Any Smart Financial People Here? Anyone Own Stocks?

[TMagic]

So I'm 21 years old. I always have times come up where I really want to buy some stock. You know, have my money actually make me money.

Right now I'm thinking, "I spend my money on other crap. Why not spend it on something that can make me even more money."

I want to know how do you go about and do that?

Do you just go to the bank and say you want to buy so many shares of so-and-so, and a couple of shares of so-and-so?

Do you have to go to someone other than your bank?

Is the price of a stock, the exact same price you would see if you looked it up on google/yahoo/etc?

Is the price of a stock you see, the EXACT price you will pay? Say I google Microsoft, right now it's at about $20.75. If I let my bank know that I want stock in Microsoft, will I be paying $20.75 for each stock?

Can you buy/sell online?

How EXACTLY do you make money off of a stock?

What is your experience with stock?

I'm just a young man trying to be smarter with my money now, rather than later. I don't want to be one of those saying, "Dang, I wish I would have went ahead and bought stock in them when I had the chance."

[larrygiterdone]

Re: Any Smart Financial People Here? Anyone Own Stocks?

So I'm 21 years old. I always have times come up where I really want to buy some stock. You know, have my money actually make me money.

Right now I'm thinking, "I spend my money on other crap. Why not spend it on something that can make me even more money."

I want to know how do you go about and do that?

Do you just go to the bank and say you want to buy so many shares of so-and-so, and a couple of shares of so-and-so?

Do you have to go to someone other than your bank?

Is the price of a stock, the exact same price you would see if you looked it up on google/yahoo/etc?

Is the price of a stock you see, the EXACT price you will pay? Say I google Microsoft, right now it's at about $20.75. If I let my bank know that I want stock in Microsoft, will I be paying $20.75 for each stock?

Can you buy/sell online?

How EXACTLY do you make money off of a stock?

What is your experience with stock?

I'm just a young man trying to be smarter with my money now, rather than later. I don't want to be one of those saying, "Dang, I wish I would have went ahead and bought stock in them when I had the chance."

you make money off a stock by buying low and selling high, however its usually a crapshoot and even the people who claim to know how to make you money off of stocks really have no idea

[TMagic]

Re: Any Smart Financial People Here? Anyone Own Stocks?

you make money off a stock by buying low and selling high, however its usually a crapshoot and even the people who claim to know how to make you money off of stocks really have no idea

Alright, so what makes stocks become high? Lots of people buying them? Or the company doing well with sales?

[BTB]

Re: Any Smart Financial People Here? Anyone Own Stocks?

you make money off a stock by buying low and selling high, however its usually a crapshoot and even the people who claim to know how to make you money off of stocks really have no idea

I dunno about that... but anyway in today's market it's very tough for anyone to make money unless you are just a really good day trader. This means you literally sit there all day buying and selling and watching technical indicators. Many professional money managers are down huge in the last year, only the best have made any money. If you want to get in for the long term, some think the financial companies are very undervalued right now but you need to decide that for yourself. I wouldn't recommend getting into the market at this time, but it's definitely a good time to learn. Start reading articles on www.wsj.com, finance.yahoo.com, marketwatch, etc. Watch CNBC too, can't hurt. This will help you get familiar with finance jargon and then you will be one step closer to understanding how to allocate your money.

[BTB]

Re: Any Smart Financial People Here? Anyone Own Stocks?

Alright, so what makes stocks become high? Lots of people buying them? Or the company doing well with sales?

There's a ton of things that impact a stocks price, but the overall thing that matters is supply and demand, just like any other product. If lots of people are trying to sell, the value of the stock goes down, and if lots of people are trying to buy, the value goes up. What impacts the supply and demand is a whole other discussion, and there are a billion factors (like you said, company meeting or missing earnings targets, litigation, economy, natural disasters, anything that can affect a company's operations). A stock price is basically a reflection of investors perception of the future value of a company. The number of shares outstanding multiplied by the price gives you the market cap, which is overall value of the firm relevant to the stockholders (also known as equity holders).

[BTB]

Re: Any Smart Financial People Here? Anyone Own Stocks?

Another great site is www.investopedia.com

[TMagic]

Re: Any Smart Financial People Here? Anyone Own Stocks?

I appreciate your input BTB.

So, you only make money if you sell stock?

I didn't know if because you bought stock, you were part owner of the company. And if the company made money, you would get a small part of the profits as well. Like, if I owned a share of Nike, then I bought some shoes, would I be making a small amount of money of the shoes I just bought?

Or again, it's only if you sell your stock?

As you can see, I really am a novice when it comes to this.

[vinny]

Re: Any Smart Financial People Here? Anyone Own Stocks?

On occasion you might get a dividend if the company doesn't reinvest all of its profits but it's usually a small amount.

