Complete Noob Investing Questions

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Twisted Metal

Anfractuous Aluminum
Jul 28, 2001
7,122
3
38
39
Long Island, NY
My best investment to date has been IBM. Bought 100 shares at $38/pc, it's now worth $180 a share plus I reinvested the dividends into the stock, so now I have 103 shares.

For $3800, I've made around $18,000. There are a few others too, but I like IBM and think it's a good company.

If I had $40k sitting in a bank, the first thing I would do is take it out and put it in a credit union. You can earn interest on it at-least this way. Take 10k and put it into a high yield, 10 year CD (You can take it out early if you have to have it, but you'll pay a huge fee and may take a loss depending on when you take it out, otherwise, leave it alone and forget about it) This would be a great retirement package to start out with. When the 10 years is up, take all that money and do it again. Reinvest it into another high yield CD. Just keep this going for the next 30/40 years and you may have doubled your money or more. It all depends on what type of CD you buy.

You could do the day trader thing too. Read. Read. Read. Listen to NPR or some other news station that has a Money Market program. Usually they tell you about upcoming IPO's. I made the mistake of not investing in ZipCar for a day trade. I could have made $11,000 in 3 days, but I didn't have the money readily available. Day trading is fun and you can make a lot of money quickly, but it's a high risk situation. You set it up so that you buy X amount of shares when the IPO launches, keep a very close eye on it. Download E-Trade or something on your smart phone and always keep an eye on that stock. Have a stock ticker on your desk, etc. When you feel it hits a good price, maybe $10 a share more than what you paid for it, sell it. You can set up an auto-sale too. For example, you can buy 1000 shares of Apple for $10 each. Auto-sell it when it reaches $15 a share, or even $20 a share. Make your money. You might kick yourself because the stock could even triple or more after you sell it, but that's the risk you take. I think as long as you really do some good research into the stock you want to buy, especially a new IPO, you will make the right choice on what to do with your money.

Groupon is coming out with their public shares. It has made a lot of buzz. Google tried to buy them for like $1 Billion last year, now they think they are worth $10 Billion or something. I don't recall the exact numbers. This would probably be a really good day trade start out. Drop $5000 on day one of the IPO release. Keep an eye on it all day. It will fluctuate, that's normal. Sell it the next day or when you feel it. So far, my gut has always been pretty damn good, and I kick myself for not going to investing school and becoming a trader. Oh well.

Google, Amazon, Apple are all good companies, but they are huge also. Huge companies like to collapse at any given time. I would say Google is probably the better choice out of the 3. Apple just lost Steve Jobs, and is losing its market share in the smart phone field and tablet. Google is taking over it with its Android OS and devices. They are about to launch their own version of "itunes" type software, which is good. Everything Google touches seems to turn to gold. Their stock is pricey though, and it wont change soon. Do a 2 or 3 year share price graph chart on them. Anything further than that is just expected honestly.

So, lets say you invest in a 10k/10year CD, you invest another 10K in a stock you have done plenty of research on. This leaves you with 20k. Maybe you drop 15k on a new BMW M3 or something cool, or even drop it on a house. You are still young, now is honestly the best time to buy a house. Make that extra payment a year and pay your house every 2 weeks. You'll have it paid off in no time and for cheap too. Then in 10-20 years you no longer have a house payment. More money for you to enjoy and travel or something fun.

No matter what you do, I would personally keep $5000 in your account. You never know what might happen and you may need some money quickly. Investing in stocks can be good, but your money is tied up for a few days, or weeks. So you'll want to keep something handy. Maybe even buy a safe for your house and keep some money in that too, just in case, but don't tell anyone except your parents or someone you can trust that wont kill you for your key or combo lol :D

And after all this, it's still a gamble. That's how stocks are. The Global economy is fucking stupid nuts right now. You have to really look into a lot of different aspects. How was the recent unemployment rate? It went down, which is good and usually stocks do better on news like this. However, you have the whole Europe debit crisis which also can effect stocks and usually makes them drop. There are just so many factors when investing yourself.

You could just give $10,000 to a stock broker and say "make me the most amount of money" and he might, or he may not. Depends on how good he is and the resources he has. Remember, the stock market trades in milliseconds. Those people have huge servers and software dedicated to making money. So don't foreget about that too. You'll just have to pay them a fee (usually a percentage of what you invest and make)

A+ post, would read again. :tup:

I wish I could just buy a house. Sure I could find a 200k'er which would be really tiny and probably in a sh*t neighborhood. More realistically a decent house on Long Island would be around 400k. Then tack on the second highest property taxes in the nation and you have an endless black hole of money drainage. My job pays nowhere near enough to fund a house right now unless I just keep saving for the next 5 years.

I certainly don't want to drop $1200 a month on an apartment. Though it would be nice getting away from my parents and living on my own, that's A LOT of money that I could be saving for a permanent residence.

What about mutual funds? Better/worse than a CD?

edit - Groupon seems to be public already and hasn't been doing well?
 
