Scottrade: Newbie here (inheritance, mutual funds, trading, dividend)

[jc76]

Never invested in anything in my entire life. I have about $10K i got in an inheritance. I have no idea what to do with it. This Scottrade thing I see looks legit. Anyone have any pointers for me? I have no idea how any of this works and I don't want to get taken.
I'd like to make as much as I can with little risk...if even possible. Thanks.

[j_k_k]

Yeah. Put it in CDs until you understand other forms of financial instruments and how they work. A lot of people will advise you to put it in this, or in that, and one person may give you a virtual (if inane) sales pitch for load American Funds, but you won't in most cases understand what they are advising until you read up on it, and most of them won't explain it to you (if they do, that's a plus). Plus, the market has regained a lot of lost ground anyway, and there is so much panic and doom and gloom that society may manage to actually create another market crash simply because they're such a bunch of cravens. In other words, if you were trying to time market entry, there's a chance this isn't the optimum time. That takes away any sense of desperate urgency to 'just get in'.

[StealthRabbit]

Scottrade is for active trading of securities and equities.

You can do yourself a favor and get some conservative advice for initial investment, Cyber-trade for awhile with fake money (pretend) and see how you do BEFORE jumping into buying individual issues.

Bogleheads is a good spot to hang out (Vanguard users)
Bogleheads :: Index

Fidelity has many good no-load funds (similar to Vanguard). (both companies have good websites with adequate training info.) There are private magazines and e-newsletters to follow each company and advise investors.

There is a recommended reading list at bobbrinker.com and he does a 3 hr radio call-in show for 3 hrs on Sat and 3 hrs on Sunday. It is pretty basic, but informational.

Be diversified!!! (don't plow it into a single stock). Indexes allow more cushion for a fall, but grow more slowly.

Better know your stuff, as some financial adviser will show up and take that $10k off you hands and give you back $8k for their trouble.

[Jonotastic]

Join a stock simulator to learn how to trade stocks.

Once you feel comfortable, invest in stocks with your Scottrade account. There's no money in CD's etc. When you invest make sure you diversify to limit risk. I would recommend...RIG, AAPL, BAC, GS, LVS (when it goes back down to $16-17), and GOOG (once the China issue is settled).

[Oildog]

Agree with others that I'd park the money in CDs for 6 months to a year while you educate yourself on trading and the markets. I use Charles Schwab and they have a lot of research available on their website.

I like pipeline companies like KMP for generating cash...but they are considered master limited partnerships so there is some tax issues. Utilities are considered lower risk...SO.

[gvillager]

Originally Posted by jc76

Never invested in anything in my entire life. I have about $10K i got in an inheritance. I have no idea what to do with it. This Scottrade thing I see looks legit. Anyone have any pointers for me? I have no idea how any of this works and I don't want to get taken.
I'd like to make as much as I can with little risk...if even possible. Thanks.

Scottrade is a legit company. As others have said, make sure you understand what your investing in. Keep careful records, you'll need them at tax time.

[smilinpretty]

I have been learning allot about stocks. I went to www.dividenddetective.com I signed up for $5 for first month, thereafter, $15. However; lots of free stuff on the site.

I have decided to go the route of Dividend investing. Safe companies: McDonalds, Walmart, Johnson and Johnson, Proctor and Gamble, B & P, Heinz, Pepsico, Coca Cola, etc. You make 3 percent plus growth. On B & P dividend is 5.8%. You can sleep at nights and beat a CD.

I signed up with Scottrade. Going to buy a few books, read and become educated.

[ezzy]

You probably wanna learn more about the stock game first before investing all your $10k in trading stocks. YOUNG MONEY Magazine - Your Life...Right Now is a great source to learn about stocks.

My advice is may be start up slow with low risk..take half of that money $5k and put in mutual funds (can come in handy in a couple of years). You can then play around in stocks with the other $5k, or some of it. Notice I said play around, because trading stocks is never guaranteed so be ready to loose some or all of your money.

[Jonotastic]

You must understand the risks involved with investing, which include mutual funds. However, you need to invest with the intention of making money. It's a good time to invest now. The market has gone up a lot since its lows, but the recovery is only starting. You have $10,000, invest a minimum of $1,000 into each company. I would pick 5 stocks in different industries that are expected to grow. Some of the companies should be stable with low expected returns (MCD), while others volatile with high expected returns (C). I would personally stay away from mutual funds. You must educate yourself, but using a buy and hold strategy isn't something that should take months to learn. If you planned on day trading or trading options, that's a different story. Pick 5 stocks, I recommend...BAC, C, AAPL, RIG, GOOG. Set a target price for each stock, my target prices for the stocks above...21.00, 5.50, 300.00, 670.00. You need to spend about an hour each day checking the news of each stock. Don't expect to touch the money for at least a year. Your stocks may hit their target price in 1 month, 3 months, 6 months, 1 year, 2 years, or even longer. If any harsh news comes out that would derail growth in a specific stock, think about lowering your target price or selling it. The idea of buying and holding for 5 years without looking at the price is a horrible one, which was proven in March 2009. You have to constantly monitor the news for each company.