Investing

[kido14]

Okay I earned a bit of money over the summer and part of the beginning of my school year working at Target and I'm 17 years old. I don't really spend my money on anything, parents pay for gas and insurance since I take my brother to and from school and I don't drive a whole lot over than that.

 

 

 

 

 

 

 

Anyways I've got about $1,500 saved up and I was wanting to invest it. I think my dad stuck like $1,000 in Cisco stock (gone up about 5 or 6 bucks a share so far :thumbsup: ). So basically I want to know a little more about investing and if there are any other ways I can invest a few hundred more dollars in something other than stock. I was thinking about trying out "day trading"(I think is the word I'm thinking of), just buying and selling it without long term investing on the stock market. I dunno, I want to have a little fun =P.

 

 

 

 

 

 

 

Anyways if you guys have any useful information or links about investing for someone who's pretty young please, do share.

[Tigra00]

I don't know much about the stock market, but if you're going to invest in any company right now, I'd say invest in Vivendi Universal.

 

 

 

 

 

 

 

Their stock went up like 25%, last I heard, probably more now, since WoW was released, and Burning Crusade is coming out in a month and a half, so it'll go up more. I personally wish I would have invested in them, but whatever. :P It went down a bit when their CEO left, but yea.

 

 

 

 

 

 

 

I would guess that Microsoft is also a safe bet, though I don't know how many shares you'd be able to get for $1,500, lol. I think I read that their stock goes up 10-12% every quarter.

 

 

 

 

 

 

 

I'd wait for BlueLancer to post...I think he knows quite a bit about it. :-s

[kelem_ryu]

I'd wait for BlueLancer to post...I think he knows quite a bit about it. :-s

 

 

 

 

 

 

 

That's what i wanted to say to. Still i'd of course say: Buy a guitar!

[xvillexvalox]

Hmmm... I heard that toys 'r us stocks are pretty predictable, maybe you should research it.

[Adam007]

I'd buy two shares of Google. :P

[mad4u689]

I'd be careful. That's a lot of real money you're talking about, and I don't think most members of tip.it off topic are very qualified to give good stock advice. I know I'm not, at least. So take what is said with a grain of salt, and remember that it is your money :D, and also consider what happens when you take a risk - sometimes you lose a lot :(

[BlueLancer]

Really nice that somebody (especially your age) made a thread like this, so I'll try to reply extensively.

 

 

 

 

 

 

 

I don't think most members of tip.it off topic are very qualified to give good stock advice.

 

 

 

 

 

 

 

Nobody is qualified to give direct stock advice, not even analysts and economists. Giving stock hints and others is another field, but I wouldn't go too far into that. Nobody who really has good information is going to spread it around to everyone. Making your own decisions based on facts about the company is obviously the best option.

 

 

 

 

 

 

 

 

Okay I earned a bit of money over the summer and part of the beginning of my school year working at Target and I'm 17 years old. I don't really spend my money on anything, parents pay for gas and insurance since I take my brother to and from school and I don't drive a whole lot over than that.

 

 

 

 

 

 

 

Anyways I've got about $1,500 saved up and I was wanting to invest it. I think my dad stuck like $1,000 in Cisco stock (gone up about 5 or 6 bucks a share so far :thumbsup: ). So basically I want to know a little more about investing and if there are any other ways I can invest a few hundred more dollars in something other than stock. I was thinking about trying out "day trading"(I think is the word I'm thinking of), just buying and selling it without long term investing on the stock market. I dunno, I want to have a little fun =P.

 

 

 

 

 

 

 

Anyways if you guys have any useful information or links about investing for someone who's pretty young please, do share.

 

 

 

 

 

 

 

Cisco is usually not a very interesting stock to buy in the Nasdaq because it's long term prospects are currently pathetic (and even the current ROI [return on investment] is under 0% which means you lose money if you bought it last year and waited)

 

 

 

 

 

 

 

I think it's great though that you're interested in investing already at age 17. It's a much better alternative than just spending cash on useless entertainment or trying to use poker for gaining profits (for the sake of being fair that is possible too, but I don't recommend it to you)

 

 

 

 

 

 

 

You said you would like to "day trade" stocks. That's basically how I get most of my income. Still, not that I want to disappoint you, it is impossible to 'daytrade' with $1,500. It's a very low amount to get a real income from. Maybe impossible is a heavy word, but in the traditional sense you wont be getting much short-term profit.

