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| *Ostroff, Fair and Company>>>Investing |
What stock would be a good beginner stock to by? |
I'm young and would love to try the stock market. What stocks should I buy and where can I find out more information?? First, never buy on stock tips. If anyone suggests a stock to you, ignore them. If you want to buy individual stocks, you need to learn ALOT. If you have money that you can afford to invest now (which means that you won't need it for at LEAST 3 years) I would put it in an S&P 500 index fund like Vanguard's VFINX or you could buy the exchange traded fund SPY, which works like a mutual fund but trades like a stock. With these investments you get a small part of the 500 largest companies in the stock market, and this is a decent place to put your money while you learn more. They are NOT risk-free. Before you invest in any single stock, you need to understand the risk. Try to imagine how you would feel if, the day after you buy your stock, it looses 75% of it's value. In other words, you buy $1000 worth of company X and eagerly check your balance 24 hours later, only to see that your investment is now worth $250. If you can't stand the thought of something like that, then you probably aren't ready for individual stocks because this WILL happen sooner or later. The panicky investor sells at this point, not realizing that the smart investors might be buying more and misses a 300% gain. Most investors wind up buying high and selling low because they let their emotions make their investing decisions. To invest in individual stocks, first you need to read. I recommend reading anything by the following individuals, all of whom are legendary for making great investments that eventually made them VERY wealthy: Warren Buffet Peter Lynch Benjamin Graham If you REALLY want an education, go to the Berkshire Hathaway website below and read all of Warren Buffet's letters to his shareholders. It will take HOURS but it will be worth every single minute. www.berkshirehathaway.com First you must define your investment goals. Determine why you are investing and what is your time horizon. Are you looking for quick returns or are you in it for the long term. There are a great deal of financial products at your disposal in the stock market as there are a great deal of investment strategies. Throughout your research about investing in stocks, you will encounter a lot of people telling you a lot of different things. What works for them, may not work for you. Investing your money is a very personal endeavor. You must determine your level of risk (how much risk you are willing to take). You need to determine if you want to buy and sell or hold for the long term. There are other things you have to take into consideration before you just go out and buy a stock. Never buy a stock based on another person's reccommendation. You will more than likely lose money. The best stock for you is the one that you have researched and you feel comfortable buying. http://www.financial-realities101.com/st... There are 3 things to look at when buying an individual stock: 1) Strong sales-You want to see year over year sales growth. 2) Solid earnings with low debt-Look for profits and a low debt to earnings ratio. 3) You want a good management team. This one is tough to research, but you do want solid management that knows how to run a company and have a successful background. One company that fits all of these and is a good starting stock is Quantas Services (PWR). This company helps build and re-build company infrastructures. When a company is starting out, Quantas installs computer systems and other parts of their businesses. 1) Sales has increased 20%-30% year over year and quarter over quarter. 2) They have beat estimates on their earning each quarter for the past few years. 3) Lastly, their management is sound with a lot of experience. This would be an ideal stock to get in on. It is strong and should grow another 20% by the end of this year. The market is strong right now. It is a great time to invest. Good luck in the market and happy investing!! I am with http://goldenbullpicks.com they are so user friendly and make it very easy to make money! One that's going up. Install stockscouter on your Internet Explorer browser. You can "screen" stocks, and see how the software grades them. I am lazy, so I just buy mutual funds with the words "small cap value" in them. http://moneycentral.msn.com/investor/sto... |
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