Stocks For Newbies
Q: I'm looking for resources about trading stocks. I'd like to understand more about it, what some of the different terminology etc. is, how to trade most importantly :), and those sorts of things. Also, if any of you currently buy and trade, which online site do you use (if you don't know a broker personally) and do you use any software for quotes aside from the online site you use. How real time are the quotes you receive, etc.
A:
Clearstation is an etrade site; nobody seems to recommend etrade
anymore...not sure why. Bear in mind that clearstation is very
oriented toward frequent, short-term trading rather than long-term
investing. You can employ any style you wish, of course, but the
screens and info and culture there are short-term oriented.
Sheldon Natenbur
book. Peter Lynch has 2 books. The Lynch approach is growth stock
oriented. The Graham style is value investing. There is no one size
fits all. Sometimes the turtle beats the rabbit, and sometimes not.
At the moment is appears that the pros are retreating from the things
that made 2003 a good year from the spring of 03 to early 04.
Think about starting with exchange trade index stocks like DIA SPY QQQ
and maybe some gold with ASA. This avoids the Enron syndrome.
I suppose your definition of a mutual fund fits. The main things mutual
funds buys one is diversification among lots of stocks and hopefully the
management will do lots of research and make some good picks. I think this
is the best choice for core investments into IRA or 401K investments. As
these investments grow, you should further diversify by spreading the amount
among multiple funds.
I haven't heard the term "enron syndrome". I would venture a guess that it
relates to an employee's tendency to invest too much of their 401K into
their company's stock. As mentioned above, diversification is very
important.
If you have income, you can open an IRA account. If your employer offers a
401K with a match and you are not using it, you are throwing this match
money away.