[TMagic]

Re: Any Smart Financial People Here? Anyone Own Stocks?

On occasion you might get a dividend if the company doesn't reinvest all of its profits but it's usually a small amount.

How do you know if a company does that or not? And do a lot of companies do?

So if you have all these people buying from a company, wouldn't it add up over the long run even if it is a small amount?

[TMagic]

Re: Any Smart Financial People Here? Anyone Own Stocks?

I was also wondering if you can buy and sell online? Or in general, who do you have to go through?

[vinny]

Re: Any Smart Financial People Here? Anyone Own Stocks?

I was also wondering if you can buy and sell online? Or in general, who do you have to go through?

Here are a few online brokers http://www.stocktradingtogo.com/2007...stock-brokers/

[TMagic]

Re: Any Smart Financial People Here? Anyone Own Stocks?

I dunno about that... but anyway in today's market it's very tough for anyone to make money unless you are just a really good day trader. Many professional money managers are down huge in the last year, only the best have made any money. I wouldn't recommend getting into the market at this time.

Again, I don't know much about stock. But to me, it would seem like it would make more sense to buy now as the stocks look like they are super cheap. Then just wait it out, until the stocks climb back up again.

[fishepa]

Re: Any Smart Financial People Here? Anyone Own Stocks?

In my opinion there is no point in buying stock unless you are buying a large amount (thousands of $). The commission fees you are charged make it that much harder to make any money.

[Trevytrev11]

Re: Any Smart Financial People Here? Anyone Own Stocks?

I appreciate your input BTB.

So, you only make money if you sell stock?

I didn't know if because you bought stock, you were part owner of the company. And if the company made money, you would get a small part of the profits as well. Like, if I owned a share of Nike, then I bought some shoes, would I be making a small amount of money of the shoes I just bought?

Or again, it's only if you sell your stock?

As you can see, I really am a novice when it comes to this.

You are correct in the fact that as a stock owner you are technically a partialowner (a very, very small owner) of that company. However, not all companies pay out dividends to their stockholders...many do not. Some guarantee a dividend, others decided on an annual basis and others never. These decisions are typically made by the members of a companies board of directors.

Typically you will go through some sort of brokerage/investment firm for your investing (Charles Schwab, Prudential, Fidelity, etc.). There you put in your orders to buy and sell. These orders will also involve transaction fee's. You may pay $10+ per trade, so if your going to start out small with $500 and buy Microsoft at $20 share, you can buy 25 shares, plus pay the $10 fee. Just know that right off the top, your giving away a %. There are also many online companies you can go through (e-trade, etc), where you can buy/sell online.

My advice for a beginner would be to start off investing in companies you are familiar with or whose products you use on a regular basis. Do your research. Understand their Income Statements, Balance Sheet's and Cash Flow statements. Listen to their quarterly earnings calls and try to get your best feel for the company.

If your looking for some short term investments, set yourself limits. If you buy at $20, is your goal to get out at $22? $25? $30? What is realistic. What if it drops? Do you get out at $15? Let it ride? etc.

If your looking long term, go with companies you know you can trust and believe will be stable for a long time to come. With the market in the state it is, there may be a lot of steals out there, but there are a lot of gambles as well.

You may also want to look at mutual funds. These are basically funds set up often with goals in mind. They often invest small %'s in many companies often in several industries in order to stay diverse and minimize risk. There are agressive funds, stable funds, funds that mimmick the S&P, etc.

Start out small, learn how things work and then go from there. Don't expect to double your money in a month. If you go in with that expectation, you will likely be dissaspointed. Also know, that in the short term, things can change a lot, very fast. If you have been monitoring the market for the last few months, you'll have seen swings from day to day that really make no sense. Be prepared for those right now.

[callmetaternuts]

Re: Any Smart Financial People Here? Anyone Own Stocks?

You can buy stock online through scott trade, e-trade and other online broker dealers. Or you can go to a brick and mortar firm like Merril Lynch, AG Edwards etc. There you will open an account and have a financial advisor. Odds are, if you dont have alot of money, you wont get alot of their time (they are in the money making business).

I currently work at a big time brokerage firm in the Compliance field. Just an FYI

There are 238490248 of factors that affect stock prices, sales, earnings, debt, projections, public opinion are just a few. Hedge funds (large money operations) can make prices fluctuate, you and i buying 100 shares wont affect a thing.

The prices you see on Yahoo or Google are usually delayed by 20 minutes. But you can place an order to buy at a certain price. If the stock gets to that price, you buy, if it never makes it there, you dont (called a limit order).

You pay commissions on purchases/sells. That varies by the broker you go with.

If you plan on buying and holding for a long time, do some research, and mutual funds might be a better way to go for someone looking to sit and wait.

Any other questions? or more specific questions?