So I just bought my first stock

[Grundalizer]

Well I am 21 years old and after always wanting to start investing, but spending my money on beer, I decided to start investing.

I bought 5 shares of GE @ 26.65 yesterday, and I will be interested to see where they close today. Now that I am into the game, I am very tempted to buy things at the drop of a hat just because of a recommendation or an analyst rating of BUY. It is very hard to have so many companies and so little money at times. I get immediately turned off from companies with high share prices, as I feel owning 1 share of a 50-75 dollar company isn't going to help me at all. I know that 1 share of a good company is better than 10000 shares of a poor company, but it is hard to get away from that mentality.

From what I have been reading this is definitely a traders forum, and since I have no experience trading, and would probably lose all of my money, I plan to invest for the long term at the moment. I was just wondering if any of you had any memories of the very first stock you bought, how it faired, and how you continued to grow your portfolio.

Did you learn any extremely valuable lessons along the way?

Thanks for any info you are willing to share, I just wanted to share with you that I bought my first 5 shares of a company...wooo!

[Survivor]

Awesome, Nerves of steel helps. My first stock was Mircrosoft and it
dropped like a rock,but the positive side is AUY saved me.:welcome:)

[Horsefish]

What a pleasure to be the first to say HI!

The very first thing you need to do right now is add the brokers cost of your buy to the total cost of your stock buy and then devide by 5. That is your cost basis for those 5 shares. You will not have any profit until you can sell above that cost plus the cost that your broker charges for the sell order. The point is, buying 5 shares is not a really good idea. The good news is that now you are hooked. Congradulations!

The next thing you need to do is spend HOURS reading through past posts on this forum.

Third, buy and hold is a really, really bad idea at your age. Buy, take profit, buy take profit, etc is the only real way to take control of your investments.

Fourth, don't listen to me, don't listen to analysts, listen to yourself and most of the forum leaders on this site.

Oh, and fifth, consider doing your investing and or trading in a self directed IRA. That will eliminate any tax consequences. Good luck!

[Gzapper]

if you ever need my opinion..dont hesitate :beerglass: :rolleyes2:

[ZaNoob]

I'm just curious but how much commission did you pay for those 5 shares? Held long enough they might double and split, double and split... many times then maybe your grandkids will benefit. If you signed up with a free service then a bigger win for you.

Anyway, welcome to the boards. The people here are great. I am also a newbie to investing.

[Grundalizer]

Well I only had 150$ to invest this first time around, and GE is a solid company and looked like it was at a good point to buy. It closed at 28.00$ today so I was pretty happy. I use Ameritrade and I was charged a 9.99$ commision.

When I read all the threads by a lot of the major posters, they always talk about short term gains and profit and seem to know what they are doing. In my case, where I don't have a large chunk of money to invest and sell for a gain, some people tell me long term investing is the way to go.

If I get a little bit of extra money coming up here soon I might try buying and selling for a profit, but I heard that you get charged extra fee's if you don't hold your stock for a certain period of time. And If i only hold less than 10 shares in a 20-30 dollar company, it would have to go up considerably just to get above the 9.99 commision fee.

I think I need to read a bunch of posts on here and get some books to start learning how to read charts. THanks for the replies

[ZaNoob]

Since you were charged 9.99 to buy then it will cost the same to sell. This means for a round trip it will cost you 20.00 and with 5 shares then just to break even you need for each share to rise by $4. GE is a nice stock because they have global exposure and give dividends.

Since you're trading with little capital you might want to look at www.zecco.com (http://www.zecco.com) since they charge $0 for the first 10 trades each month. Look at the fine print because you need $2,500 to do the free trades or it costs you $4.95. I am not affiliated with Zecco nor do I use it. I don't use it because my money is tied up at my current broker and I only learned of Zecco from the boards here. Also it sounds too good to be true so hopefully we can hear from people who have used Zecco.

They claim membership in FINRA and SIPC. These claims check out at www.sipc.org (http://www.sipc.org) and www.finra.org (http://www.finra.org). When someone gives you important links like these make sure you type them in yourself so you don't end up in a fake or phising web site.

Good luck.

[wallstreetsedge]

congrats on your first trade...

as a future reference, you might want to check out www.zecco.com or www.mbtrading.com

[Grundalizer]

Thanks for the links, I checked them both out but don't have enough bankroll to bother switching right now.

