Finance Rant

[girlwquestions]

I hate trading!!! It's so difficult. I don't understand how Ameritrade is "user-friendly" if it is FILLED with jargons...
I just hate finance!!!! How do they expect you to make decisions if you can't understand half the stuff you're reading???????
I have been meaning to get in on some stock trading action for months! but everytime I get on that website and want to place an order, then all the gazillion terms start coming at me (limit, stop limit, margins, supermontage...blah..blah..) and then I just close the site... and leave my money in my account untouched... Every time I look up one term, there's another one to look up!
ugh!!! HATE FINANCE!!!! :mad:

[KeepRockin]

i hear ya...i have a father who does it for a living and i don't understand a word of finance jargon.

i have a brokerage account. i don't even know what that means. :googly:

[jrwilheim]

Have you considered looking into mutual funds instead? If you're a first-time investor (as I gather from your post), I'm guessing you probably have only a small chunk of money to invest. You'd probably be better off with a mutual fund than in individual stocks, as your risk would be scattered among many more companies.

If you are just starting out, I would stay away from individual stocks as they are much riskier than the diversified portfolio you get with a mutual fund.

With a mutual fund, you also don't need to worry about understanding things like limit orders, stop limits, etc., as the portfolio manager does that for you.
You're essentially paying an expert to make the investing decisions for you.

[SunDevil]

I'm reading this book I bought at the bookstore right now.

http://www.amazon.com/gp/product/1580625703/sr=8-3/qid=1152679512/ref=sr_1_3/102-1974013-1056962?ie=UTF8

It is prtty good and will give you a basic overview.

If you see some terms, you can always look on-line for what it means.


One piece of advice is to use limit orders. The companies and brokers would rather you use market orders because it is simplier for them, but you get to set the price you want to pay with limit orders. You might miss some upswings though if you want to pay a lot less than the market price. http://www.sec.gov/answers/limit.htm

I don't get a lot of the jargon and tricks that the pros use. But, I will figure it out eventually.

[Umbra]

I love stock trading.

[Trillian42]

Have you considered looking into mutual funds instead? If you're a first-time investor (as I gather from your post), I'm guessing you probably have only a small chunk of money to invest. You'd probably be better off with a mutual fund than in individual stocks, as your risk would be scattered among many more companies.

If you are just starting out, I would stay away from individual stocks as they are much riskier than the diversified portfolio you get with a mutual fund.

With a mutual fund, you also don't need to worry about understanding things like limit orders, stop limits, etc., as the portfolio manager does that for you.
You're essentially paying an expert to make the investing decisions for you.

I agree, mutual funds are the way to go if you are just starting out. I learned all the basics on mutual funds from Yahoo finance, then I read Investing for Dummies for more specifics (I like to think a fall into the "A Reference for the rest of us" catagory :huge: ).

[CityGal]

I've been trying to get into the 'stock market' for a good while as well. How's Ameritrade working for you? I know that whenever I am fully ready I will definitely go with the TD people who I think run Ameritrade. How much did you start your account for? Any tips on what to do and not to do? A few years ago I thought I was ready and decided to get tons of books on the stock market so I could be prepared with the ins and outs. I have yet to pick one of those up.

I have looked at www.money.cnn.com. The information on that site is pretty good. So is Kiplingers. They both have information on the stock market for beginners.

[girlwquestions]

I already have mutual and index funds. My portfolio is pretty diversified, but it's just stock trading that gives me a headache.

I am just starting to use Ameritrade, CityGal, so I don't know how it is yet. I mean, I have had my account for months, but yesterday was my first order, because I used to get very frustrated with them...mainly because there are too many jargons that I don't understand. Anyways, my brother helped me place a limit order yesterday...

supposedly, it's very easy to use...I think it just takes experience for me. I have never taken a business class, let along a finance one, so it's all new to me. I do look up the meanings of words and do research, but finance is a whole different world to me still...I just hate it.

[junkanoo]

Have you thought about switching to Scottrade? It's very simple and user-friendly.

By the way, forget all the jargon... the only buttons you need to know how to use are the ones that say "Buy" and "Sell."

[labrat2111]

Have you thought about switching to Scottrade? It's very simple and user-friendly.

By the way, forget all the jargon... the only buttons you need to know how to use are the ones that say "Buy" and "Sell."

I use scottrade too and I'm not saying it is especially good but I find it easy to use. You have one tab that is labeled "trade" and you just go under that and either buy or sell and have the market (buy or sell at whatever the current market price is) and limit (specify a specific buy or sell price) orders so that is all you need to know to place an order for going long. Short selling and options are more complicated but you won't be doing them in the beginning (plus you need a good deal of cash and a margin account).

