Novice trader needing advice

[lil JJ]

I'm looking for long term stocks to invest in. I need advice on what stocks to pick and how to go about investing and any info i can get. Thanks JJ

[bobwatford123]

I'm looking for long term stocks to invest in. I need advice on what stocks to pick and how to go about investing and any info i can get. Thanks JJ

Why don't you start by reading Jim Cramer's book. It is an interesting read, and may provide some tips. You need to spend some time reading as I don't think you just want some tips from this board.
Or, if you do, put a boatload of money into Bennett Environmental and Resin Systems.......NOW.....lol.

[lil JJ]

Thanks i'm gonna do a lil research into the companies you mentioned. Are u invested in these companies and obviously u must have a tip that they are going to do good? THANKS again and if u have any other info please send.

[bobwatford123]

Yes I am heavily invested in those companies. They are Canadian companies though, and could be a little risky, but will likely pay off very well. I'm not sure I would recommend them to somebody just starting out. Bennett (BEL on Amex) should at least double this year. Resin Systems has a webcast on Wednesday and supposedly they have some good things happening. But, I was kind of joking when I said put a boatload of money into them (just trying to counter my original comment). Great investments for me, but I'm not sure I would recommend them. Kind of weird, but that's just me.....

[Mad Girl Investor]

Dont just take any advice from strangers on a specific stock.

Take classes in stock market info, read books, websites, learn how to research a stock. Watch investment shows....dont rush into anything and you will do well.

Good luck.

[madcowdisease]

I'm looking for long term stocks to invest in. I need advice on what stocks to pick and how to go about investing and any info i can get. Thanks JJ

Jeez, I understand you are probably new and given you stumbled upon this forum, Cramer is most likely responsible for getting you interested in investing. That's good, the interest that is, but there is a caveat. Do not just go out and get invested. Educate yourself far beyond what Cramer tells you.

For example, I have had a DRIP since I was 15 years old. It was started by my grandfather using roughly $2,500 that was left to me by my greatgrandparents upon their death when I was ~3 years old. The same amount of money was left to all the greatgrandkids in a savings account for us to take a trip to Europe when we each graduated HS. Well, my grandfather felt it could be better utilized by investing it. DRIPs are fairly safe, but they are also boring as hell and slow growth in most cases. Mine is with P&G. At first I didn't give a damn. But with a little encouragment, active participation, and most importantly quarterly statements that allowed me to "see" it growing, I became very interested.

The next step was the manic investments in stocks during the 90s. Everyone I knew, my folks, and friends parents were maxing out 401Ks and investing hand over fist. The frenzy was enough to get anyone excited. Sadly, I was too young to do anything about it.

The next step in my prgression was discovering Cramer in 2002-03. I listened to him when I drove home from my summer job, his acumen was great, but unfortunately (or luckily depending how you look at it) I was still in college and had no spare money to invest on a whim. I've listened to him ever since, sometimes everyday, other times sporadically. It wasn't until last summer I was in a position to get started in the market.

What I'm getting at is I have an extensive history of familiarity, observance, and learning how the markets work. I didn't just watch Mad Money for a few weeks and ask someone to help me pick some stocks to buy. I'm not saying I'm perfect or even my way is the right way, but what I am saying is it is much more complicated than coming on a forum that has been around for a few months and getting winning picks.

You need to read as much as you can. This is where I had an advantage. Being a naturally good test taker I never studied much in college. What I did do my last year in school was live at the library on the internet reading everything I could about stocks and their behavior. It doesn't hurt I studied Econ (though now I wish it was Finance) and could bounce my sentiments off my professors whom all have 20+ years of study in that discipline. Furthermore, upon graduation I resorted more toward books while I searched for employment since internet access was now coming out of my pocket.

If you've read this much I hope you've come to the conclusion you need to learn everything you can about stocks. Dont' just rush in. Id recommend buying Cramer's books. Confession and Real Money are the only two of his you'll need. Look in to a used Macroeconomics text book on Amazon if you dont' have a background in this. And, depending upon how much you know about investing and the idiosyncrasies of equities I'd look at getting a used set of Financial Planning Series books. They change from time to time so the old ones should be resonably priced.

