how large an amount do you have to invest at first, and how much in fees do you pay? Is it easy to sell them, and how many do you have to have before you try to sell them for a profit? What's the best way to start out (links please). Most mainline, established brokers will sell you stocks in "round lots" only of 100 or 1,000 shares. So if you want to buy, say, Starbucks, and it's trading at $20 per share, you need to pony up USD $2,000 or $20,000, depending on broker minimums.
Commissions are either flat fees per trade or a % of your order (lower % if you invest more) or both.
I understand recently that online brokers will offer 1 share of a company or even (I've heard) a fractional share of a firm. I'm not sure why - I'm guessing the fees are sizable, and large fees will eat into your returns. Check them out if you want - TD Ameritrade, etc - you won't have any trouble finding them. They'll be more than happy to take your money
But I by and large agree with the other posters who say that small investors shouldn't buy individual shares of stocks. It's impossible to properly diversify that way, and you can easily lose all your investment.
The best bets for most people are 401k accounts or similar, or a low-cost index fund. They're the cheapest, they can help you with research, and you won't have to spend $500,000 to get the benefits of diversification.
To properly analyze stocks, you really need extensive training in financial accounting, valuation, and portfolio theory. If you're interested in these topics, take them at your local college or study for your CFA designation.
Investopedia.com, financeprofessor.com, Damodaran Online (NYU), and related sites can give you a lot of info.
Please also bear in mind that "technical" analysis and any formulaic investing "systems" have been largely discredited by both academic and industry research. So anyone who tells you about "candlesticks" or "resistance levels" or the "Elliot Wave" is probably going to lose your money.
A couple of books to read - "The Intelligent Investor," by Benjamin Graham, "The Number," by Alex Berenson, "A Random Walk Down Wall Street," by Burton Malkiel, and "Against the Gods," by Peter Bernstein are all must reads for beginning investors. A copy of "Barron's Dictionary of Financial Terms" is also a very handy reference.
I'd say if you're really interested in stocks and bonds, go into accounting or finance.
And unless you're what the SEC would call a "qualified investor" (meaning a six-figure income and/or a seven-figure net worth), I'd stick with index funds, a 401k, and comprehensive insurance for disability, death, catastrophes, etc. (This is what I do, personally, for my family.) Please stay out of the stock market if you don't have the intuitiveness to do the due diligence and research to educate yourself on the most basic of basic stock market knowledge.
I say this not as a mean person, but that as of a person that cares about your money. People don't just trade stocks in and out without reason... it isn't gambling. It's calculated risks and the compilation of many factors that should lead you to purchase and or sell a stock. If you don't dedicate the time to learn and do the homework necessary, the chances that you will lose some if not all your money is likely. Find a knowledgable mentor, somebody you trust to give good advice, and learn off them.
That said, there are many sites out there that will be able to get you started on the wonderful world of investing. It is very rewarding and I hope you learn this and continue to learn more.
Hint: try a yahoo search on "beginning investing" "or investing" many brokers let u invest as little as u want. some have a limitation that you need to buy a minimum of Rs.1000. There is brokerage fees and taxes involved in buying and selling. if you buy and sell on the same day the brokerage is less. however the tax is more too.
You can sell you shares at any point of time. You can even sell one share so you don't have to accumulate them. the amount of profit or loss depends on your capacity.
I also agree with the 1st person who has answered this question. it has permutation and combination,
it is difficult to say a correct answer.
anyway let me try to answer - atleast it will help you 50%
1) stay invested staggerred manner (at various stages atleast 2 to 10 phases) - average the price.
similar is the pattern for selling
2) choose recession time for investing - when market/country/Global trend - is up trend - just sell the share and keep it in Bank deposit.
3) otherwise choose the stock which give you regular return (say divident)
4) Be pessimistic when others are greedy (that is called bull run) -- be optimistic when others fear (during recession - bearish trend) and buy the stock.
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no one can buy at lower rate - no one can sell at the highest price.
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stock market is like Universe motion - no one can stop or revive - stock market has its own pattern of cycle. The more shares an investor or trader buys at a time, the fewer commissions and fees he/she pays.
A VERY SIMPLE EXPLANATION WITH AN EXAMPLE:
You did the research for a particular publicly traded company. It passed ALL of YOUR trading rules for that strategy. You decide to buy one [1] share of that company at $15.
Your cost for buying that stock is $15 + the fee for buying that share which is $7. Just for buying that single share. your cost: $22.
Next week or year [whenever you decide to sell it], your cost will be $22 + $7 MORE. Your cost $29.
For you to earn any money, on the sale of that one share, your stock must almost double.
SAME COMPANY: You decide to buy one hundred [100] shares. Your cost for buying that stock is $1500 + the fee for buying that share which is $7. Buying those shares, your cost: $1507.
Next week or year [whenever you decide to sell them], your cost will be $1507 + $7 MORE. Your cost $1529.
For you to earn money on that stock, the per share cost of the stock has to go up a small amount.
This is a fact of life: Win, or lose, the broker ALWAYS gets paid first.
Thanks for asking your Q! I enjoyed answering it!
VTY,
Ron Berue
Yes, that is my real last name! |
