shares again? my friend was telling me a little bit about them, but it became quickly apparent that he didn't really know either.

Thanks for the guide. On a related but different note, I'm reminded of this one theory where people will expend so much energy in an effort to beat out everyone, but end up remaining in the same place. I really wish i could remember more, but it came up when playboy published the stock picks of their playboy bunnies, and how many of them were beating a lot of brokers, with absolutely no science or research.

NoSoup · 09-17-2006, 02:58 AM

Spyder shares are basically stock that is in essence the S&P500. The Spyder shares (SPY) are meant to mimic nearly exactly what the Standard and Poor index does - so in simpler terms, you own the whole market...

essendoubleop · 10-14-2006, 07:05 AM

There was a website that rated stocks on a 5-star scale, and only a certain number of them could hold 5-stars at the same time. I wanna say something like Statline, but it was a really effective website.

BTW, what do you think is the best online broker?

soma · 10-14-2006, 04:19 PM

I first used ameritrade, and then transfered to scottrade because the comission was cheaper. Ameritrade had a better site, but scottrade was still a better value. I then transfered to interactive brokers and am still with them. They have really low comission, but are not nearly as big as ameritrade or scottrade. I'm now thinking of going to sogoinvest.com. Looks really good to me so far (need to do more research though ...)

essendoubleop · 10-14-2006, 04:54 PM

I'll check back with you later after you decide which is better.

soma · 10-14-2006, 08:36 PM

I had a talk with a trader friend today, and he introduced me to zecco.com. Right now, they are being overwhelmed by new applicants. Looks good though.

stevie667 · 10-15-2006, 11:10 AM

I use www.iii.co.uk to track shares in an imaginary portfolio, to see how well i would have done if i had actually purchased them. For someone who is broke like me, and other people, its a great way to wet ones beak in the market without the actual risks involved.

When i get more confidence, and cash, then i'll see how well i can really do.

AXP_Crow23 · 10-30-2006, 09:34 AM

^^nice site. In the past I used

http://vse.marketwatch.com/Game/Homepage.aspx

Also would recommend ETFs if you don't know much about the market. Personally I think they are better than mutuals because they are traded like actual stocks and the tax benefits and on and on.

Jove · 11-03-2006, 08:29 AM

I was going to buy stock shares from different companies, like Microsoft, Dell, and Apple and I was going to set up an account with eTrade, but unfortunately I have to put down $1000 just for a certain account. Does anyone have suggestions on how I could get an account through a company and buy shares?

I know soma mentioned going through a broker, but I spoke to a broker who mentioned I go through eTrade because I wanted to buy one share, not $300 worth of shares.

Yakk · 11-03-2006, 01:23 PM

Scott Adams "everything you need to know about investing":

Quote:

1. Make a will

2 .Pay off your credit cards

3. Get term life insurance if you have a family to support

4. Fund your 401k to the maximum

5. Fund your IRA to the maximum

6. Buy a house if you want to live in a house and can afford it

7. Put six months worth of expenses in a money-market account

8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement

9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio

Basically, you don't know enough to do better than the above (with any reliability), and you aren't special enough that other financial instruments are worthwile.

(Scott Adams is the author of Dilbert)

paulskinback · 11-03-2006, 05:42 PM

I'm an ex-stockbroker of 8 years

Your guide is very useful for the un-educated

If you want some advice PM me

My father trusted me with £10,000 ($17-18,000) and I gave him back £17,000 ($28,000-30,000) in the space of a year

I took a hefty personal commission higher than a normal broker, but we shared the profits in a way. That was my own analysis and advice based on fundamentals, and based on the fact that I love & respect my father.

In the guide you mentioned upward trends and support and resistance.

-----Bollinger bands are your saviour!!!

Yakk · 11-04-2006, 02:25 PM

Mate, I've done that, and I'm not a stock broker.

Of course, I've also had investments tank.

Heck, if you bought stock from 1982 to 1999, the average return/year was 16%!

And at a casino, I've managed 20% in a single day! At that rate, I could turn 1$ into 10^28 dollars in a year!

As someone without the time to spend dozens of hours/week either researching one's stock brokers, or researching stocks, you won't be able to beat the people who do spend dozens of hours/week figuring out where to put money. Well, you are able to do it -- but most of your ability to beat them will come from luck.