 

 

 

 

 

 

 

Daytrading basically means your laptop is tuned to 4-5 news sites, you have reliable contacts with information, and immediately after a dividend annoucement or quarterly sales announcement, you get as much of the stock as your risk level allows you to.

 

 

 

 

 

 

 

Usually you will be 'daytrading' since the market opens (in my case, I prefer high short-term profits and volatile stocks, like the NASDAQ technology stock exchange). The NASDAQ for example opens for trading every weekday at 9:30am and closes at 4.00pm after which no trades can be made.

 

 

 

 

 

 

 

Markets don't react 100% instantly, which means if you buy a soaring stock 1 minute after a positive news about the company, 60 minutes later it could be worth 10% more. Then you sell short the stock, making a handsome profit, and you can re-buy the stock when it hits a bottom when everybody else is selling it off after the news clout (also called 'shorting'), and make yet another big profit after it climbs up to it's normal level and you sell it off again.

 

 

 

 

 

 

 

Another good option, if you want real profits instead of your bank's ridiculous 3%/annum, is waiting for a new, promising stock IPO like Google. Google's stock started at about $85, now it's worth over $400 dollars. That's 400%+ return in a year with almost no risk because to most experienced investors it was common knowledge the stock would 'bubble' for an extended period.

[kelem_ryu]

How did you get into stock market? How did you get started? If you don't mind me asking. I'm pretty curious about these things.

[Anesthesia]

BlueLancer, would you care to explain about dividends? I understand the concept of buying low and selling high, and what might cause things to rise or fall in price, but I know very little about dividends. The idea I have is that they are payoffs you get from stock you have, so one could just buy loads of stock which gives dividends and then live off that? Provided one had a large amount of capital, that is.

[indy500fan]

BlueLancer, would you care to explain about dividends? I understand the concept of buying low and selling high, and what might cause things to rise or fall in price, but I know very little about dividends. The idea I have is that they are payoffs you get from stock you have, so one could just buy loads of stock which gives dividends and then live off that? Provided one had a large amount of capital, that is.

 

 

 

 

 

 

 

Dividends are usually pretty small. For example, I had $2000 invested in Nintendo right before their last dividend payment. Since the stock was $24.48 per share at the time it was a total of 81.699 shares. At $.075 per share, I received $6.13. So on $2000 I made $6.13 from the dividends. Dividends probably aren't going to be your main source of income unless you have many, many, many shares. For Nintendo, they only pay out dividends twice a year.

[Anesthesia]

That's why I said a large amount of money, as I know some people do live off dividends.

 

 

 

 

 

 

 

What I don't understand is what happens with them, when they get paid, how much gets paid, if they increase in value - basically everything except 'they pay money out regularly'.

[indy500fan]

That's why I said a large amount of money, as I know some people do live off dividends.

 

 

 

 

 

 

 

What I don't understand is what happens with them, when they get paid, how much gets paid, if they increase in value - basically everything except 'they pay money out regularly'.

 

 

 

 

 

 

 

You get paid depending on how many stocks you own. If you owned Nintendo Stock before the dividend you would get $.075 per share. So in my case it was a total of $6.13. The last one back in March was $.074 per share. That is all decided upon my the board of directors. The board also decided that they were going to be paid semi-annually in March and September.

[Anesthesia]

So do all stocks offer dividends? Or just some? If they do offer dividends, can one still buy them low and sell them high?

[indy500fan]

So do all stocks offer dividends? Or just some? If they do offer dividends, can one still buy them low and sell them high?

 

 

 

 

 

 

 

Some offer dividends, some don't. The ones that do offer them work just like the ones that don't, so you can still buy low sell high. The dividend payout is just something extra.

[darkmage099]

My dad is really good at this kind of stuff. He has the knowledge and keeps up with stocks, but he rarely applies his knowledge and buys stocks. Granted, he does have a few. Sometimes we get into these kind of conversations.

[Viktorkrum77]

My dad does all the stock market stuff for me. I got a few 100 shares in Aflac, which is like $8000 for college.

 

 

 

 

 

 

 

I'd suggest to do some research before investing in a certain company. Try to find a company that shows good results in paying off later.