[KeepRockin]

my brother works in mutual funds and 401K's...i'm sure that once my career begins (soon!!!) and i have options like that, i'll utilize his expertise.

until then, the only finances i keep track of is my checking accout...i'll deal with the other stuff later. :rolleyes:

[labrat2111]

I've been trying to get into the 'stock market' for a good while as well. How's Ameritrade working for you? I know that whenever I am fully ready I will definitely go with the TD people who I think run Ameritrade. How much did you start your account for? Any tips on what to do and not to do? A few years ago I thought I was ready and decided to get tons of books on the stock market so I could be prepared with the ins and outs. I have yet to pick one of those up.

I have looked at www.money.cnn.com. The information on that site is pretty good. So is Kiplingers. They both have information on the stock market for beginners.

Well my first piece of advice when you get in is be careful because the market is brutal now and very volatile. I hate to admit it but I've been pretty beaten up in the last 2 months. I think I finally have some good picks but it will take time to repair the damage. Everyone in their books makes it look easy but the reality can be a lot different until you get the hang of it.

So my first piece of advice is to learn as much as you can before you dive in. I would recommend two books -- Jim Cramer's Real Money: Sane Investing in an Insane World and Phil Town's Rule #1.

Jim Cramer's book is good for a basic stock market overview and understanding some basics of trading/investing plus the economic cycle. Also he lays out some basic rules and commandments for trading.

Phil Town's book is excellent for understanding the basics of fundamental analysis (balance sheet, income statement, cash flows, moats, management, etc.) and also for the basics of technical analysis (MACD, moving averages, stochastics).

[jrwilheim]

Another suggestion: if you are interested in trading stocks, try paper trading first (not using real money). There are a lot of places on the Internet where you can do this as a game. I've been doing it on investopedia.com for a while. That will help you understand things like limit orders, stop loss orders, etc.

[girlwquestions]

Another suggestion: if you are interested in trading stocks, try paper trading first (not using real money). There are a lot of places on the Internet where you can do this as a game. I've been doing it on investopedia.com for a while. That will help you understand things like limit orders, stop loss orders, etc.

Good idea!

So...just to let you guys know...I am buying stocks, but I'm not looking to invest short term. I don't intend to buy and sell consistently. So, I will probably ride out the rough waters for a little while...at least a year or 2.... (well, depends on the market really)

[jrwilheim]

Good idea!

So...just to let you guys know...I am buying stocks, but I'm not looking to invest short term. I don't intend to buy and sell consistently. So, I will probably ride out the rough waters for a little while...at least a year or 2.... (well, depends on the market really)

You might want to look at what are called secular stocks (at least, I think that's the correct term). These are stocks of companies that sell things that people use regardless of how the economy is doing, like soda or band-aids (Coca Cola and Johnson & Johnson are good examples). Also look for stocks that consistently pay dividends as these tend to do better over the long term.

[SunDevil]

What are you trying to gain by having a stock account?

That is the first question. Do you not care about the money, and what to win big or lose big. For example, look at PLAY. THey used to make the chips for iPods. Then Samsung won the contract. That was 80% of PLAY's earnings. The stock price went from 30 to 10. There are theories that Apple will still need to use PLAY chips in a video touch screen iPod to be released some time in the future. In order to use Samsung chips, they would have to rewrite the operating system and go through the testing and debugging. Apple might not ever release this imagined iPod, or they might use Samsung chips after all. But that is an example of betting on risky stocks that could make you a lot of money, or lose a lot. It could go down to $5, or it could go to $20.

You also have to do a lot of research into these companies. And get lucky.

I owned Intel and had to sell it for a loss at 25, and I bought it 5 months prior at 26.5. That was in December 05. Now INTC is in the high teens. Nothing about their business really changed though. AMD gained a lot of ground, but INTC is still the big company. So, therre really are no safe stocks anymore. JNJ (and healthcare in general) is all over the place. Most of the big stocks shouldn't move a lot in any direction though.

The reason mutual funds are what people say to use is that unless you are very risky and only buy 1 or 2 stocks, you won't be able to gain enough to offset your losses. Let's say I used $6000 (40% of my account value of $15k) to buy 600 shares of PLAY at $10/share. If it goes to $20, my account will be worth $21k. After taxes, it will be $19k. A 23.33% gain. Not bad. But, if I had other stocks that didn't do as well, it might offset that gain. There are plenty of stocks like KRY that have halved in price in the last two months. In the big sheme of things, you will probably never put all your money on one stock, and getting rich in the market using a few thousand dollars is next to impossible. But, it is good to understand it still.