Investing For Dummies

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I need to start a portfolio but I have no clue where to begin. I'm afraid to talk to a consultant because of my investing ignorance. Please tell me the basics of investing starting with what a yield and return are.

Best Answer

yield typically pertains to the percentage dividend that might be received for owning a stock. own shares of stock is actually owning a piece of a company. companies typically sell shares of stock to raise money. so when you buy stock, you are buying a fractional ownership in that company. at times the company will return some of its earnings back to shareholders in the form of dividends. the yield would be the amount of the dividend divided by the cost of the share. Much like the interest you receive on your savings account at the bank, the dividend yield represents your return on your investment.

I've really been thinking about investing in stocks but the only thing is I don't know where to start or what to invest in! is there like a "investing for Dummies".

Best Answer

Congratulations on getting started. It?ll help you more than you know! Your first dollars should be spent on getting educated on investing. You don't have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it'll help you! So let's start there. You ask a very broad question, so be prepared for a pretty long answer. Just take it in chunks! How to invest depends on what you already know. We'll assume that you're beginning! A good primer is How to Make Money in Stocks by William O'Neil. You can get it cheap just about anywhere. It?s widely available new or used. Another good one is one of Jim Cramer's books like Real Money (he?s got a few). But books will only get you so far. At some point, you'll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com For free, you can start by visiting thestreet.com and investopedia.com. That'll get you a pretty good primer so at least you'll understand what the markets are and what a stock is, etc. If you get a chance, watch Mad Money on CNBC. Don't trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself. Next, subscribe to something like Investorsbusiness daily or something like that that can help you identify good stocks. Once you understand stocks, go to 888options.com. It's a website that'll help you understand options (what they do, how they work, etc). You don't need to trade them, but the more you know, the more you'll see how options can really be the safest way to invest (once you're educated). For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter I know that?s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in. As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling. You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc). And yes, you can definitely deal easily online. Start slow, then as you figure things out, you can buy more shares. Congrats again on getting started. If you have any questions, please let me know. Hope this helps!

I'm wondering about how the best route would be. I currently am 16 years old (and yes, i know, i need to be 18 to get into the stock market or else have someone older such as a guardian sign, etc.) I have saved up roughly $12,000 that I worked for and at the moment I am making 4% interest compounded monthly which comes to $40/month in interest. I am looking for a way to make more cash since i cannot get into the stock market yet. I have tried setting up a few small businesses in the past and have come up with some great product ideas, but obviously none of them took off. I'm pretty much losing my motivation and I don't know where to invest my money. Working at minimum wage just doesn't cut it. It's ridiculous. You cant even buy a 12" subway combo for $8 CAD. Any ideas or suggestions? Thanks.

Best Answer

I'm not sure if this is a possibility in Canada but can you get an adult to open a Custodial Account for you? That way you can invest in the market and the money would stay in your name. Also don't discount 4% - that is not a bad rate! And after a little while of compounding you WILL be amazed at how fast it grows! All while you enjoy being 16!

I don't know much about them. By all means do elaborate, I would greatly appreciate it. ~Essence

Best Answer

Eric Tyson has written some very good beginner books in the Dummies series: Investing for.. Stock Market for ... and Mutual Funds for Dummies. I haven't seen their web site yet. Good web sites to learn include: Investing.rutgers.edu vanguard.com click on "go to site>>" then click on the Planning and Education tab. www.troweprice.com also has educational information

Besides Investing for dummies book.

Best Answer

I'd suggest you start with Fool.com [1]. They'll clue you in to the basics of investing, and show you ways to invest smaller amounts of money without drowning in fees. They also help you assess whether you're really ready to invest. For instance, if you still have credit card debt racking up double-digit interest, the interest you pay will almost certainly outweigh your investment income. So you're better off paying down your debts before investing. Assuming you have no debt, though, you're probably looking at either mutual funds (which often have a minimum investment of $500 or more) or Dividend Reinvestment Programs, or DRiPs [2]. DRiPs, and their cousins, Direct Stock Purchase Plans (DSPPs) allow you to buy stock directly from the company with little to no broker fees, using sites like Computershare [3]. Sites like Sharebuilder [4] provide a similar service, making purchases for you on a regular basis. They charge $4 for most trades, but offer far more companies and better support. Once you get $2,500 or so under your belt, you might want to consider getting into mutual funds or opening a discount brokerage account at somewhere like Ameritrade [5] or Charles Schwab [6]. Mutual fund houses like Vanguard [7] and Fidelity [8] have long histories and typically charge no fees to buy into their funds. This is a good thing, because it means all of your money goes to work for you, rather than some salesman taking 5% of your money off the top. If this is retirement money, bear in mind that many mutual funds and discount brokerages have little to no minimum investment to open an IRA.