[R2Keen2]

Investing is a rather tricky thing.. trading in the short term in general increases your risk and limits your profits. It is possible to do it successfully and make a living at it however you have to be willing to accept that some days you'll mess up and possibly loose a good chunk or all(if you really do something stupid).

 

 

 

 

 

 

 

My suggestion would be to do some reading on the subject especially since you don't seem familar with a lot of the terrian.

 

 

 

 

 

 

 

I recently read Jeremy Siegel's The Future for Investors : Why the Tried and the True Triumph Over the Bold and the New. It takes the long term approach though puts more value on researching induvidual stocks rather than going with funds. It also points out that dividends are slightly like a built in saftey net when prices drop. Hes views seem along the lines of what Warren Buffett used to write about and just shows that Buffet's words are still as valuble as the time he wrote them.

 

 

 

 

 

 

 

I've spent hours browsing about.com's investing information. The other thing you could do is sign up for a finance tracker like over at yahoo and pick a few stocks, practice your buying and selling to see your profit.

 

 

 

 

 

 

 

Funds are a good way to go long term, though a avid investor can usually choose stocks that will out proform them if they know what their doing.

 

 

 

 

 

 

 

As far as investing short term i'd suggest looking into a free investools seminar. The company is publicly traded and there doesn't seem to be anything on the net sayings its a scam so my guess is its a pretty reliable company. They will more than likely suggest purchasing their tool set and possibly some other things in the course of the seminar but i'd say check it out and maybe you'll get some free knowledge out of it.

[BlueLancer]

So do all stocks offer dividends? Or just some? If they do offer dividends, can one still buy them low and sell them high?

 

 

 

 

 

 

 

In principle, almost *all* companies should offer dividends at least once per year, namely to keep the investors happy. Few people are interested in long-term investments in the stock market with dividends of $0.01 per stock. Then there are 'super companies' that will pay over $1 per share, needless to say if the stock isn't expensive and you own hundreds of thousands of them, the sum you get just by dividends is astronomical.

 

 

 

 

 

 

 

when they get paid, how much gets paid, if they increase in value - basically everything except 'they pay money out regularly'

 

 

 

 

 

 

 

The executive management board of the company decides how much gets paid out, usually this is a great part of the company's yearly profits, as a thanks for the investors. They are organised by banks and all companies have a different date for paying dividends.

 

 

 

 

 

 

 

Actually, many companies will pay 2 dividends annually, an 'interim' dividend and later on, a 'final' dividend. Even that is not a formal limit, in rare cases companies may choose to pay even more regularly.

 

 

 

 

 

 

 

'If they increase in value' is an interesting question to ask, and a good one. Generally investors will always expect dividends to rise up each year. If they don't, at least by a few cents, it's usually a bad market signal and will make the stock value go down after the low dividend announcement.

 

 

 

 

 

 

 

You will need a very significant sum of money to live off dividends as it's calculated by 'per-stock' value like indy500fan correctly said.

 

 

 

 

 

 

 

Edit- didn't see this one...

 

 

 

 

 

 

 

How did you get into stock market? How did you get started? If you don't mind me asking. I'm pretty curious about these things.

 

 

 

 

 

 

 

Ah, this may sound disheartening, but it did happen largely because I did get a significant inheritance years ago from my mother's side of the family. (No, not even nearly millions, but still significant enough to start serious investing) I did start with a lot of my own money as well which I had saved up since I was a teen.

 

 

 

 

 

 

 

Might I add, at first I was obviously inexperienced and lost money in the first year of investing, after which I started to learn more about 'day trading'.

 

 

 

 

 

 

 

It just sounded like a more profitable 'career' than sitting in an office for a fixed salary. The only minus is I wont have any pension, but then again, if I live for that long I'll try to live off personal funds...

[MPM]

Might I suggest real world merchanting?

 

 

 

I do it any time I have some extra time/money, and I pull a profit almost every time.

 

 

 

 

 

 

 

Get yourself established at Ebay.

 

 

 

After that, contact local manufacturers around your area and try to get their wholesale product list.

 

 

 

Research on ebay the items on their list for sale prices, amount already there, is it actually selling, and all that other stuff.

 

 

 

After that, make the purchase from the manufacturers, and resell it.

