how do you invest..

[ozarkinit]

How do you invest in a company? My dad cant tell me, my friends mumble things about mutual funds.??Someone else said you had to pay a broker 10dollars a trade for buys and sells.. what,what?
can someone explain to me how to invest in a company, how to make money off them, how to know when to buy/sell,........
I am a baby on this, but Im trying to do something to prepare to live higher than cardboard box 20 years from now. Can someone help?

[mangyhyena]

One cheap way to invest in a company is to get a job at a company that offers an option to purchase their stock. Home Dept and Walmart are two companies that come to mind which offer this. If you wind up going this way then you should pick a small amount to invest every paycheck to start. Then, each time you get a raise you invest 50% of the extra money you have on your paycheck into the stock, which increases your investment while at the same time giving you some extra cash on your paycheck.

Another way is to go through a broker. But I'm not sure about this as I don't do it myself.

Another way is to invest in a 401K. But I've got big problems with this one. Investing in a 401K allows you to put money in without paying taxes on it. In theory it allows you to invest more money. But---you may not withdraw your money before retirement and use it for yourself without paying huge penalties and as soon as you take it you have to pay the taxes on it. Personally, I would never put my money into something where I'm told when I'm "allowed" have it. If it's my money then I should be able to get it when I need it. But that's just me.

If you want an easy way to invest that doesn't involve picking stocks, doesn't involve the govt. telling you when you can have it and penalizing you if you take it early, and without huge fees to purchase, you might consider a Mirror Index Fund. This is a fund that mirrors or copies the companies represented by, for example, the Dow Jones. That way, when you see the Dow is up or down, your investment which is an exact copy of their stocks is also up or down. Traditionally the Dow grows over 10 and 20 years. If you have that fund then your investments will match that growth, or loss.

There are other ways and things to invest in. No one member is going to be able to list them all because there are just too many. And all investments carrry risk, meaning you could lose money. Then again, you could also make money.

[mangyhyena]

ozarkinit, I'm 37 years old. I wanted to take a moment to share something I've learned about money. The only reason I'm taking the time to do this is you expressed an interest in investing, which is closely linked with saving. Most people your age do not save and when I've tried to tell others your age about this they nod, express interest, then go back to spending everything they make on goofy things like brand new cars and electronic gizmos.

Until I was 33 and married I spent everything I made. I had never had more than a thousand dollars in the bank at any given time. I did invest in company stock, but I withdrew it every year to buy something I "had to have." I literally lived paycheck to paycheck. Losing a job meant I went late on my bills the very next month. Bills would come in and I would have to wait until I got paid to pay them. And don't even get me started on credit cards, car payments, and such. I was totally stupid and ran up debt, leaving me even less of the money I made each week. Everything I learned about money I learned from my parents, who did exactly as I mentioned above.

But now it's not that way. Now I've almost paid all my debt off with the exception of my mortgage. I've got enough money in the bank to pay my bills immediately without having to wait until I get my paycheck. And the month following my last credit card payment I will be putting the exact amount I've been giving them each month into a savings account. I have also been investing in company stock at my work, which now has a value worth several months of my bills. I've worked 2 jobs for over 2 years to get into this position.

I wish I had done this back when I was 18. If I had then I'd be fairly well set for life right now. And that's without college or high-paying jobs. When I see someone young I usually want to shake them until they understand this. The more you do for your future right now the better off you'll be later. But if you wait like I did you will have a very hard time getting yourself straightened out.

If I woke up tomorrow and was 18 again, I would be sure to put money away. I'd work 2 jobs and setup investments alongside savings. I'd stay clear of debt by not buying a new car, not using credit cards, and not living above my means.

Remember one more thing. When I remember back when I was 20 it feels like about 7 years to me. In other words you'll be in your 30's before you know it.

[JBinKC]

Lots of factors needed in order to be successful in stock picking, You must be somewhat knowledgable in basic accounting, macroeconomics of the market, understand general trends and able to spot earnings momentum coupled with low relative enterprise value before the herd moves in. It requires lots of time as it is a full time job screening and keeping up with the current information on the companies you hold.

[Rancher]

Don't be discouraged. It is really not "a full time job" but to be successful you need to learn.
Go to your library and carefully read the INVESTORS BUSINESS DAILY newspaper for a few days. The WALL STREET JOURNAL, FORBES, etc., also have a great amount of information. If you phone Investors business daily, you can get a free temporary subscription to get you started also. If you do, then also ask for their investment guide book also. Then go to a discount broker web site, (Scottrade, Charles Schwab, etc. there are a number) or visit the discount brokerage local office, and discuss how to invest. Do not invest without understanding what you are doing and why you are putting your money into the stock. Join your local Investment Club and you will find many experienced, knowledgable people who are happy to help you.

