Stock Gurus, I have some questions.

[compuwiz1]

Being relatively new to stock trading, and assuming I wanted to consistently invest $500 per month in promising stocks, what to do?
What about e-trades? What would you invest in at this very moment? Please discuss only legitimate and legal ventures in this thread. I realize $500 probably won't take one far, but it's got to be better doing something other than collecting what banks pay. I'm starting to believe the name of the game is not necessarily about how much one earns, but how they manage and invest what one earns.

 

[Crystal Bay]

Hey CWK,
Now is a good time to start dollar cost averageing. Ameritrade is also a
good site

 

[HorB]

IMO, you should buy a good mutual fund and sock that $500 a month away. In a year or too you will have enough to start dabbling in individual stocks. Good luck!

 

[piku]

Yes, from what I know (which should be nothing considering im 16 ) you should go with a mutual fund. It is a long term investment though, so dont expect to cash in the next day, but in 2-5 years maybe you could really make some money.

If you want to try individual stocks, go ahead with E*Trade or the other online brokers and try picking some good stocks (do some research or just pick some of your favorite companies and hope for the best! ). Just remember though that with online brokers, when you hit the sell or buy button its not instantaneous, so it may be minutes (acctually im not sure of the exact times) before you acctually sell or buy the stock, which could be perhaps a difference of a few cents a share, if not up to a dollar maybe in extreme cases.

 

[Lvis]

Peter Lynch has written a couple of good books, very easy reading. They are available in paperback and I would highly recomend them.

 

[Looney]

$500 isn't enough for you to play the stock market.. you'll need at least 10 times that much to really do it effectively.

Like HorB said, mutual funds would be better for you... less exciting then playing online stocks... but how excited will you get off $500 anyways? Plus, if you read up on some of the opinions and analysis of online trading, you'll see that more ppl lose then win (A LOT more). It's day trading, but a lot more amatuerish, and day trading is extremely risky as it is (and a lot of day traders have mentors and advisors too).

 

[Hyper99]

At etrade you can also have a fake account
with fake money say 100,000, playing this give you an ideas
of how it works.
If you are really good at it, every month 1,000 dollars is given
a way to the best player.
Some have racked up as much as 10 million in one month period
I say that is unbelievable playing the stock game on etrade.

 

[Michael]

I seriously suggest that you go to http://www.fool.com and read the investor education area (the specific stock discussion groups are full of rumours and such).

Another great source of information is http://www.vanguard.com

I know it isn't popular advice, but if you really are inexperienced, I suggest getting a financial advisor (fee based only, not paid by commission) or using a full service brokerage. It will cost more in the beginning, but you might be able to avoid costly mistakes as well.

Many good companies will help you build a financial plan for free (and then try and sell you their products, which you do not have to buy).

The Peter Lynch books are good (I liked _Beat the Street_).

Other than giving you general advice to get more educated (like the advice above), I could not give you more specific advice without sitting down with you and getting to know what your goals are and what assets and liabilities you have.

Michael, CA (<-that's Chartered Accountant, Canadian title that equals CPA, I live in the US right now)

ps - I can tell you that I use Waterhouse Securities as my broker (http://www.waterhouse.com), but I used a full service broker for a coople of years when I first started out.