 

 

 

 

 

 

 

It's actually quite easy, but since you have a small amount of investment money, it wil take a while to start making good money.

[R2Keen2]

Building off what Blue has said, Dividends are usually looked at as a sign of a healthy company.. when investing long term its thought of as wise to see which companys pay large dividends and have not decreased the ratio over the past few years(increasing is all the better).

 

 

 

 

 

 

 

When Buffet controlled Berkshire Hathaway the company only once paid a dividend of 10 cents but was a hugely profitible organization for its stock holders (which buffet was easily the one with the most shares). Because Buffet was so invested in the company it stands to reason that he wanted to make the most of his investments and pushed it to be one of the greatest investments a holder could buy.

 

 

 

 

 

 

 

Because most companys are not led by people like buffet the dividend acts as a sign of trust from the company to the shareholders.

[Anesthesia]

The only minus is I wont have any pension

 

 

 

 

 

 

 

You also won't need to retire if all you need to do is sit in front of a computer :P

[BlueLancer]

 

The only minus is I wont have any pension

 

 

 

 

 

 

 

You also won't need to retire if all you need to do is sit in front of a computer :P

 

 

 

 

 

 

 

Yeah, I wonder how in the movies the guys who apparently 'day trade' just sit on a harbor in the bahamas for a few minutes, click a bit here and there, admire the landscape and call it a day. :-k But yes, once you have more money you can probably cut yourself some slack like that and not be so hellbent on gaining more profits by constantly following stock values and news.

[Tigra00]

One would wonder if a 10 cent dividend on Birkshire Hathaway stocks would even give anyone, besides Warren Buffet, a reasonable amount of money. :lol:

 

 

 

 

 

 

 

I mean, the stock is what, $150,600 per share last I heard? Not too many people can have very many, you'd think!

[BlueLancer]

One would wonder if a 10 cent dividend on Birkshire Hathaway stocks would even give anyone, besides Warren Buffet, a reasonable amount of money. :lol:

 

 

 

 

 

 

 

I mean, the stock is what, $150,600 per share last I heard? Not too many people can have very many, you'd think!

 

 

 

 

 

 

 

Not quite, but the stock fluctuates between $80k-$100k in any given year, which basically means if you are very rich and buy this stock, chances are that you'll get filthy rich. Warren Buffet is a man to trust, look at his past performance and it is an exception in the investing world, it is almost a guarantee for future success.

[kido14]

Wow guys thank you very much for the responses, sorry I haven't been responding. I appreciate you guys taking the time to give me good responses. I read all of them I just don't have the time to respond to all of them, so again, thanks.

 

 

 

 

 

 

 

Might I suggest real world merchanting?

 

 

 

I do it any time I have some extra time/money, and I pull a profit almost every time.

 

 

 

 

 

 

 

Get yourself established at Ebay.

 

 

 

After that, contact local manufacturers around your area and try to get their wholesale product list.

 

 

 

Research on ebay the items on their list for sale prices, amount already there, is it actually selling, and all that other stuff.

 

 

 

After that, make the purchase from the manufacturers, and resell it.

 

 

 

 

 

 

 

It's actually quite easy, but since you have a small amount of investment money, it wil take a while to start making good money.

 

 

 

 

 

 

 

I thought about doing some ebay buying/selling but I've never really done much with ebay. I never liked the idea of the company being based on trust, but it is something I would be interested in getting in to. Even if I don't make much money I think it would still be fun.

 

 

 

 

 

 

 

A few questions about what you said.. Is there an option to see if an item actually sold and it wasn't just a fake bid? I heard about people manipulating the PS3 prices and placing fake bids to make the prices seem to be much higher than they really were. Also, how do you get the sale prices from the companies and what use is it? Well let me just try to see if I understand what you're saying. I find out how much the stores sell certain items for like say an mp3 player that they sell for $80. So what you are saying is I try to find that mp3 player on E-bay for less than that price and try to re sell for maybe a little more than $80?

 

 

 

 

 

 

 

Special thanks to R2 and blue btw. Are there any websites with good articles that I could read that are kind of like introductions or just basic information for young/beginning investors?

 

 

 

 

 

 

 

Also are most of these websites or ads on T.V that say they can make you really good investors just frauds or do (some) of them really help you? They make it seem too easy and I generally don't trust ads like that.