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A+ post, would read again. :tup:

I wish I could just buy a house. Sure I could find a 200k'er which would be really tiny and probably in a sh*t neighborhood. More realistically a decent house on Long Island would be around 400k. Then tack on the second highest property taxes in the nation and you have an endless black hole of money drainage. My job pays nowhere near enough to fund a house right now unless I just keep saving for the next 5 years.

I certainly don't want to drop $1200 a month on an apartment. Though it would be nice getting away from my parents and living on my own, that's A LOT of money that I could be saving for a permanent residence.

What about mutual funds? Better/worse than a CD?

edit - Groupon seems to be public already and hasn't been doing well?

yeah, I figured as much. There was a lot of hoopla around Groupon. It was a day trade thing like I said. I knew it wouldn't do good a month after it went public.

A CD, you don't lose money on. You only gain the interest. It's just a sure fire way of making money. However you won't make much unless you invest a lot. A mutual fund you can make money and lose it. It goes up and down along with the stock market. There is a chance to make some good money with a mutual fund, but you can also lose your ass on it too.

Personal preference.
 

Gambit84

New Member
Oct 17, 2004
427
0
0
Still considering this. I love driving too much to cheap out on it. :D

Except I would finance some of it. Maybe like a 30k down on a 50k car. That way I can save some money for investing and build credit towards a future house purchase.
50k on a car is a bit much when you're still saving for a house. There are other ways to build credit.
 

TWD

Cute and Cuddly
Aug 2, 2000
7,445
15
38
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Salt Lake City UT
members.lycos.co.uk
Zipcar was a fun one.

If you want to play ipo's make sure you are actually in on the ipo, and not just buying the instant it goes live. This might mean calling the company's investor relations department, and asking to get in.

You often get screwed buying an ipo at the open, especially in this environment. You end up buying the top. A popular trade lately has been to wait a week for options to trade, and then using them to short.
 
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theabyss

No One Here Gets Out Alive
Dec 3, 2005
1,669
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East Coast
I just think that far too many people are scared out of pursuing it because they're told it's too risky or complicated. It's not. Anyone can do it.

I remember back in '99 when everyone was buying stocks like crazy because it was the "cool" thing to do, and because everyone did it. Well, they learned their lesson later on when the Dot.com-bubble burst. Since my economics/stock-market-math courses in college,however, I have been interested in investing again, but now I don't have the money anymore to play around...:(
 
I think Apple is set for a huge flop soon (maybe within a few years). Android is taking their market share extremely fast, as does all Google things. Apple shares are so damn expensive though! I am curious if they plan to split their stock or not anytime soon.

I recently read that IBM is still a most excellent company to invest in. It's a slow and steady one, but it constantly outperforms projections. So, at least I'm happy about that recent news. I may even dump some more cash into it, but their stock is hovering around $190/s atm. That shit needs to split.

I heard that Facebook is about to go public, might be a good investment? I haven't looked into it myself yet.
 
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Hadmar

Queen Bitch of the Universe
Jan 29, 2001
5,556
42
48
Nerdpole
Apple turned into something that's pretty close to a religion. Of course it goes up.
 

TWD

Cute and Cuddly
Aug 2, 2000
7,445
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38
38
Salt Lake City UT
members.lycos.co.uk
Stocks like Facebook are tough for me because the familiarity comes with strong opinions that can cloud judgement. How many here pine for a more popular alternative? How many think its growth is just getting started? It makes it hard to see the situation clearly.

In instances like this I like to watch first to see how investors react to the business. I wait for the first earnings report. I can then check against my own beliefs to form a more complete picture about how the market will behave.
 

TWD

Cute and Cuddly
Aug 2, 2000
7,445
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Salt Lake City UT
members.lycos.co.uk
In the two months since I made this thread Apple shares have gone up $73.

Had I invested my 10k I'd have $2140 in just two months.

WHY DIDN'T I TAKE MY OWN ADVICE??? *CRIES*

The gains in Apple are good and solid, but look at a larger perspective. If a quick 20% gain is your goal I can accomplish that in about an hour with futures on a good day. If we are investing in stocks we have to take a longer view. I remember when Apple was almost $80. I thought I was doing good when I traded out at $120. Think of the guy that bought at $10 in 2002. If you are diligent and do your homework you'll have the chance to catch one or two of these as well. You just have to be actively engaged, and the chances are you'll catch at least part of a big mover like this in your lifetime. And one is all it takes.
 

Twisted Metal

Anfractuous Aluminum
Jul 28, 2001
7,122
3
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Long Island, NY
I think Apple is set for a huge flop soon (maybe within a few years). Android is taking their market share extremely fast, as does all Google things. Apple shares are so damn expensive though! I am curious if they plan to split their stock or not anytime soon.

I recently read that IBM is still a most excellent company to invest in. It's a slow and steady one, but it constantly outperforms projections. So, at least I'm happy about that recent news. I may even dump some more cash into it, but their stock is hovering around $190/s atm. That shit needs to split.

I heard that Facebook is about to go public, might be a good investment? I haven't looked into it myself yet.

So I bought 25 shares of Apple. Either I'm going to do reasonably well or I'm going to crash and burn and it will be a hard lesson learned. At any rate, I gained $56 on day one. :tup:

I put $15k into my tdameritrade account, and I have about $2720 left. Should I dump it into IBM? Maybe wait for Facebook?

