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Thread: stock market, doing it well

  1. #1
    poet and narcisist argonauta's Avatar
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    stock market, doing it well

    Ok, here's the thing. I want to start thinking about investing in the stock market. The problem is I have no idea about it.

    Second of all, I'm not a US citizen nor resident, can this keep me from investing in US companies?

    Are there any resources that can teach me how to intelligently start investing money in this market? how much do I need, how do I do it (specially via internet)? Any experiences?

    Or, better yet, what do you guys do with your money (i'm not talking about spending it in beer and stripclubs, but investments)? I don't want to earn quick money, but start learning about investing...specially because I still don't have too much money to invest

    Anyway, any tips are appreciated.
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  2. #2
    He has risen! lefteyewilly's Avatar
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    There are no restrictions on foriegn investing in American companies. A good resource to start with is www.fool.com. Yes it's a wierd domain name, but it explains things in an easy to read format.

    I could go in amazing depths here, but stocks are so hard to judge, you really just have to do your research, and don't overinvest if you don't have money. You may want to start with bonds.

  3. #3
    poet and narcisist argonauta's Avatar
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    well, how much money would be considered a good amount to start investing?
    I mean, I have 15 bucks in singles right now, but i guess that's not going to buy me stock in google
    my blog: blog.innocuo
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  4. #4
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    Mutual funds are a good way to start investing when you don't have a ton of money - essentially you buy shares of a fund that consists of many similar (usually) companies, and then offers a share of the total to individual investors at a reasonable price.

    A good example would be an energy or oil fund (my current favorite, for various reasons) - it may consist of 50-60 oil companies. Something like ENPIX ( http://finance.yahoo.com/q/bc?s=ENPIX&t=1y ) is 27% EXXON, 9% Chevron, 4% Conoco/Phillips, and a bunch of other, smaller petroleum copmanies. Since oil prices tend to jump during periods of high use and political instability, and oil companies make more money when prices are up, the fund has been doing well - it started at around $17/share 52 weeks ago, is at just over $28 today - a modest 65% return.



    How much money do you need to get started? Technically, you could have bought one share for $17 - but - many funds have management costs, and you tend to pay per transaction (if you buy or sell, your broker is going to take a share). I tend to do ALL of my investing via 401k (pre-tax deduction from my paycheck that goes straight into the funds I specify), which lets me invest a little at a time, lowers my tax liability per check, and the 401k management company lets me mess with it without fees per movement. There will be fees when I withdraw (and huge fees if you pull out before you retire), but the return in the next 40 years will make it worthwhile .

  5. #5
    Banned indivision's Avatar
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    IMO. The best way to start investing and potentially the best way over-all to invest in stocks is to buy into mutual funds. As you have probably heard, diversify, diversify, diversify. The idea being that, if one of your stocks does poorly, you have stocks in other types of business that may offset that loss with a gain. This way, you protect yourself from 'losing it all'. Mutual funds are basically a collection of stocks. So, when you buy 10 dollars of a mutual fund, that 10 dollars will be split amongst all of the stocks that are in that fund. There are a boatload of funds to choose from. They are usually put together with some kind of goal in mind. Some are more aggressive, containing more startup, risky type stocks and others are slow and steady. Generally, the longer you plan on keeping the money in the stock the more aggressive you can be. Over the long run, aggressive funds make more money, but there may be years that go way down. If you need to depend on that money to be there or if you can't psychologically handle it to see it go low, you should go with a more conservative fund.

    The key thing to know concerning funds are the costs. Most funds have a cost. That amount is taken from your investment to cover the work that the company does to maintain the stocks and do the buying and selling needed to keep the fund on track for its described goals. Really, most funds are so diverse that they are very competitive with each other in regard to performance. Cost is the killer. It may not sound like a lot, but that 1% a year they take may make a 40k difference by the time you want to take the money back out. For this reason, I recomend going with no-cost (also called no-load) funds only. The pioneer in these type of funds and the company I use is www.vanguard.com . Instead of having a team of people handle the funds, many of their funds are actually ran by computers that track stock indexes. That way, they can offer funds that cost nothing to have, so you get all (most) of the returns.

    Another thing you need to decide is when you want to take the money back out. If you are investing it for retirement you should start an IRA account. That type of account will protect the profits you make with the stocks from being taxable. Over the long haul, this is huge. The drawback is, you can't take it out until you are something like 62 1/2 years old. Technically, you can take it out sooner, but pay such a big penalty it will have been a waste. If you want to take the stocks out sooner than that for a house or something, you will want a regular account (you will have to pay taxes on the profit it made when you take the money out).

    Places can vary, but at vanguard, to start an IRA account, you need 1000-1500 to start. Most other funds they have are 3000 to start. They have a lot of educational pieces on the site that could help you understand and find a fund that suits you too. Check it out. Personally, I have an IRA account that is in a more aggressive fund (LS Growth) since the money will be there longer. The rest is in a regular account in a more conservative fund (Wellsley).

  6. #6
    PAZ nordberg's Avatar
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    those are great blocks indivision and random fool. not much to add there.
    i've done about the same thing:
    - i have always contributed up to the matching amount in my 401k.
    - kept an IRA going with no load mutual funds.
    - kept an IRA going with no load mutual funds in my wife's name.
    - kept a regular account going with a mix of international, tech stocks, index funds, and other single stocks.

    that's just traditional investing. other ways to create balance would be to grab some property or actually invest in a small business - although, i doubt any of us are anywhere near becoming venture capitialists, but it's nice to aim high!
    Last edited by nordberg; 06-09-2005 at 10:41 PM.

    Ah, these boys is all swelled up. So this was earlier...getting set to trade. Then, woooaaah differences.
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  7. #7
    He has risen! lefteyewilly's Avatar
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    WOW Guys...you really have given some good advice. It's pretty much what i was going to say, but didn't have enough energy to do so. ARGO...take note of these guys....just because they're geeks, doesn't mean they don't know how to make money through investing.
    Last edited by lefteyewilly; 06-09-2005 at 10:47 PM. Reason: Spelling problems---call me Silverx2

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