One of my other questions I had for all of you was, If I am going to be going to college again in the fall, and I work 5 days out of the week with weekends off, is it pretty much impossible to become a "trader"?

I will not have the time to watch the live prices of a stock and getting in and out of a stock just with conditional buys/sells doesn't seem like the way to go. I actually bought my GE that way, with a low limit buy and it worked, but I plan on keeping GE for a long time.

Playing these more volatile stocks I would think is almost impossible without having access to a computer/internet all day.

Does anyone here have success at trading and also working a regular 9-5?

[wallstreetsedge]

i trade 9:30-4 everyday and do very well.. there are also a few people on this board who do as well

as for working full time and being a trader, i dont think so :p some say you need $25k to get started, i think you need $50k to get started

[mjl3434]

Ah I can relate to this post...sounds a lot like me.

My first stock was an oil sands stock SU. I bought it and it kept taking a dump so I waited for a little correction and sold it near what I bought it for. I'm glad I did because it continued to slide. I re-bought at the bottom and later made a small profit.

as for working full time and being a trader, i dont think so :p some say you need $25k to get started, i think you need $50k to get started I'd take his word on this... But he is talking about being a full time day trader. You need at least 25K so you can buy on margin and short sell (really more so you can absorb some losses and still have the full 25K requirement).

I've got only about $1K and its tough to make profits but possible. With small amounts of money the commission really eats into your profits, forcing you to have to make larger %gains before you break even. There's some thought (http://www.onlinetradersforum.com/showthread.php?t=34478) out there that we would be better off going with lower priced stocks in order to look for larger % gains. I think what is really the thing to do is remember we don't have money as an asset but we have time. Read up and increase your knowledge, paper-trade to increase your skills. Try to take the paper trading seriously. Start with a fictitious amount of money that's within your ability to accumulate, say $2500 and don't add more fake money to absorb your losses. Keep track of commissions. Write down your rationale of why you "bought" and what your plan is to "sell."

I think it's possible for guys like us to make modest profits if we are very patient and careful. There is no avoiding the risk/reward trade off, if you want to turn that ~$125 into something more useful for trading, it would have to double 7 or 8 times. The only way that would happen is if you invest in super high risk stocks. You're unlikely to be right 7 or 8 times in a row so its probably more likely that one trade would do you in and you'd lose it all.

If you are really serious about trading my advice would be to do the same thing I'm going. Spend your time and not your money. Set aside your money in an online savings account (HSBC Direct pays 3.5% currently, which is a deal with how low interest rates are). When you've got a larger sum accumulated and have done *lots* of studying then get back in.

Having played around with my $1K I've come to the conclusion that it's enough money to learn with but not enough to really get started. I think you can work a full 9-5 and still make good profits but you probably need at least $10,000 and you need to make your trades carefully. You don't need to trade during the day. You can put in limit buy/sell orders so that the buying or selling will be done when you're at work. I believe some would call this swing trading which I would define as holding for longer than a day trader but not a buy-and-hold strategy. Like an experienced friend of mine (who trades before work but works full time as well) said "Don't focus on becoming a millionaire, that will only depress you. Just focus on making sure every trade is a winning trade."

[Grundalizer]

Thanks for the nice reply mjl. I think i will stick to going to school for my chemistry degree and keep my investing and trading on the side rather than my main source of income. It is hard for me to come up with large chunks of cash at once so I guess I will just put in a little bit every month and time my buys correctly and go for the long term. Someone told me dollar cost averaging into a good company is a safe way to invest, I just need to go to the library and get some books. Again, thanks for the post.

You guys have any reccomendations for some good movies about daytrading? Wasn't boilerroom about that or something.

[mjl3434]

BTW I'm not trying to discourage you. There's a lot we can learn here and trading can be a lot of fun. So save up that money and when you're ready roll the dice!!!

[win/win]

Thanks for the nice reply mjl. I think i will stick to going to school for my chemistry degree and keep my investing and trading on the side rather than my main source of income. It is hard for me to come up with large chunks of cash at once so I guess I will just put in a little bit every month and time my buys correctly and go for the long term. Someone told me dollar cost averaging into a good company is a safe way to invest, I just need to go to the library and get some books. Again, thanks for the post.

You guys have any reccomendations for some good movies about daytrading? Wasn't boilerroom about that or something.

People tend to think DCA reduces risk so they think it's smart.
Dollar cost averaging actually increases risk and reduces future returns,do a search and make your own decision.

