College Student Needing Some Dough!!!

Hayes 5 Crew · 08-11-2005, 02:24 PM

Needing some help, I'm a new investor and looking to make up what I lost.

Im a third year college student trying to make some extra money, thus I started investing. Things have gone fairly well, the stocks i researched have done well and the possibility to make money was there, until I hit an unforseen wall.

My trades cost 6.95 at firstrade.com which is a fair commission. Unfortunately, when I began investing, I only bought 2 or 4 stocks of any one company. I learned the hard way that you need a large amount of shares to overcompensate the commission charges by the online broker.

Now after this long winded summary, how do you all invest? Specifically, how many shares do you at least try to buy before investing? Or, how do you overcompensate for the commission charges?

Thanks,
Eddie

deepinwonder · 08-11-2005, 05:11 PM

You need to find a good little company in a hot sector who has shares you can afford more than a few of.

I would highly recommend Cramer's latest book. That will teach you a lot about investing and keep you from making common mistakes, then watch his show every night for what's up and what's not. You can find used books for cheap on Ebay or Amazon.

helk · 08-12-2005, 10:49 AM

It really depends on what type of money you're playing with. If it's money you are willing to loose, 'Mad Money' as Jim calls it, then I'd look for speculative stocks in the 2 - 10 range as Jim suggests. Speculative stocks give you the highest possible returns and usually you will hold them a bit longer than normal trades - sometimes a few years or more making commissions less of a burden. But, speculative stocks are also a bit riskier and you will see more fluctuations in your account. Speculative stocks aren't for the weak-hearted. If it is money you aren't willing to gamble with, then I'd look at investing in a mutual fund.

If you're playing with 'Mad Money', I'd try to buy at least $500 of each stock, if possible, to keep the commission percentage reasonable. I'd also try to own at least 3 stocks to have some diversification. So, if you only have $1000 to invest, buy about $300 of 3 different stocks in 3 different sectors. I'd also buy all the shares at one time instead of buying small chunks as Jim suggests because the commissions will kill your profits when you're buying small amounts.

I started the same way back in 1999. I started with just 3 stocks and expanded from there. It can be done, but as Jim always states 'Do Your Homework'. Good luck to you!

axb8000 · 08-12-2005, 07:19 PM

Yes, I'm a student too and started investing just little amounts which was bad news. Now I invest at least $500, preferebly $600. If you don't have it all just let it sit in a money market until you get $500 to throw in. It's worked pretty well so far.

optimus25 · 08-17-2005, 12:46 PM

I was a student at University of California, Irvine when I first started investing back in 1999. I thought I was such a hotshot because I made money a ton of money in the stock market using money I obtained from Student Loans and working on campus. My initial investment of $2000 ballooned to over $10,000 in a couple of months. I thought, (and this is the lesson) that it would go on forever.

Two years later I lost the $10,000 in profit and over $6,000 of my own capital. That's a lot of money for a college student who put himself through school. I learned that trading is fun only when you are winning & trading costs can really eat up your profit. After that debaucle I decided to learn as much as I can about investing.

I don't suggest buying investment increments of less than $400. Trading small amounts is just not cost effective. You also really have to look at the situation you're in. Make sure that this investment is discretionary money. You never can really guage how any investment will do especially since all we're doing is speculating on price appreciation. Concentrate on your education, get a good paying job after you graduate, then start investing like crazy.

Boydric · 08-24-2005, 12:23 PM

When I trade I try and keep the number of shares in nice round numbers. Buying 50, 100, 150 shares of stocks. I am also just getting into this and it seems to work for me. I like to keep all of my math real simple.

