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I am finally all geared to start investing. I have been checking out these boards often, and other boards as well. I am college grad so I had a few classes on how to analyze stocks and how to analyze the health of a companies financials. Including some knowledge of all of the tricks they can play regarding the financials too.
So here is my question. What would be some good types of stocks to start with? I am basically using money that I do not need nor do I care to lose. I am using a small budget just to play around with ($200).
Should I invest in some penny stocks? Low end dollar stocks? OTC/Pink vs. Nyse?
I know whatever I invest in I will do my research. Im just curious how you think somebody should start. Let me know your thoughts!
I am finally all geared to start investing. I have been checking out these boards often, and other boards as well. I am college grad so I had a few classes on how to analyze stocks and how to analyze the health of a companies financials. Including some knowledge of all of the tricks they can play regarding the financials too.
So here is my question. What would be some good types of stocks to start with? I am basically using money that I do not need nor do I care to lose. I am using a small budget just to play around with ($200).
Should I invest in some penny stocks? Low end dollar stocks? OTC/Pink vs. Nyse?
I know whatever I invest in I will do my research. Im just curious how you think somebody should start. Let me know your thoughts!
Please don't waste your time on OTC/Pink stocks.
What I recommend you do is save up more money and starting reading on the stock market itself. Learn the mechanics of the stock market and what makes it work. $200 isn't really enough to invest into anything.
So decide what time of investor you want to be: long term, swing trader, or short term trader.
Right now this market is news based driven and world economics is effecting everything. most of all the good companies are undervalued and cheap now, the problem is the market is weak right now and under pressure from economics issues in the world. start here at seekingalpha to get up to speed on the market condition as of today. You may wanna wait till market goes to extreme fear to buy something as well.
What I recommend you do is save up more money and starting reading on the stock market itself. Learn the mechanics of the stock market and what makes it work. $200 isn't really enough to invest into anything.
So decide what time of investor you want to be: long term, swing trader, or short term trader.
Right now this market is news based driven and world economics is effecting everything. most of all the good companies are undervalued and cheap now, the problem is the market is weak right now and under pressure from economics issues in the world. start here at seekingalpha to get up to speed on the market condition as of today. You may wanna wait till market goes to extreme fear to buy something as well.
My thoughts were that $200 should be more than enough if I am looking to purchase only one type of stock. I know it wouldn't be enough to support a diversified portfolio, but unless I was looking to invest in a google or apple, it should be enough for at least 1 share of something. I would rather only have to watch 1 stock and not worry about my portfolio. So I am curious why you dont think its enough? Thank you for your response.
$200 is not enough to invest with... keep saving until you have at least $500, but preferably $1000. The average commission to trade a stock is say $7, so it will cost you $14 to buy and sell. $14 / $200 = 7%. That means you will have to make 7% just to break even. Most penny stocks are similar to playing roulette. You should invest in high quality stocks such as CAT, AAPL, ISRG, CMG, GOOG, SBUX, COST, IBM, MCD, MSFT, DIS etc (these are just examples, not saying all these are good buys now, but they are all good quality).
Usually you want to buy stocks in lots of 100 or more. As a beginner I'd look on the NYSE...say of products your familiar with. But you really need to save more before jumping in...unless you want 10 shares of GE.
I'm a pretty conservative investor but if you're only gonna invest $200, then I'd go all out on something high risk, high reward. TVIX comes to mind. Put $200 in it.. the next time the market goes south, it could double. If the market continues to rally, it'll erode away like death from a thousand knives. But what's the big deal assuming that $200 is money you can afford to lose?
If you want something moderately high risk, then maybe Facebook (FB)? Get it at $30, when it touches the upper 30's, lots of people who bought when the stock IPO'd will be itching to get out so you might want to exit there.
Now if you were investing $20,000 or even $2000, I might suggest a different program for you:
Hard to only invest $200 in the market and try to earn a buck. If pressed to suggest a stock with only $200 as capital I would say purchase something inexpensive and speculative. With that said look at SPRINT (S). The stock is trading a bit above $3. With $200 you can buy roughly 66 shares at$3.00/share (commission not included.) This position would have to be long term. Obviously if the price of the share lowers you can buy a few more. After the stock shot up to $3.40 from a price in the mid $2.00's in a few months it has been dropping down again. (Lots of 100 shares would be more ideal.)
Thank you all for the wonderful advice. It makes sense that the commissions paid out on investing such a small amount of money would be a pretty good loss from the start, 7% or more. I guess I will hold off for now until I have some more to invest. Thanks everyone!
My thoughts were that $200 should be more than enough if I am looking to purchase only one type of stock. I know it wouldn't be enough to support a diversified portfolio, but unless I was looking to invest in a google or apple, it should be enough for at least 1 share of something. I would rather only have to watch 1 stock and not worry about my portfolio. So I am curious why you dont think its enough? Thank you for your response.
Make it $250 and you'll have a good start to opening a position in a mutual fund. This way you get to play a spread of equities, otherwise wait until you have a few Gs before you start investing. I'd look into starting an IRA that allows you to trade. Might as well write the $250 off. Keep in mind that even a discount broker will run $7.99 a trade. With $200 you will be in with an instant 4% to make up.
Note: I understand the $200 bankroll is money you can afford to lose, however the object is "not to lose it"
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