I'm 16 years old, and I would like to learn how to invest in stocks?
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I have no prior knowledge whatsoever about investing, stocks, compound interest, etc. Can somebody give me an overview about all this? Is it even legal for me to invest on my own? How do I go about it, and how do I determine what to invest in?
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Answer:
Congratulations on getting started. It’ll help you more than you know! Your first dollars should be spent on getting educated on investing. You don't have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it'll help you! So let's start there. You ask a very broad question, so be prepared for a pretty long answer. Just take it in chunks! How to invest depends on what you already know. We'll assume that you're beginning since you say you're a newbie! A good primer is How to Make Money in Stocks by William O'Neil. You can get it cheap just about anywhere. It’s widely available new or used. Another good one is one of Jim Cramer's books (he’s got a few). But books will only get you so far. At some point, you'll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com For free, you can start by visiting thestreet.com and investopedia.com. That'll get you a pretty good primer so at least you'll understand what the markets are and what a stock is, etc. If you get a chance, watch Mad Money on CNBC. Don't trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself. Next, subscribe to something like Investorsbusiness daily or something like that that can help you identify good stocks. Once you understand stocks, go to 888options.com. It's a website that'll help you understand options (what they do, how they work, etc). You don't need to trade them, but the more you know, the more you'll see how options can really be the safest way to invest (once you're educated). For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter I know that’s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in. As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling. You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc). Start slow, then as you figure things out, you can buy more shares. Congrats again on getting started. If you have any questions, please let me know. Hope this helps!
-:- Masha -:- at Yahoo! Answers Visit the source
Other answers
buy low, sell high. you buy when everyone else is selling and sell when everyone else wants to buy. dont be greedy. if you make a little, sell and invest in something else. this is the best game in the world. better than any **** you and your friends play. get savvy. get rich. don't work for anyone. have money making money for you. online brokers... i use scottrade. great information. $7 trades. first 3 trades are free if i refer you. if you want to make really good money. use stock picks from www.gorillatrades.com. the site looks like a joke but it is seriously one of the best online stock picking companies out there. every day there are new picks. the following two or three days, the stock will go up at least 1-2 dollars ($30-40 stocks). that means if you buy 100 shares of a $30 stock (costs you $3000) and sell it after it rises $1, you make $100. this site is unbelieveable. if you dont believe me, sign up for a free month. contact me beforehand and you can use me as a referral. same thing with scottrade. how to learn about trading...wall street journal's guide to investing. the "wall street journal's guide to..." are all good books. read them also try "rich dad poor dad". peter lynch's one up on wall street. go rent wall street and boiler room. great movies. I am adding this part because I just signed up for the cheapest discount broker online! WWW.SOGOINVEST.COM!!! $1 trades for the first 90 days $3 each trade after that! Unfortunately, no 2.5% interest like Scottrade, but WHO CARES when you are saving so much on commissions? They lack information such as analyst reports and standard broker recommendations but its SOO CHEAP you have to try it out! ....oh yea, worried about a minimum balance?? there is NONE! another added part... these people are retarded. dude, you can own stocks and you DO have a social security card. you get that at a young age. AND, at 16 you are permitted to drive. dude, some of these oldheads dont know what they are talking about.
the next warren buffet
Hey. As far as age, I only have one year on you. I started off by reading Investing for Dummies to get an elementary level understanding. On top of that, I would join online simulators (such as the one on Investopedia.com) in order to trade capital I would not otherwise have access to. Once you have the fundamentals down, you can try to determine the type of investor you are (growth, value, income, etc.) The stock market can seem impersonal and intimidating, but it is reassuring to know that nobody can predict trends in stocks with absolute certainty. As far as actually investing your money, you might have to open a custodial account under your parents name. There are many online brokers that are good (I use TDameritrade.com which I like a lot). Some have higher commisions than others, but on the same token, they might also have better research to assist you in making better buys. Good luck with everything!
Andrew D
You can probably ask your parents to open a Coverdell College Savings account at Scottrade. They charge $7 per online trade. For investing ideas, I think the best way to get started to watch what the best investors are buying - investigate the stocks, read the recent headlines. This is the idea behind http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. Here are this month's best traders: http://www.top10traders.com/Top10Standings.aspx Good luck!
Barry_Robbins_98
read, rerad, read then take a free learning quiz on morningstar.com's web site. I think some sites require your age to be 18 (etrade does just looked) but then again i'm not sure on that. But a lot require minimum deposits to invest and I recommend starting small then growing after that. Stay within your means.
zyberianwarrior
At 16 I don't think you will even get a social security card or drivers licence since you are under parental support. You cannot even open a Bank Account without these ids. If somebody inherits you some wealth then you will be allowed to handle it least only when you reach voting age that is 18 or 21or some Trust will handle it till then. So forget dreaming to be Warren Buffet or Graham and Dodd at this age. Concentrate on your studies and choose the right majors and you will be there.
Mathew C
Go to investorpedia.com to learn the various terms and styles of play. You can't own stocks under your name yet, but you should be saving that money. It will go quickly enough. The first investment advise is to have three "accounts." The first is an emergency cash account that will be 3-6 months of your annual pay. If you are living in a house or an apartment and you get fired, you will have to funds to live on till you get another job. It would also help when that appliance breaks down. The second is a "short" term investment like buying your cars and computers for "free." The third account would be the Roth IRA account for your retirement. The Roth account lets you invest where your profits aren't taxed, but the money you put into it is taxed. It also has other advantages than a 401K and regular IRA (including that the profits are tax free and you aren't restricted when you can take the money out). For compound interest go here: http://www.moneychimp.com/calculator/compound_interest_calculator.htm For strategies, look at cash flow, moat (how resilient the company is to competition) and where you think the company will be when you plan on selling. Look at ETFs with the best fall back being SPY (the SP 500), which tends to outperform the majority of active mutual fund managers over the long term. The best way to keep track of the company is to buy the products they sell. If you hate the shoes XYZ sells, chances are XYZ is not the company you want to invest in. Likewise, you can see when a company goes from making great stuff to making junk or you could have seen Apple was going to hit it big with the IPOD before the craze even started.
gregory_dittman
I am so proud of you!!!! Please talk to my teen! You will find investment clubs listed on line. Beat rule of thumb , look at what you use. Invest it that. So much is intuition.Good luck. You WILL go far.
thirsty mind
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