Want to learn about Stock Investment - where do I start??

[Gilroy]

Hi all,

 

I am very interested to learn about Stocks, Options, Shares, Investment etc. But I usually find it difficult to learn and understand due to all the tech jargon being thrown around... Can any of you recommend a good and easy to understand source (web link or book)??? I really want to invest in stocks but do not wish to do so unless and until I am sure of what I am doing.

 

Thanks guys!

[BriarRose]

I have only just begun learning about this myself. I have been watching Jim Cramer's show "Mad Money" on CNBC. I like him a lot. You can go to their website, too and look him up. All kinds of stuff on there.

[Gilroy]

I have only just begun learning about this myself. I have been watching Jim Cramer's show "Mad Money" on CNBC. I like him a lot. You can go to their website, too and look him up. All kinds of stuff on there.

 

Thanks Misskitty.

 

I need to learn about Stocks from the ground-up.. fundamentals. I have very very basic knowledge and would like to improve it. To the point where I can buy and sell stocks and make profit.

[turnera]

Look for your local community college. Many teach non-credit classes in things like that.

[capilot]

My opinion: run far away.

 

Long ago, I realized that the lottery was a scam to take money from poor people and give it to the rich and middle class.

 

More recently, I came to the conclusion that the stock market is a scam to take money from the middle class and give it to the rich.

 

They tell you that the stock market has an average return of 10%. Sure, it has its downturns, but it also has its upturns, so as long as you're willing to stick with it and not panic, you'll do all right in the long term.

 

But consider this scenario: You have $10,000 in savings and $100,000 in the stock market. Rich man has $100,000 in savings and $1,000,000 in the stock market.

 

Next, we have an economic downturn. Now you have $10,000 in savings, $50,000 in the stock market, and no job. Rich man has $100,000 in savings and $500,000 in the stock market.

 

You still have a mortgage to pay. After a few months, your savings are gone. Pretty soon, you're forced to cash out of the stock market and take your loss. Rich man buys your stock. Now he has $550,000 in the stock market and you've got nothing.

 

Eventually the economy recovers. You now have a job again, and a little money in savings (because you sold your stock), and nothing in the stock market. Rich man now has some money in savings and $1,100,000 in the stock market.

 

Stock market even shows the 10% gain you've heard so much about. You now have nothing in the stock market, and Rich Man has $1,200,000 in the stock market.

 

So yes, the stock market did appreciate 10%, but you're not the one who received the benefits. Your 50% loss on $100K and his 20% gain on $1M average out to +10%.

 

I once heard a radio special about professional poker players. They live in Las Vegas and play poker against each other for a living. But if they're just playing against each other, where does the profit come in? How do they actually make money?

 

The answer: Occasionally, outsiders from out of town will come in and try their hands against the pros. They lose generally, and go home broke. This is known as "feeding the game".

 

Well that's how the stock market works. It's a bunch of rich people playing poker against each other, and occasionally we middle-class suckers join in and feed the game.

 

During the dot-com boom of the end of the 90's, my stock options briefly made me a millionaire. I never got to enjoy it because the crash of 2001 came and wiped me out flat. I started over, and now I get to watch my retirement savings depreciate 10%/month in the current crash. I'll be moving over to bonds in the next few weeks. Of course, I'll take a huge loss in the market, and some Rich Man will benefit, but at least I've realized that the only way to win is to not play.

[Gilroy]

wow, thanks a lot for the detailed post Capilot!

 

You obviously have lot of experience with stocks and I am just a novice trying to understand how it works

[FathomFear]

Before diving into stock trading you need to ask a more fundamental question first. And that is "What are your investment objectives?"

 

Do you want to see your money grow in 1-5 years? 5-10? 10-15? When do you need the money? What kind of return do you need? What is your risk tolerance?

 

Just by answering these questions you might find out that stocks are not for you.

[Someday_Soon]

There are many online resources that will help you learn the in's and out's of stock market investing. Just remember, no matter what, never EVER invest more than you can afford to lose. Today's stock market is very gun shy, meaning investors are quick to sell stocks when bad news hits the market...for example the Greece bail out.

 

I use TD Ameritrade. It is pretty easy to use and has a tutorial section to teach you just about everything you need to know.

 

If you have any specific questions feel free to PM me.

[FathomFear]

But consider this scenario: You have $10,000 in savings and $100,000 in the stock market. Rich man has $100,000 in savings and $1,000,000 in the stock market.

 

Next, we have an economic downturn. Now you have $10,000 in savings, $50,000 in the stock market, and no job. Rich man has $100,000 in savings and $500,000 in the stock market.

 

You still have a mortgage to pay. After a few months, your savings are gone. Pretty soon, you're forced to cash out of the stock market and take your loss. Rich man buys your stock. Now he has $550,000 in the stock market and you've got nothing.

 

So wait--in this scenario a person has $10,000 in savings and "after a few months" the savings are "gone"? That's quite a bit of spending in a few months...

 

In any case, it goes without saying that people make very common mistakes when investing. You should always have a reserve fund and contingency plans in place to avoid having to sell stocks which you are holding for the long term. You can't see your stocks as a savings account, because they aren't. But if you do that, then there's no doubting that you will inevitably get burned.

[Gilroy]

Before diving into stock trading you need to ask a more fundamental question first. And that is "What are your investment objectives?"

 

Do you want to see your money grow in 1-5 years? 5-10? 10-15? When do you need the money? What kind of return do you need? What is your risk tolerance?

 

Just by answering these questions you might find out that stocks are not for you.

 

Basically I am tired of living paycheck-to-paycheck. How long am I going to go like this? My job helps me live a decent life and pay my bills but I can never build wealth this way. Plus I still live in an apartment...