You aren't large enough potatoes to afford the people who can consistantly make a killing at the stock market.

But you can steal their knowledge. That is what buying index stocks is about -- the sum total of everyone's choice of stocks effectively gets rolled into the index. Following an index is cheap (because it is easy), so you aren't paying for this knowledge.

When you buy a mutual fund, you first have to research if the person selling it to you is pulling the wool over your eyes. Then you have to determine if the person selling it to you can beat the market, on average, by enough to pay for his own salary and commissions.

When I say wool, here is a trick that mutual fund companies use.

Start 50 different mutual funds with small amounts of money. Give 50 different newbie stock pickers freedom to set up a fund.

Wait 1 year. Take the top 20% of the performers over those two years, and increase the investment. Dissolve the bottom 60% of the performers.

Wait 1 year. Take the top 5, and open them up to wider investment.

What could have started with a pool of 50 randomly behaving stock picks now produces 5 "recently opened up" funds that have a 2 year damn-good stock-picking history behind them.

Now add in kickbacks and convince independant stock brokers to sell these products to investors.

Aim for 1%-over-market-returns with a bit of volatility, and claim your 2%/year in comminssions and admin fees.

...

On the other hand, Scott has spend most of his investment earning period during the historically abnormal stock upswing since 1980. So maybe the game is going to change.

Merlocke · 01-11-2008, 01:32 AM

I'll be venturing into the stock market myself soon - http://ipointclub.blogspot.com/

I'm going to blog as I go along and let you all know how things turn out. Hopefully I'll make my 2nd million on either stock or real estate. (God bless Forex)

yellowmac · 01-11-2008, 05:48 AM

About a year ago I got really interested in stocks, mostly because it was really appealing to me that I could make money by essentially sitting on my butt. So I tried to research what stocks were winning picks, and started a modest portfolio. I've come to the conclusion that for me it just isn't worth my time and energy doing the research and dealing with the anxiety of whether or not my picks are winners. I'd rather just set my investments on autopilot and invest in a low-cost boring ol' index fund that just tracks the overall stock market. It won't get sexy results, but I'm fine with that for long-term performance and peace of mind.

ticket · 01-12-2008, 11:02 AM

Quote:

Originally Posted by yellowmac

About a year ago I got really interested in stocks, mostly because it was really appealing to me that I could make money by essentially sitting on my butt. So I tried to research what stocks were winning picks, and started a modest portfolio. I've come to the conclusion that for me it just isn't worth my time and energy doing the research and dealing with the anxiety of whether or not my picks are winners. I'd rather just set my investments on autopilot and invest in a low-cost boring ol' index fund that just tracks the overall stock market. It won't get sexy results, but I'm fine with that for long-term performance and peace of mind.

I got into the market about the same time you did, and pretty much have only invested in Apple and RIMM so far. I certainly understand your comments about the anxiety, but then I try to just remember you haven't made or lost any money until you sell. I have a large number of stocks that I track while I get self-educated about how the market reacts (and overreacts) to every little tid bit of information released. With the market tanking like it has so far in 2008, there may be some very good opportunities right now to jump in and make some profits, but like someone alluded to earlier....its just gambling.

host · 01-12-2008, 11:43 AM

Quote:

Originally Posted by ticket

I got into the market about the same time you did, and pretty much have only invested in Apple and RIMM so far. I certainly understand your comments about the anxiety, but then I try to just remember you haven't made or lost any money until you sell. I have a large number of stocks that I track while I get self-educated about how the market reacts (and overreacts) to every little tid bit of information released. With the market tanking like it has so far in 2008, there may be some very good opportunities right now to jump in and make some profits, but like someone alluded to earlier....its just gambling.

I'm assuming you've passed on exiting RIMM above $135
<img src="http://chart.finance.yahoo.com/c/3m/r/rimm">

....and AAPL , above $200
<img src="http://chart.finance.yahoo.com/c/3m/a/aapl">

Why....why not take profits when they are on the table, and why the continued optimism....RIMM has fallend from $137 to $93, in less than 3 months....(If you have taken profits, you don't need to read any further...)