If you take the time, most likely a year, to learn eveything you can then I have no doubt eventually you will be able to beat the pros. I did well for a rookie, but there are things that I am still learning. For example, I had huge gains in my portfolio, unrealized of course, at the end of September. I knew damn well it was attributed to mutual funds marking up hot stocks for future investors so they can say they were in the best stocks. But, after the end of the season for the mutuals they sold off all the stocks I was still holding on to and I went down in flames. Well, I learned my lesson, got back in black and sure as sh!t wont let that happen next year.

So you can see it is a learning process. There is no easy way. I understand Cramer gets yu excited. He makes it sound easy. But it's not. If you don't have the time to do the above, give your money to a mutual fund. If your passionate about running your own money then do the above and you will be fine. Until then I dont' advise you to ask strangers on a board what picks they think you should buy. Until you know why you are investing in a company, what exogenous factors could affect it, and how it reacts to economic cycles, what catalysts are or are not ahead, and much more, don't get involved. Take your time, be smart, and you'll be fine. Rush in and you'll get burned.

But if you choose to throw money at a stock I recommend SU and LABL right now. ;)

[bobwatford123]

Why don't you start by reading Jim Cramer's book. It is an interesting read, and may provide some tips. You need to spend some time reading as I don't think you just want some tips from this board.
Or, if you do, put a boatload of money into Bennett Environmental and Resin Systems.......NOW.....lol.

I certainly hope you took my advice.....Bennett was up 3 cents today, and Resin was up 7 cents. Stick with me....I will make you a millionaire....lol.

[optimus25]

Read "The Intelligent Investor" if you want a good foundation on fundamental investing.

Experience is the best teacher. So I would suggest you practice your investment ideas on www.clearstation.com

I've had an account since 1999 and learned a lot of different technical skills on that site.

[lil JJ]

Thanks for the advice madcowdisease I have been investing in my mutual funds for some years now. I've just came about some extra money and was wanting to invest before it burns a hole in my pocket. I've been doing research and I'm not wanting to get rich off this i'm looking to invest now and hold for long term. One i was thinking about investing is Honda or Coca cola. Big companies that i know i'm not going to lose money. What do u think?

[madcowdisease]

Thanks for the advice madcowdisease I have been investing in my mutual funds for some years now. I've just came about some extra money and was wanting to invest before it burns a hole in my pocket. I've been doing research and I'm not wanting to get rich off this i'm looking to invest now and hold for long term. One i was thinking about investing is Honda or Coca cola. Big companies that i know i'm not going to lose money. What do u think?

Of the two? Honda. If you really are looking to do the buy and hold thing I'd seriously consider looking in to a DRIP. Most of the big name companies that you seem to be screening for offer them. The nice thing is you don't have to buy round lots of shares. You can invest $1500, for example, and get 22.981 shares, hypothetically. Then when the dividends are reinvested you'll get fractions of a share and so on. But you can see how it grows.

Congrats on looking forward and not being like the rest of our myopic population by blowing the money you've come in to on some material possession. That's kind of my credo; sacrafice now so I can have later. You'll reep the dividends of your investments in the future.

[optimus25]

Not to mention good ol' G Dub helping the investor class by taxing dividends at 15%. Thnx G Dub.

More power to ya if you do DRIPs. Think solid companies though w/ decent dividend yield.

[madcowdisease]

Not to mention good ol' G Dub helping the investor class by taxing dividends at 15%. Thnx G Dub.

More power to ya if you do DRIPs. Think solid companies though w/ decent dividend yield.

Sure beats the 40% it was taxed at.

[Bman409]

From my website, www.swingtradercentral.com (educational area)


I frequently get email from market watchers who would like to swing trade but for a variety of reasons they don`t feel they have enough capital to make it worth their time. My reply to these emails is always the same: Anyone with as little as $2000 can successfully swing trade using our system, IF THEY KNOW A FEW IMPORTANT TRICKS.

The single biggest challenge to those wishing to trade with a small amount of capital is the commission prices charged by most online brokers. Many of the so-called "discount brokers" charge commission of approximately $20 for limit order trades. This kind of a commission results in a $40 fee for a "round trip" trade (buying and selling). That sort of trade can substantially eat into profits if you`re trading with a small amount of capital. Fortunately, however, there is a much cheaper option available for the small trader.

