Learning the market.?
Question:
My question here is this. I am about to open an account with Scottrade with $500 initial. What are some stocks I should look into. I definatley want to go with the Vanguard funds as well.
Any tips or advice for a beginner?
Answer:
Go with your gut and stick to the long term. Stocks will rise and fall. As long as you understand buy low sell high.
Um, make sure the stock that's low isn't going to go lower and stay low. The company may be in a bit of instability and the outlook isn't good. New companies who drop for a day or weekly average look good. Buy then and wait it out for a few months or years.
Good luck.
Trading stocks can be very expensive because of the temptation to sell when they dip. The same can go for a fund. Your best bet is to do some research on mutual funds and then buy and hold. You are in this for the long run.
You thinking positively
You should look at an index fund and Vanguard has the S&P Index fund which is a good investment to start with.
Look i've been in it since 1995. I've seen ups and downs. Stocks and the market in general is volatile. Once you put on a trade it has a 50% chance of going up or down..it's random. You need an "edge", something that statistically over a series of trades that will give you a positive expectation. This is one thing. Another is money management and setting loss points and win points. How low will you stand being with yr stock of choice while you see your money evaporate? Set that marker. The other is the opposite..how much is enough? (keep in mind that probability-wise no one trade will make you rich beyond your wildest dreams) point 2: keep greed and fear under control.
The other is that 500 bucks gives you "short" pockets so to speak to withstand losses. A minimum would be 2000...divided 1 k to 2 stock pics.chosen for some reason..TA or fundamentals, something that you've seen work in past, and that you tried on paper and is working.
I am sorry to be a pain. I do not mean to dissuade. I wish someone had told me this when I got started. Best of luck and good trading.
Here is some good info about this.Hope it helps
Start with funds. Build up a cushion before you start getting into stocks. With such a small amount of money, index funds are a bad idea. You are beholden to a specific sector of the market. You may want to look for a single, broadly diversified fund that gives you international exposure. TEPLX (Templeton Growth) comes to mind, but there are many others. With only $500 to start, you won't meet the minimums to buy 4 or 5 different funds.
The key here is to get that money in the market soon. Bernanke is a Republican and the only thing I can guarantee he'll do is give the market one good jolt before the mid-term elections.
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