[fredfl]

I've been investing for about 40 years and the best success I've had is to buy solid companies that pay a decent dividend and hold them long term. I only sell when I need some cash. I was able to semi retire at 52 and completely retire at 55. I used dividend reinvestment plans i.e. instead of taking the div's in cash I reinvested in more stock. The companies I chose had a history of increasing their dividends every year or so and the yields I now receive based on investments started in 1990 average around 7 or 8 % not to mention the capital gains of 300-400 % on many of them. I was told in 1990 that the market was high and you would have difficulty earning a good return with this technique, I'm sure there are many nay sayers today as well. It is actually easier today as you can keep all your stocks in one account Schwab for instance and select dividend reinvestment when you initially buy the stock. I will give you a partial list of the companies that I own and believe they are still good investments today. I'm just gonna list ticker symbols you can go to financeyahoo.com and look at charts for these by just putting in the ticker symbol. mon,jci,xom,cvx,afl,rpm,mrk,jpm. Many others have been bought out over the years but you get the idea. Its a good idea to join an investment club and learn about investing in general, I ran a couple of them over the years and found most of these stocks by doing the research required to present these to the club group for possible investment. One of the primary techniques I used to raise funds was to always keep my expenses low and use all excess funds for investment i.e. whenever I got a raise or a better job I continued to live at the former level as long as possible, I never bought new cars or expensive toys although I always had what I needed. It takes a little discipline but well worth the modest sacrifice. I won't get into the more advanced trading/bond investing etc. unless there is someone here who might benefit from it. Good luck and keep your eye on the goal.

[gump]

If you don't know much about how to analyze stocks, why not just keep the bulk of your savings in an index fund?

[annabella1]

Here's a link:
http://www.fool.com/
They have always given me good advice.

[Rancher]

Fredfl gave good advice.
Many dividend paying stocks permit you to make direct investment, without even going through a broker. Often you do not have any broker fees at all this way.
Make sure that you make regular, additional investments on an often, monthly or quarterly basis, and request automatic dividend reinvestment accounts . Most such companies, such as public utilities, etc., offer this option.
Small initial investments, with regular additional additions, will compound to very good results over the years. I made my first investment in the market in 1958, investing only $50 in what was then Public Service Company of Colorado. I still own it. With automatic dividend reinvestments, my account with that single company (I also have others) is now over $300,000.
You can do it. Just make up your mind and follow through.

[RangerRick]

Invest in what you know. If you know about crafting or natural foods or well pumps or quality nose drops or oil sands or durable goods invest in what you know. Research your industry, research companies associated therewith cross your fingers and throw your dice because playing the marked is a crap shoot on some level and anyone that says any different is a damn fool or a lier and hasn't played the market to any extent.

If you can't or won't do your research go get you a nice index fund that mirrors the Dow or Russel or whatever blows your skirt up.

Good Luck and have fun and remember the first rule, forget long term and buy low sell high.

rick

[Quietgentleman]

I've been investing in a IRA sense my 30's which I think is a good idea but I'm limited to how much I can invest per year. I have maxed it out every year sense I started it. What I would like to know is there a list of these companies that I can buy that doesnt require a broker. I would like to speed up when I retire. Through alot of research and learning I hope to do that with these companies.

QGM

[RangerRick]

Open up your own on-line account with Scott Trade or TD Waterhouse/Ameritrade or another house of your choice as there are many out there. I've been using Ameritrade for 15 years. I think I pay like 10-11 bucks per trade regardless if I buy/sale 10 shares or 10,000.

Rick

[gump]

I've been investing in a IRA sense my 30's which I think is a good idea but I'm limited to how much I can invest per year. I have maxed it out every year sense I started it. What I would like to know is there a list of these companies that I can buy that doesnt require a broker. I would like to speed up when I retire. Through alot of research and learning I hope to do that with these companies.

QGM

Some libraries carry the DRIP Investor which is a newsletter focused on companies with DRIP programs. If your library carries it, you can find everything you need there - contact info, any fees, minimums, etc.

I don't own it in a DRIP but you can buy Walgreens stock in a DRIP. I used to work for their corp side and they have a lot of smart people there. Walgreens is in the rare 30/30/30 club - 30 years of consecutive growth in revenue, earnings & dividends. They are at a 52 week low and I have been buying more...

[johnjmw]

There are three types of investing in my opinion.

1) Don't know what I am doing and don't care enough to do the research. This person should look into good mutual funds. They are usually safer than buying stocks for many people.
2) Day traders.
You really need to keep an eye on the market throughout the day to catch the "deals" This is a really scary way to invest. A friend of mine made $20,000 with a $5,000 investment in just 2 months, then lost $18,000 in another two weeks. Way to intense for me.
3) Stock investor
This person keeps investing in the same handful of companies that they have researched and are in them for the long haul.

I'm kinda in the middle of 2&3. I trade more often than my accountant likes come tax season. I rarely keep a stock more than a Year or two and often only three to six months. It's a dangerous game but I only watch about 30 stocks and spend only about an hour a day checking them and looking at any new stocks that I've heard about. Then just watch the highs and lows for trading. Scottrade and Yahoo make keeping everything strait and easy.