In past newsletter I`ve written about Interactive Brokers. Interactive Brokers (IB) charges a commission of 1 cent per share. That adds up to a fee of $1.00 for 100 shares, $2.00 for 200 shares, etc. I have used the service for over a year and I have had almost no problems with the service. In fact, in my experience, IB was much more reliable than Etrade even though they charged only a fraction of the commission that Etrade charges. With typical commissions of $1 to $3, I would strongly suggest opening an account at IB for anyone wishing to swing trade with a small amount of capital. I believe the minimum amount to open an account is $2000.

In addition to the issue of commissions, small traders face a number of other obstacles as well. In 2002, the SEC passed a rule commonly referred to as the Pattern Daytrader rule. The Pattern Daytrader rule states that anyone who makes more than 3 daytrades (defined as buying and selling the same stock on the same day) in a week is a "Pattern Daytrader". Pattern Daytraders must maintain at MINIMUM of $25,000 in their trading account. This is clearly a problem for the small trader.

While most of our trades are NOT daytrades (buying and selling on the same day), occasionally, we will get stopped out of a position on the same day as we entered the trade. For small traders who are worried about the daytrading rules, I offer the following advice: Enter trades near the CLOSE of trading, just before 4 pm EST. That way, you can sell the stock in the morning if you need to (if the trade starts going against you) and it won`t be considered a daytrade.

Armed with cheap commissions and some tactics for handling the daytrading rules there is no reason why the small trader can`t compete in the swingtrading arena.

[bobwatford123]

Is there a minimum, or could you buy 10 shares of Google for 10 cents?
Either way I wish I was in the U.S. Etrade is by far the best fee wise in Canada now, but it doesnt compare to those fees

[Bman409]

Is there a minimum, or could you buy 10 shares of Google for 10 cents?
Either way I wish I was in the U.S. Etrade is by far the best fee wise in Canada now, but it doesnt compare to those fees


I believe there is a minimum fee of $1.00, per trade.. even if you were to buy 5 shares of Google (for example)

Here's the fees

http://www.interactivebrokers.com/en/accounts/fees/commission.php?ib_entity=llc


Also, I believe you can use interactivebrokers.com in Canada

see here

http://www.interactivebrokers.ca/en/main.php

[glock35ipsc]

Is there a minimum, or could you buy 10 shares of Google for 10 cents?

10 shares of Google would cost you about $3648.00 US as of today, plus commissions.

[roehrigs01]

with IB, don't they charge you at least $10 a month in commisions? Also, can you place orders thru the site or you have to use the TWS plugin stuff?

[bobwatford123]

10 shares of Google would cost you about $3648.00 US as of today, plus commissions.

really glock, you mean I couldn't buy them for 10 cents total?.....lol

[bobwatford123]

Yeah I looked at IB, and it doesn't appear to be just an web broker, it seems like it's much more complicated for somebody who isn't trading too often.

[roehrigs01]

email I got back from IB tonight to answer my questions...

"You may consdier to use our webtrader which is an HTML based trading screen for use behind a firewall. Web Trader offers fewer functions than the TWS. You don't need to install any software in order to use it. Please go to our website, under Software > Web Trader section for information.

We charge $10 monthly commissions monthly is still applied per account basis. If commissions and / or market data fees are over $10, the monthly minimum would not be charged"

[Bman409]

email I got back from IB tonight to answer my questions...

"You may consdier to use our webtrader which is an HTML based trading screen for use behind a firewall. Web Trader offers fewer functions than the TWS. You don't need to install any software in order to use it. Please go to our website, under Software > Web Trader section for information.

We charge $10 monthly commissions monthly is still applied per account basis. If commissions and / or market data fees are over $10, the monthly minimum would not be charged"


Thanks. That's good info


Like I said, I've used them for years and I speak very highly of them

One other thing that I like is that I can trade stocks on the Toronto Exchange.

Lots of great Canadian commodity stocks on there.

Bman

[Mad Money Machine]

Have a look at this portfolio (http://madmoneymachine.com/portfolios/)of Exchange Traded Funds (ETFs). As you can see, they've done pretty well these past 2 months, are broadly diversified, and are cheap to buy and to own.

If you don't like ETFs, here's a corresponding set of mutual funds (http://madmoneymachine.com/2006/01/27/mmm-007-the-free-lunch/)that would do the job just as well.

Happy Investing!

Paul

[lil JJ]

I have 10,ooo dollars and i'm wanting to invest in a couple different stocks. I'm not very experienced with the market, so i'm wanting to buy and hold for awhile. Does anybody have advice on some long term stocks?