pimpmeister · 08-30-2005, 12:11 AM

There are a few other tricks to invest cheaply & make money in the market wisely:
1. Invest in DRIPs - Dividend Re-Investment Plans. There are quite a few companies you can buy stock directly from w/out commissions. Some DRIPs require you to have a share transferred from other people or to have a certificate issued to you, which usually costs $50+ from a broker. Avoid those fees but if you know someone who invests, they may transfer a share of a company you like to you. Your dividend checks are automatically reinvested in DRIPS, allowing you to accumulate a nice sized portfolio over time.
2. Use ING Direct to save up your money until you accumulate enough to send to your broker. They pay a better interest rate than your average money market or savings account and they will automatically deduct a specified amount from your checking account if you request. You'de be surprised how quickly $20/wk. adds up and how little you'll miss it. They have a $25 bonus for signing up right now w/ referral. If you can find someone with an account then have them refer you. If you can't find anyone, send me an e-mail w/ your e-mail address: m.koeniger@insightbb.com.
3. Watch Cramer and subscribe to the Motley Fool (Fool.com). Both sources have great advice.
4. Invest, don't trade. If you want quick money, go to Vegas, your odds are about the same. Pick companies you understand & you trust to be around in 10 years then plan to invest in them for 10 years. Be very patient
5. Mix up your portfolio well. Have one REIT for cash, one tech or risk stock for growth (but no more than 10 or 20% of your holdings), and a few big companies that balance growth and income. I have New Plan Excel(NXL) for my income, Ford(F) for my growth/risk stock, and Altria (MO) and Coke (KO) for my blue chips. I'm watching ConAgra, Colgate, GE, Sirius, and Oracle for future investments at better prices. You should always be watching more companies than you own stock in and know what you're willing to pay for a company.
6. When you graduate sign up for your company's 401k for whatever percentage they'll match!
I started when I was in college 6 years ago with $1000 and I've had $30/wk withdrawn since then. After alot of patience, research, and a little bit of good luck I'm up to $42k and still going.

RRX · 08-30-2005, 09:20 PM

If you have just a little bit of money to trade try www.sharebuilder.com. The good thing about this company is that they allow you to buy partial shares. Their trades cost as little as 4 dollar per transaction, you pick a day to trade (say the first Tuesday of the month) and they buy the shares for you. Excellent for dollar cost averaging, however Stock selection is limited but growing. Good way to get your feet wet

08-11-2005, 02:24 PM	#1
Hayes 5 Crew new member Join Date: Aug 2005 Posts: 3	College Student Needing Some Dough!!! Needing some help, I'm a new investor and looking to make up what I lost. Im a third year college student trying to make some extra money, thus I started investing. Things have gone fairly well, the stocks i researched have done well and the possibility to make money was there, until I hit an unforseen wall. My trades cost 6.95 at firstrade.com which is a fair commission. Unfortunately, when I began investing, I only bought 2 or 4 stocks of any one company. I learned the hard way that you need a large amount of shares to overcompensate the commission charges by the online broker. Now after this long winded summary, how do you all invest? Specifically, how many shares do you at least try to buy before investing? Or, how do you overcompensate for the commission charges? Thanks, Eddie

08-11-2005, 05:11 PM	#2
deepinwonder forum leader Join Date: Jul 2005 Location: nc Posts: 1,183	re: student You need to find a good little company in a hot sector who has shares you can afford more than a few of. I would highly recommend Cramer's latest book. That will teach you a lot about investing and keep you from making common mistakes, then watch his show every night for what's up and what's not. You can find used books for cheap on Ebay or Amazon.

08-17-2005, 12:46 PM	#5
optimus25 forum leader Join Date: Aug 2005 Location: Orange County, CA Posts: 1,801	I was a student at University of California, Irvine when I first started investing back in 1999. I thought I was such a hotshot because I made money a ton of money in the stock market using money I obtained from Student Loans and working on campus. My initial investment of $2000 ballooned to over $10,000 in a couple of months. I thought, (and this is the lesson) that it would go on forever. Two years later I lost the $10,000 in profit and over $6,000 of my own capital. That's a lot of money for a college student who put himself through school. I learned that trading is fun only when you are winning & trading costs can really eat up your profit. After that debaucle I decided to learn as much as I can about investing. I don't suggest buying investment increments of less than $400. Trading small amounts is just not cost effective. You also really have to look at the situation you're in. Make sure that this investment is discretionary money. You never can really guage how any investment will do especially since all we're doing is speculating on price appreciation. Concentrate on your education, get a good paying job after you graduate, then start investing like crazy. __________________ "Face your deficiencies and acknowledge them. But do not let them master you." Helen Keller "The man who can drive himself further once the effort gets painful is the man who will win." Roger Bannister My online trading Journal: http://stockmarketaddict.blogspot.com

