| 23 Year old in need of advice |
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YoungInvestor
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Cash: $ 3.30
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Joined: 17 Sep 2011
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Thanks!. Why would you not recommended ETFS? From what I read you get the shares rate of return and a possible divdined at the end of the year. Now I realize Im going to make mistakes and lose some money but HOPEFULLY ill make some good moves and gain some, but I should just try to learn from my mistake. But would you suggest reading about whats "hot and rising" and but into stocks that range from 2-5$? and hold them for a week and try to make a few bucks of that. ...Well even if you dont I did it anyways (with 100$) I bought 50 shares of SIRIUS XM radio, they are coming out with some new technology soon so im hoping that will make them go up a dollar or two then sell.
Im into taking a high risk high reward with about 50% of my money right now, Cause I know my 401k is pretty stable and should be there for good.
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Fri Sep 23, 2011 8:19 pm |
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oldguy
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quote:
But would you suggest reading about whats "hot and rising" and but into stocks that range from 2-5$? and hold them for a week and try to make a few bucks of that
That would be exactly what I would NOT do - day trading works for VERY few people - and the ones that bomb don't admit it, LOL.
quote:
they are coming out with some new technology soon so im hoping that will make them go up a dollar or two then sell.
LOL - so you are the only one who knows about thst? Investers have known about this technology for a year or more, so the potential "dollar or two" happened maybe 6 or 8 months ago. (It is already 'baked in the cake'). What often happens at 'roll out' is that the new technology doesn't quite live up to the expectations - so the stock crashes - be careful. Have you heard the phrase? - 'buy on the rumor, sell on the news'.
Another way to play it would be to short it - then when it falls a dollar or two on the news, you will make money on your 'short'. Actually, you can't know/predict the direction of a stock in a free market - you have a 50/50 chance of winning any position, short or long.
But if you want to try trading, here is a plan. Pick any stock that you like - place 2 sell orders, one down 10%, one up 40%. Then buy the stock. Don't look at it, don't second guess yourself by saying 'I'll wait another day, maybe it will come back". Wait until either one of your 'sell' orders triggers - take the money and repeat the process with a NEW stock (don't try to get even by buying the old stock again).
You will be right half of the time - but the -10%/+40% lets your winners to 'run' - and limits your losers.
And you are right the stocks in the $2 to $9 range are slightly more volatile than the more expensive stocks, so you will 'turn' your money quicker.
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Fri Sep 23, 2011 11:14 pm |
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coaster
Senior Advisor
Cash: $ 1357.80
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Location: Wisconsin
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quote:
Originally posted by oldguy
But if you want to try trading, here is a plan. Pick any stock that you like - place 2 sell orders, one down 10%, one up 40%. Then buy the stock. Don't look at it, don't second guess yourself by saying 'I'll wait another day, maybe it will come back". Wait until either one of your 'sell' orders triggers - take the money and repeat the process with a NEW stock (don't try to get even by buying the old stock again).
You will be right half of the time - but the -10%/+40% lets your winners to 'run' - and limits your losers..
That's an excellent approach to trading, and even discount online brokers make it possible to place held orders now, whereas you used to need a full-service broker to do that.
The problem here, and why 90% fail, is simply discipline: the discipline in sticking with a plan, no matter how things might go after you get into it. Generally people start well and then start second-guessing themselves and that's where the whole system breaks down and they fail. They're afraid to lose and in their fear of losing they let the whole plan break down and that's how they guarantee their loss.
The new trader must learn, understand, and accept that:
1) he will lose
2) losing causes pain
3) you must suffer the pain
4) you will feel the pain more often than you feel the pleasure (i.e. you lose more often than you win)
5) only by sticking with the plan and having the fortitude to stick with it through steps 1-4 will you be able to pick up the win
6) it's the one win that's four times bigger than the three losses that pays for those three losses plus the net profit left over
Why? Because it's a numbers game, as oldguy explained above. Although I'm not too sure of his numbers here: 10% down and 40% up -- I'm pretty sure you'll lose considerably more than 50% of the time. I don't know what the exact probabilities are; I don't have time to do the math, and too rusty to boot; --how about running some real numbers, oldguy?  --but you can still make money losing more often than winning. For the purposes of the above illustration's sake, I just took three losses of 10% and one win of 40% to portray that.