[lil JJ]

I'm looking for long term stocks to invest in. I need advice on what stocks to pick and how to go about investing and any info i can get. Thanks JJ b oooooooooya

[bobwatford123]

b oooooooooya

Do some research and invest in some dicey companies. I own Bennett Environmental. It keeps going up. I think they may be acquired by Clean Harbors.......BUT NEVER BUY A COMPANY BASED ON TAKEOVER SPECULATION....according to Jim.

[lil JJ]

Thanks for the advice all info is much appreciated.

[optimus25]

10,000 is a good start for a trading account. My advice is to take advantage of your opportunities. If you want to go long on stocks open a Roth IRA if you are eligible.

Income and capital gains are tax free.

You can make a $4000 contribution for 2005 up until April 17th 2006 and $4000 for 2006. That will allow you to have $8000 in a tax free account. Since the money is contributed after tax you have access to your $8000 principal at anytime. The only thing you can't touch is the gains.

Anyways, stick to mutual funds or ETF's like QQQQ, SPY, or MDY.

If you want to do stocks, take a look at financials, BAC, WM, C etc. Big companies with great dividend yields.

And remember to take advantage of any 401K's you employer sponsors as there may be matching contributions.

[moneyman]

If you are looking for something solid to put $ it look at BMY. It has a 4.9% yield. Unfortunately Crammer mentioned it on the show the other day and it got a $2 bounce to $26. Look for it around $22 or $23 and it could be a good cornerstone to your portfolio. Good luck.

[lil JJ]

I have already been investing in ira. I didnt know i could invest 4ooo dollars a year in ira

[optimus25]

I have already been investing in ira. I didnt know i could invest 4ooo dollars a year in ira

You can contribute up to $4000 in 2005, 2006, & 2007, but only if you have taxable income.

What type of IRA? Traditional or Roth?

[lil JJ]

I got both a taditional ira and roth, i was young when i started and my broker started me with a traditional ira and then i started another roth ira because i wasn't seeing any results from the first one.

[optimus25]

I got both a taditional ira and roth, i was young when i started and my broker started me with a traditional ira and then i started another roth ira because i wasn't seeing any results from the first one.

You know that you can transfer those IRA's into an online brokerage company and invest it yourself vs. going w/ a broker. Etrade and TD Ameritrade both offer great research resources. I've been investing my Roth IRA money in the stock market since I was in college, 1999-2006.

My current holdings:
40% in Mutual Funds - DODGX, ABALX, CWGIX, AHITX, OAKBX
50% Stocks - BAC, GILD, HPT, ELX, MSPD, VSTH, LQD
10% Cash.

[moneyman]

Your GILD is setting up for a big run.

[lil JJ]

I have about 60% of my money a roth ira hartford mutual and 40% in a traditonal ira american mutual funds. I don't know if these are good funds are not. Now I'm looking into putting some money in stocks, but i dont where to invest and if i should inveast myself like you said an online company instead of my broker.

[MoMoney4Me]

For a secure long term portfolio of ETF's try this. if you'd put your money in these on Jan.1 this year, you'd have been up a bit over 10% already this year. Not shabby if you like to sleep at night and make money at the same time!!

Stocks
IVV ISHARES TR S&P 500 INDEX 15.00%
IWD ISHARES TR RUSSELL1000 VALUE 30.00%
IWM ISHARES TR RUSSELL 2000 5.00%
EFA ISHARES TR MSCI EAFE INDEX 27.00%
EEM ISHARES TR MSCI EMERG MKT 13.00%

Bonds
SHY ISHARES TR 1-3 YR TRS BOND 5.00%
IEF ISHARES TR 7-10 YR TRS BOND 5.00%

[MoMoney4Me]

This portfolio will give you a balanced approach to your investing for the long term. Note I said investing and not trading. What you want here is diversification and exposure to the total market in all sectors.
This gives you 50% exposure to US equities in, small and mid caps as well as large cap stocks. A 30% exposure to international equities, and 10% to bonds that include both intermediate and long term funds.
This will give you a slow and steady growth to your portfolio and produce results that will be hard to beat with individual picks.
Over the long haul ( I'm talking 10 -15 years or more ), you'll be hard pressed to beat the averages.
Everyone wants to tell you about the big gains they have in a great pick, but if they open up to you, you'll find that 9 out of 10 traders lose on more than they win on.
You can take that to the bank young man.