I had a friend who worked in an office in NYC. In 1999, he and several co-workers began to buy AOL, their paper profits doubled, tripled, quadrupled, they were all going to retire "young", together. They watched AOL peak, and they held, and held....they knew it would come back, and they held, all the way to the bottom. There are so many stories like that, about the dot com bubble. It's nearly 8 years after the Nasdaq 2000 peak, at 5148, intraday, in March, 2000. It's below 2500, again, yesterday. The Nikkei 225 index peaked above 39,000, in late 1989....it's 19 years later, it's at 14,000.

Do you allow for the fact that your window of experience is very narrow, and that it has a large influence on your optimism? Now, there is nothing fundamentally influencing stocks to even maintain their current levels. When Rimm was at $137, fundamentals didn't matter, and they hadn't in a few years. It looks like they are starting to matter.

ticket · 01-13-2008, 07:51 AM

I am aware of my narrow window of experience, and I have target prices that I am patiently waiting for. I think the down swing of both of these stocks can be attributed to the mortgage loan/credit mess, along with hundreds of other stocks, because both continue to surpass forecasts and both will continue to for awhile. I think it is still a good time to buy either.

Are you a fan of any stocks in particular right now?

09-09-2006, 06:09 AM	#1 (permalink)
soma Addict Location: USA	How To Get Started In The Stock Market (An Original TFP Guide) - removed by OP - __________________ Having Girl Problems? Last edited by soma; 01-29-2008 at 08:57 PM..

09-17-2006, 02:58 AM	#4 (permalink)
NoSoup Non-Rookie Location: Green Bay, WI	Spyder shares are basically stock that is in essence the S&P500. The Spyder shares (SPY) are meant to mimic nearly exactly what the Standard and Poor index does - so in simpler terms, you own the whole market... __________________ I have an aura of reliability and good judgement. Just in case you were wondering...

10-14-2006, 07:05 AM	#5 (permalink)
essendoubleop Psycho	There was a website that rated stocks on a 5-star scale, and only a certain number of them could hold 5-stars at the same time. I wanna say something like Statline, but it was a really effective website. BTW, what do you think is the best online broker? Last edited by essendoubleop; 10-14-2006 at 07:14 AM.. Reason: Automerged Doublepost

10-14-2006, 04:19 PM	#6 (permalink)
soma Addict Location: USA	I first used ameritrade, and then transfered to scottrade because the comission was cheaper. Ameritrade had a better site, but scottrade was still a better value. I then transfered to interactive brokers and am still with them. They have really low comission, but are not nearly as big as ameritrade or scottrade. I'm now thinking of going to sogoinvest.com. Looks really good to me so far (need to do more research though ...) __________________ Having Girl Problems?

10-14-2006, 08:36 PM	#8 (permalink)
soma Addict Location: USA	I had a talk with a trader friend today, and he introduced me to zecco.com. Right now, they are being overwhelmed by new applicants. Looks good though. __________________ Having Girl Problems?

09-16-2006, 09:23 PM	#3 (permalink)
KungFuGuy Insane	what are spyder shares again? my friend was telling me a little bit about them, but it became quickly apparent that he didn't really know either. Thanks for the guide. On a related but different note, I'm reminded of this one theory where people will expend so much energy in an effort to beat out everyone, but end up remaining in the same place. I really wish i could remember more, but it came up when playboy published the stock picks of their playboy bunnies, and how many of them were beating a lot of brokers, with absolutely no science or research.

10-14-2006, 04:54 PM	#7 (permalink)
essendoubleop Psycho	I'll check back with you later after you decide which is better.

10-15-2006, 11:10 AM	#9 (permalink)
stevie667 Too Awesome for Aardvarks Location: Angloland	I use www.iii.co.uk to track shares in an imaginary portfolio, to see how well i would have done if i had actually purchased them. For someone who is broke like me, and other people, its a great way to wet ones beak in the market without the actual risks involved. When i get more confidence, and cash, then i'll see how well i can really do. __________________ Office hours have changed. Please call during office hours for more information.

10-30-2006, 09:34 AM	#10 (permalink)
AXP_Crow23 Upright	^^nice site. In the past I used http://vse.marketwatch.com/Game/Homepage.aspx Also would recommend ETFs if you don't know much about the market. Personally I think they are better than mutuals because they are traded like actual stocks and the tax benefits and on and on.