But how is Facebook going to outperform themselves in terms of profits? Their revenue is just ads, no? It would seem to me that their stock price would even out at some point and just stay constant. Unless they have some revolutionary new products in the works...
 
Apply may be losing a 1.5 billion dollar lawsuit. Hope that doesn't affect your stock any ;) And even if it did, you should buy some more once the price drops. Apple is a juggernaut that will continue to grow. They are a huge leader in cellphones and make a lot of money off their apps.

As far as Facebook goes, I'm not even sure about that one. I really thought about it, listened to everything everyone had to say about it, and basically they will have to do some serious revenue making to make buying their stock worth a shit. Of course it will do great the first week, just like any large IPO does, but after that, I who knows what it will do. They need to rake in more revenue. One option is putting ads on the mobile version of Facebook. They do that, they are going to lose some people. I haven't seen an ad on Facebook in years, thanks to FF and some plugins.

IBM I still think is a great stock. It's a long term stock though. Not something I plan to make a fortune on over night. It's been 10 years and have made just under 20K on it.

The more aggressive stocks are Amazon, Google and Apple. The "Big 3" if you will. Amazon might be the best out of the 3. They are getting ready to launch a Netflix type service. I think it will beat out Netflix for a few reasons, the most being that they have their Kindle Fire tablet that they can stream movies to directly. Netflix is PC or Console only (now with mobile though too). However, Amazon hooked up with Viacom which means we get a lot of cool programs with this service. I don't think Netflix has that contract with Viacom. Atleast I think it was Viacom. Whoever it was, I was happy to hear that.
 

TWD

Cute and Cuddly
Aug 2, 2000
7,445
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Salt Lake City UT
members.lycos.co.uk
You should wait. Never buy all of your position in one day. This is called scaling in. Wait a while for a bad week. If you still feel good about the stock buy a bit more.

Also, never be all in. You always want to have a little cash on the sidelines to take advantage of new opportunities when they come up. If you have a really good 5% or more days take a little off the table for tomorrow.

Stocks go up and down on a daily basis, and it is difficult to consistently time things correctly. By scaling in and out you help reduce the timing risk.
 

Twisted Metal

Anfractuous Aluminum
Jul 28, 2001
7,122
3
38
39
Long Island, NY
Two weeks in and Apple shares have rose $31 from what I bought them at. I like this investing thing. :)

I'm hoping I can leave this alone for two years and gain a nice profit. At this rate I don't see why they wouldn't hit $600+ a share in that time frame.

I've been reading a lot of articles on what's hot/not but I'm very reluctant to pull the trigger on any other stock. Why push my luck when Apple is doing so well? But I still have ~35k doing nothing. :(

Amazon has been dropping a significant amount. Maybe good to jump on some of that? Jackal/others, thoughts on that?

P.S. My long term is 2 years. At that time I want all of my money back because I gotta start looking for a house. I figure a 120k down payment would be a great start.
 
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Capt.Toilet

Good news everyone!
Feb 16, 2004
5,826
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Ottawa, KS
P.S. My long term is 2 years. At that time I want all of my money back because I gotta start looking for a house. I figure a 120k down payment would be a great start.

120k down payment on a fucking house? Are you looking to buy a damn mansion or something? With that amount of money you could just pay off a decent 2 bedroom/2 bath.
 

Twisted Metal

Anfractuous Aluminum
Jul 28, 2001
7,122
3
38
39
Long Island, NY
120k down payment on a fucking house? Are you looking to buy a damn mansion or something? With that amount of money you could just pay off a decent 2 bedroom/2 bath.

I don't want to pay off a mortgage for the rest of my life with a kazillion dollars in interest. Again, if I choose to stay on Long Island, a decently sized house in a good neighborhood is 400k+. Sooooo expensive here. :(
 

Jacks:Revenge

╠╣E╚╚O
Jun 18, 2006
10,065
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somewhere; sometime?
so move.

that shit is ridiculous.
if there's nothing important that's tying you to to the area (like a wife and kids or heavily invested career) then just move.

if you have the freedom to move but don't it's like you're literally throwing some of your money away. you don't have to settle for extremely overpriced housing just because you were born somewhere that has extremely overpriced housing.
 

TWD

Cute and Cuddly
Aug 2, 2000
7,445
15
38
38
Salt Lake City UT
members.lycos.co.uk
Two weeks in and Apple shares have rose $31 from what I bought them at. I like this investing thing. :)

I'm hoping I can leave this alone for two years and gain a nice profit. At this rate I don't see why they wouldn't hit $600+ a share in that time frame.

Again buy and sell in small incriments. It should be pointed out that the stock fell 30 points between the 15th and 16th alone. If you really believe in the stock the 16th would have been a good day to buy. Similarly if you are negative on the stock and you sold everything on the 15th, you'd feel pretty stupid right now. It it's not unusual to pull back 20% before another bull run pushes higher. So again, small bits at a time. If your are bullish buy dips and sell rips. That gives you the cash to take advantage of opportunities when things pull back.