You have to let the probabilities play themselves out (and you have to know what they are  ). If you mess with them by second-guessing them, then you have no idea where you are, and when you have no idea where you are, then you're lost.
~Tim~
Eye Candy : Why Whimsy
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Sat Sep 24, 2011 5:22 am |
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YoungInvestor
Member
Cash: $ 3.30
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Well, It looks like im going to stick with Index funds and Mutal fun for a while!. I have alot to learn about this lol
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Sat Sep 24, 2011 3:59 pm |
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coaster
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That's the best way to learn now, and I think the wisest and most financially prudent decision to make at this point. And because that's your decision, I think you just confirmed my earlier comment, and I have no doubt you'll do just fine. 
~Tim~
Eye Candy : Why Whimsy
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Sat Sep 24, 2011 5:34 pm |
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YoungInvestor
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Cash: $ 3.30
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So you never said why you wouldn't recommend ETFs at my age. Right now i cant afford a mutal fund because of the 3k min. Whats the difference between a index fund and a etf, I cant figure it out reading online.
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Sun Sep 25, 2011 4:37 pm |
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coaster
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A mutual fund share is priced once a day at the end of the day based on the net asset value of their investments priced at the closing price that day. An ETF is an actual security, just like a stock, that trades in real-time on a stock exchange and thus can be bought and sold, as a stock, at the real-time market price. That's the major difference. Another, small difference, is that mutual fund shares can be bought and sold as fractional shares; an ETF, being a security, is normally only traded in full shares. A third, small difference -- a technicality as far as it goes, is that mutual funds shares are bought and sold from and to the investment company, while ETFs are bought and sold on the open market, therefore (supposedly) from and to another (anonymous through the clearing mechanism) seller or buyer.
The Vanguard Target Retirement funds have a $1K minimum.
I think it was someone else who made the comment about ETF's?
*supposedly: we really get into technicalities here; best saved for another thread and another time. Most of that above doesn't mean anything at this point, and it's not stuff that's going to make any difference, either, at this point.
~Tim~
Eye Candy : Why Whimsy
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Sun Sep 25, 2011 5:40 pm |
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LangTuSJ
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quote:
Originally posted by oldguy
The keys to wealth building are (1) the amount invested, and (2) the returrn. You are putting about $12k/yr into your investing (including the match), That, at the historic return of 11%/yr, is a million at age 45, about $2M at age 51, $4M at age 57, and so on. So you are on the right track.
But I would use a taxable account for 1/4, or even 1/2, of your investing - don't lock $4M into an account that you can't use for over 35 yrs. A taxable account (in a market index fund or a Target fund) is immediately available to you, so it is a good fallback EF. It grows tax deferred, the fees are minimal - and if/when you sell some you pay only 15% capital gains on the profit.
Would you recommend any funds? 11% return rate is quite awesome in this market.
TIA
Stanley
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Sun Oct 09, 2011 7:34 am |
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tigerarmy
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you are saving 21% (14 + 7) in retirement.
save some for rainy day. and rest in wise investments - may be stocks.
good question.
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Tue Oct 25, 2011 8:08 am |
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coaster
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| Re: It was inevitable. In every society throughout history, |
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quote:
Originally posted by option4assets
We told you all for many years that the grand scheme of socializing America, of having the bankers run the world in their agenda of some form of one World financial government would come and that it would be the downfall of our economic system. Some continued to laugh at us, but it was a nervous laugh. See, it gets harder to laugh at the "nuts" when the nut predicted you'd lose your job and now you've lost your job. Today's "conspiracy nut theory" is often tomorrow's headline story.
Now we see a movement called Occupy Wall Street.
Yet again, so right in the grand overview, and so wrong in the underlying forces.
Some thought might be given to WHO is trying to socialize America. Wall Street and the Big Banks? Sheesh. They're going to be the big losers. Why would the losers be behind the force for change? See my posts in the primary thread on this topic.
~Tim~
Eye Candy : Why Whimsy
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Wed Oct 26, 2011 6:21 am |
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