08-30-2005, 09:20 PM	#8
RRX new member Join Date: Jul 2005 Posts: 5	If you have just a little bit of money to trade try www.sharebuilder.com. The good thing about this company is that they allow you to buy partial shares. Their trades cost as little as 4 dollar per transaction, you pick a day to trade (say the first Tuesday of the month) and they buy the shares for you. Excellent for dollar cost averaging, however Stock selection is limited but growing. Good way to get your feet wet __________________ RRX

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08-12-2005, 10:49 AM	#3
helk valued contributor Join Date: Aug 2005 Posts: 112	It really depends on what type of money you're playing with. If it's money you are willing to loose, 'Mad Money' as Jim calls it, then I'd look for speculative stocks in the 2 - 10 range as Jim suggests. Speculative stocks give you the highest possible returns and usually you will hold them a bit longer than normal trades - sometimes a few years or more making commissions less of a burden. But, speculative stocks are also a bit riskier and you will see more fluctuations in your account. Speculative stocks aren't for the weak-hearted. If it is money you aren't willing to gamble with, then I'd look at investing in a mutual fund. If you're playing with 'Mad Money', I'd try to buy at least $500 of each stock, if possible, to keep the commission percentage reasonable. I'd also try to own at least 3 stocks to have some diversification. So, if you only have $1000 to invest, buy about $300 of 3 different stocks in 3 different sectors. I'd also buy all the shares at one time instead of buying small chunks as Jim suggests because the commissions will kill your profits when you're buying small amounts. I started the same way back in 1999. I started with just 3 stocks and expanded from there. It can be done, but as Jim always states 'Do Your Homework'. Good luck to you!

08-12-2005, 07:19 PM	#4
axb8000 valued contributor Join Date: Jul 2005 Location: Bay Area, California Posts: 106	Yes, I'm a student too and started investing just little amounts which was bad news. Now I invest at least $500, preferebly $600. If you don't have it all just let it sit in a money market until you get $500 to throw in. It's worked pretty well so far.

08-24-2005, 12:23 PM	#6
Boydric new member Join Date: Aug 2005 Location: Lake Mills, Wisconsin Posts: 4	When I trade I try and keep the number of shares in nice round numbers. Buying 50, 100, 150 shares of stocks. I am also just getting into this and it seems to work for me. I like to keep all of my math real simple.

08-30-2005, 12:11 AM	#7
pimpmeister new member Join Date: Aug 2005 Posts: 1	There are a few other tricks to invest cheaply & make money in the market wisely: 1. Invest in DRIPs - Dividend Re-Investment Plans. There are quite a few companies you can buy stock directly from w/out commissions. Some DRIPs require you to have a share transferred from other people or to have a certificate issued to you, which usually costs $50+ from a broker. Avoid those fees but if you know someone who invests, they may transfer a share of a company you like to you. Your dividend checks are automatically reinvested in DRIPS, allowing you to accumulate a nice sized portfolio over time. 2. Use ING Direct to save up your money until you accumulate enough to send to your broker. They pay a better interest rate than your average money market or savings account and they will automatically deduct a specified amount from your checking account if you request. You'de be surprised how quickly $20/wk. adds up and how little you'll miss it. They have a $25 bonus for signing up right now w/ referral. If you can find someone with an account then have them refer you. If you can't find anyone, send me an e-mail w/ your e-mail address: m.koeniger@insightbb.com. 3. Watch Cramer and subscribe to the Motley Fool (Fool.com). Both sources have great advice. 4. Invest, don't trade. If you want quick money, go to Vegas, your odds are about the same. Pick companies you understand & you trust to be around in 10 years then plan to invest in them for 10 years. Be very patient 5. Mix up your portfolio well. Have one REIT for cash, one tech or risk stock for growth (but no more than 10 or 20% of your holdings), and a few big companies that balance growth and income. I have New Plan Excel(NXL) for my income, Ford(F) for my growth/risk stock, and Altria (MO) and Coke (KO) for my blue chips. I'm watching ConAgra, Colgate, GE, Sirius, and Oracle for future investments at better prices. You should always be watching more companies than you own stock in and know what you're willing to pay for a company. 6. When you graduate sign up for your company's 401k for whatever percentage they'll match! I started when I was in college 6 years ago with $1000 and I've had $30/wk withdrawn since then. After alot of patience, research, and a little bit of good luck I'm up to $42k and still going.