[wallstreetsedge]

i dont think there are any movies out there about day trading but to tell you a story....

my friend has a boyfriend who inherited $250k from life insurance when his parents died. in high school he wrote a ton of papers about the economy and trading, he spent a lot of his $ day trading and made good $ doing it... his only issue is he lacked discipline and when they were living together there were months where all they ate was potatoes... and he would run off to atlantic city to try and make money at the tables

after a while, he ran down his inheritance to $0, got scurvy, and lost all his weight, then they moved into my friends parents house... and now they have some cockamamie scheme wheres hes training to become a professional poker player because he thinks hes too good to work for someone...

:thumpdown:

[mjl3434]

Wow that massive failure makes any losses us beginners have seem insignificant. I don't even have 250K to lose!

[DSNT]

Congrats on your first stock. I wish I had started that early. I'd advise adding to the position on dips, but next time try to save a little more money so you aren't hit by the commission charge as much.

GE is a good safe first pick. Save for the recent volatility, which is more about market conditions, GE is a stable company. It usually moves so little that it's almost boring. I wouldn't expect tremendous gains, but it is still at a good price right now. The dividend is nice too.

GE is one of the few stocks I am truly long. I plan to hold my position till retirement.

[ZaNoob]

Chem degree? Try to specialize with relation to the oil business. A lot of the old goats are retiring and they are hiring people out of college and paying big bucks. Best of luck.

[mjl3434]

That is unless the country gets up off of their butt and decides to do something about our dependency on foreign oil? T Boone is bringing the world wind power baby! haha...Of course plastic is all petroleum based and I don't see that going away any time soon.

[Grundalizer]

Yeah I am interested in solar technology and the chemistry that goes into that, as well as biochemistry stuff. Polymer chemistry is cool also, and some very usefull products can be produced from petroleum, I just think that there are much better ways to fuel our energy needs than burning it.

I think I am going to try and buy a Solar company next. I get magazines from the American Chemical Society that always talk about DuPont, Dow, Hemlock Semiconductors, LDK, and some others. I think Peter Lynch or someone said, invest in what you know, and that is what I am going to try and do. I have a better understanding of what products a chemical producer or biotech company will produce rather than some company in the financial or healthcare sector.

So I guess invest in what you know, buy low, and sell high is what I have learned so far about the stock market.

[JV_Picker]

Yeah I am interested in solar technology and the chemistry that goes into that, as well as biochemistry stuff. Polymer chemistry is cool also, and some very usefull products can be produced from petroleum, I just think that there are much better ways to fuel our energy needs than burning it.
[...]
So I guess invest in what you know, buy low, and sell high is what I have learned so far about the stock market.

Just two things:

Don't concentrate your bets on a single sector of the economy. You're sure to miss opportunities elsewhere.

The "sell high, buy low" is good advice. Well, until a few holdings in your portfolio drop 30% or more; that's when the panic sets in.

Take some advice from this guy:
http://www.npr.org/templates/story/story.php?storyId=89324244

Swenson manages Yale's endowment. He makes the endowment money by making his picks and re-balancing the investments periodically. Because of the story I've taken a second look at my investments, and tried to replicate what he suggests. I've also managed to eliminate some mutual funds in the retirement account that have similar goals, or occupy the same capitalization strata (I don't need two relatively expensive large cap funds in an account when one large cap index fund will do, for example).

I won't let go of my energy fund despite a 14% loss over the last few weeks, however. People might be driving less, but I don't see lighter traffic during rush-hour or weekend travel times.

For a guy that's starting, I'd be careful about what you pick. You can't put a lot in because you're a student, and losses and commissions can significantly reduce what you currently have.

Someone mentioned performing paper trades to see how well you do. I suggest investopedia.com. I practiced for about two years on the site before risking real cash. I learned one very important lesson: frequent trading kills your gains, especially if the pool of funds you're using is small.

[Horsefish]

Well I am 21 years old and after always wanting to start investing, but spending my money on beer, I decided to start investing.

I bought 5 shares of GE @ 26.65 yesterday, and I will be interested to see where they close today. Now that I am into the game, I am very tempted to buy things at the drop of a hat just because of a recommendation or an analyst rating of BUY. It is very hard to have so many companies and so little money at times. I get immediately turned off from companies with high share prices, as I feel owning 1 share of a 50-75 dollar company isn't going to help me at all. I know that 1 share of a good company is better than 10000 shares of a poor company, but it is hard to get away from that mentality.