11-03-2006, 08:29 AM	#11 (permalink)
Jove Groovy Hipster Nerd Location: Michigan	I was going to buy stock shares from different companies, like Microsoft, Dell, and Apple and I was going to set up an account with eTrade, but unfortunately I have to put down $1000 just for a certain account. Does anyone have suggestions on how I could get an account through a company and buy shares? I know soma mentioned going through a broker, but I spoke to a broker who mentioned I go through eTrade because I wanted to buy one share, not $300 worth of shares.

11-03-2006, 05:42 PM	#13 (permalink)
paulskinback Insane	I'm an ex-stockbroker of 8 years Your guide is very useful for the un-educated If you want some advice PM me My father trusted me with £10,000 ($17-18,000) and I gave him back £17,000 ($28,000-30,000) in the space of a year I took a hefty personal commission higher than a normal broker, but we shared the profits in a way. That was my own analysis and advice based on fundamentals, and based on the fact that I love & respect my father. In the guide you mentioned upward trends and support and resistance. -----Bollinger bands are your saviour!!! __________________ 'Everything that can be invented has been invented.- - 1899, Charles Duell, U.S. Office of Patents. 'There is no reason anyone would want a computer in their home.' - Ken Olson, 1977, Digital Equipment Corporation

11-04-2006, 02:25 PM	#14 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	Mate, I've done that, and I'm not a stock broker. Of course, I've also had investments tank. Heck, if you bought stock from 1982 to 1999, the average return/year was 16%! And at a casino, I've managed 20% in a single day! At that rate, I could turn 1$ into 10^28 dollars in a year! As someone without the time to spend dozens of hours/week either researching one's stock brokers, or researching stocks, you won't be able to beat the people who do spend dozens of hours/week figuring out where to put money. Well, you are able to do it -- but most of your ability to beat them will come from luck. You aren't large enough potatoes to afford the people who can consistantly make a killing at the stock market. But you can steal their knowledge. That is what buying index stocks is about -- the sum total of everyone's choice of stocks effectively gets rolled into the index. Following an index is cheap (because it is easy), so you aren't paying for this knowledge. When you buy a mutual fund, you first have to research if the person selling it to you is pulling the wool over your eyes. Then you have to determine if the person selling it to you can beat the market, on average, by enough to pay for his own salary and commissions. When I say wool, here is a trick that mutual fund companies use. Start 50 different mutual funds with small amounts of money. Give 50 different newbie stock pickers freedom to set up a fund. Wait 1 year. Take the top 20% of the performers over those two years, and increase the investment. Dissolve the bottom 60% of the performers. Wait 1 year. Take the top 5, and open them up to wider investment. What could have started with a pool of 50 randomly behaving stock picks now produces 5 "recently opened up" funds that have a 2 year damn-good stock-picking history behind them. Now add in kickbacks and convince independant stock brokers to sell these products to investors. Aim for 1%-over-market-returns with a bit of volatility, and claim your 2%/year in comminssions and admin fees. ... On the other hand, Scott has spend most of his investment earning period during the historically abnormal stock upswing since 1980. So maybe the game is going to change. __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

01-11-2008, 01:32 AM	#15 (permalink)
Merlocke Location: Canada	I'll be venturing into the stock market myself soon - http://ipointclub.blogspot.com/ I'm going to blog as I go along and let you all know how things turn out. Hopefully I'll make my 2nd million on either stock or real estate. (God bless Forex) __________________ -=[ Merlocke ]=-

01-11-2008, 05:48 AM	#16 (permalink)
yellowmac Insane Location: left coast	About a year ago I got really interested in stocks, mostly because it was really appealing to me that I could make money by essentially sitting on my butt. So I tried to research what stocks were winning picks, and started a modest portfolio. I've come to the conclusion that for me it just isn't worth my time and energy doing the research and dealing with the anxiety of whether or not my picks are winners. I'd rather just set my investments on autopilot and invest in a low-cost boring ol' index fund that just tracks the overall stock market. It won't get sexy results, but I'm fine with that for long-term performance and peace of mind.

01-13-2008, 07:51 AM	#19 (permalink)
ticket Upright Location: Texas	I am aware of my narrow window of experience, and I have target prices that I am patiently waiting for. I think the down swing of both of these stocks can be attributed to the mortgage loan/credit mess, along with hundreds of other stocks, because both continue to surpass forecasts and both will continue to for awhile. I think it is still a good time to buy either. Are you a fan of any stocks in particular right now?