[Anthropic]

Here's a link to basic info in nice bite size chunks: link removed

 

There's some good stuff in there, and I think it's a pretty good jumping off point.

 

My advice is to first get your finances in order, clear debts, build savings, build an emergency fund (most people say 3-6 months worth of living expenses). Then start on retirement savings and investments, and then finally save for stock investing. Picking individual stocks should be one of the last things you do, it is not easy. There are lots of other investment options you should explore before dipping into stock picking.

[Gilroy]

Here's a link to basic info in nice bite size chunks: link removed

 

There's some good stuff in there, and I think it's a pretty good jumping off point.

 

My advice is to first get your finances in order, clear debts, build savings, build an emergency fund (most people say 3-6 months worth of living expenses). Then start on retirement savings and investments, and then finally save for stock investing. Picking individual stocks should be one of the last things you do, it is not easy. There are lots of other investment options you should explore before dipping into stock picking.

 

Thanks Anthropic.

 

I am regularly paying my credit cards in order to become debt free. Plus I allocate a percentage of salary for 401-K (retirement savings).

 

Is there a difference between Savings and Emergency Funds?

[Anthropic]

Is there a difference between Savings and Emergency Funds?

 

Well, emergency funds are technically savings, but you only use it in emergencies. It's just that extra cushion if things completely fall apart. I guess people talk about it separate from savings because it's easier to not spend it when we label it "emergency fund". I keep my emergency fund in it's own bank account.

[capilot]

So wait--in this scenario a person has $10,000 in savings and "after a few months" the savings are "gone"? That's quite a bit of spending in a few months...

 

I live in Silicon Valley where housing is very expensive. Between mortgage and other mandatory expenses, I was draining my savings at about $3000/month. Even with unemployment, I was flat broke and deeply in debt in four months.

 

If I hadn't gotten a new job when I did, I would have had no choice but to start selling my stock at a severe loss.

 

I wouldn't say I'm an experienced investor, because if I was, I probably wouldn't be getting wiped out every few years like I do.

[GoneCrazy]

Bro if you think you'r gonna pick up some books and read up on the stocks investing and in mons or years you'll be making cold hard cash...well it aint gonna work that way.

 

I was like you then reality set in there is so many b.s sayings and it will leave you more confused. And the people do making the million already have the millions to invest.

[Gilroy]

Bro if you think you'r gonna pick up some books and read up on the stocks investing and in mons or years you'll be making cold hard cash...well it aint gonna work that way.

 

I was like you then reality set in there is so many b.s sayings and it will leave you more confused. And the people do making the million already have the millions to invest.

 

I am just looking for some help to learn about Stocks and Investing... that is all.

[capilot]

Bro if you think you'r gonna pick up some books and read up on the stocks investing and in mons or years you'll be making cold hard cash...well it aint gonna work that way.

 

I was like you then reality set in there is so many b.s sayings and it will leave you more confused. And the people do making the million already have the millions to invest.

 

AND they have dedicated stock brokers, AND they have access to information you don't have, AND because they're rich clients, their brokers give them special deals, AND they have access to insider information.

 

I don't think it's possible for middle-class people to win at the stock market when playing against the pros.

 

If the market goes up, everybody wins, but rich people win more. If it goes down, everybody loses, but rich people lose less. In the long run, we're broke and working in their factories.

[Anthropic]

You are not competing against the pros. It isn't about how much other people win or lose, it only matters that you win. Even if it's a small win. Forget what the rich people are doing, forget what the poor people are doing, do what's best for you. Learn discipline and patience with your money, those are key attributes. Knowledge is power here, read lots, and you'll discover that it's really not all that hard to put in place a decent financial plan for yourself (and stock investment is only a part of it, possibly a small part).

[GoneCrazy]

I am just looking for some help to learn about Stocks and Investing... that is all.

 

In one of you'r other posts you said you were tired of living pay-check to pay-check and it sounds like you'r looking for something that will make you easy money and you think the stock market is the way to go.

 

Plus personally i don't see the point of learning something if your not gonna use it, sure its good to know but if you aren't gonna use it how long do you think you'll remember it all. But thats just me.

 

AND they have dedicated stock brokers, AND they have access to information you don't have, AND because they're rich clients, their brokers give them special deals, AND they have access to insider information.

 

I don't think it's possible for middle-class people to win at the stock market when playing against the pros.

 

If the market goes up, everybody wins, but rich people win more. If it goes down, everybody loses, but rich people lose less. In the long run, we're broke and working in their factories.

 

lol those help also. I agree with you 100% these big high rollers have a team when it comes to investing, and if they lose some money its not a biggy they can always make it back thanks to the interest off of the money from the banks.

 

And yes we our the back bones of the rich.

[Gilroy]

You are not competing against the pros. It isn't about how much other people win or lose, it only matters that you win. Even if it's a small win. Forget what the rich people are doing, forget what the poor people are doing, do what's best for you. Learn discipline and patience with your money, those are key attributes. Knowledge is power here, read lots, and you'll discover that it's really not all that hard to put in place a decent financial plan for yourself (and stock investment is only a part of it, possibly a small part).

 

Thanks for your post.

 

I started this thread to get some information about learning Stocks but most of the posts have been very discouraging. My goal is to learn about Stocks and invest a little bit and see how it goes. If I can make some money out of it that would be in addition to my paycheck. But the majority of the people are giving a very negative picture and repeatedly saying that it is only for the rich. If rich people continue to get rich and poor people continue to get poor then how come so many aspirants have made it here in the USA, the land of opportunity?