From what I have been reading this is definitely a traders forum, and since I have no experience trading, and would probably lose all of my money, I plan to invest for the long term at the moment. I was just wondering if any of you had any memories of the very first stock you bought, how it faired, and how you continued to grow your portfolio.

Did you learn any extremely valuable lessons along the way?

Thanks for any info you are willing to share, I just wanted to share with you that I bought my first 5 shares of a company...wooo!




In light of the last few days, it is obvious that you made an excellent choice for your first buy. Congrat's....Now stay around and teach the rest of us experts how to do it.......I'm listening!

[Grundalizer]

Thanks for the link, I read through it, that guy is pretty good, I wish I could make 5 billion a year.

As for my first buy, I am glad I chose GE as they are putting a lot of new money into "Greener" technology and they are a powerhouse of a company. I am happy to see the stock grow in value and hopefully it will continue to rise.

If my crystal ball shows me anything else I will let you guys know.

I picked up one of Peter Lynch's book today as well as Jim Cramer's book and will start with those, the bug of investing is very contagious.

One of the things I was thinking about today is how much I would like to buy some shares of good companies I see at "buying prices" and get depressed because I simply have no money to invest right now. I guess this feeling is not all that bad because it will perhaps get me to SAVE even more of my money so that I will be able to invest in companies I want to in the future.

My point is is that it kind of stinks when you want to invest and don't have the money, and then you watch the stock you would have bought soar higher and higher, and feel like you missed the boat and will never catch another one. I imagine that sometimes happens with you guys, the traders, or hesitate on buying a company for whatever reason and watch it skyrocket and say to yourselves, "damn I knew I should have bought some shares", which in the end might make me more likely next time to play a risky bet because I missed a good shot the last time. Not to say it would work out the same way.

That paragraph might not have made sense, but I can already tell one of the hardest things I am going to face when investing is my gut feeling, and my emotions. If I could turn into a robot while I invested and only played charts, figures, and numbers, I would probably always come out even or on top. Unfortunatley, I am not a kick @ss super robot like Arnold, and my CPU is not a neuronet processor.

[mjl3434]

Take profits while you got em =). Or better yet put a trailing stop on, to lock in your profit. That way you keep your profits if it goes up but automatically sell if it drops too much.

It's practically as good as having a neural net processor (btw those are real things, just not that useful).

[Grundalizer]

How does one go about paper trading?

I can't just write down a ticker symbol and send it to Wall Street, NY, NY can I?

Does it have to go through a broker? I will be very happy when I can sell my first stock for a profit, but I plan on holding GE for a long time until something changes and the company no longer looks like a good one.

[numbers]

How does one go about paper trading?

I can't just write down a ticker symbol and send it to Wall Street, NY, NY can I?

Does it have to go through a broker? I will be very happy when I can sell my first stock for a profit, but I plan on holding GE for a long time until something changes and the company no longer looks like a good one.

Do a Google search on online trading simulators. Here's one example:

http://simulator.investopedia.com/?viewed=1

I haven't really tried any of these, so I don't know if they also let you do stop/limit orders.

[mjl3434]

"Paper Trading" simply refers to writing it all down on paper instead of spending real money, in order to get practice. (So no you don't need to go through a broker). You can make it as complex or simple as you find useful.

I keep a portfolio in google finance, you can enter an amount of fake cash, and then enter your trades along with the commissions and it will track them. Yahoo finance has something similar.

When you get into the profit range you will want to put a stop order in. Google "stop loss" or "trailing stop"

[Grundalizer]

Alright thanks

[wallstreetsedge]

you cant learn from papertrading..

- trades must happen for them to count in paper trading
- its a different world playing with play money vs real money

[Grundalizer]

When I trade with fake money I just buy whatever I feel like it, not really doing any research into the company or caring if I win or lose.

The alure of being a trader is very tempting, but with an addictive personality like mine I could see myself being one of the day traders you read about who ends up at the bottom of a skyscraper.

I am so tempted to put 30,40, or 50 bucks into a penny stock like UDTT, and figure if it goes up and is successful I could make an allright profit. But then logic sets in and says, that 50 bucks is probably better invested in a stronger established company in a sector that has a forseable growth future. I like to gamble, and sometimes I spend 40 bucks on scratch tickets, whereas if I put 40 into UDTT, I bet my odds would be better than the lottery, and I would have some control over my gains/losses.