Newbie investing in individual stocks
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Newbie investing in individual stocks
Posted by Jwodie on 2/12 at 5:21 pm
I'm looking to start investing in individual stocks. Someone please break this down to me like I'm 10 years old. A few specific questions too, naturally:

What is the best online site (i.e., E-trade, etc.) to use to purchase shares of individual stocks?

What is a reasonable fee to incur for stock purchases?

Do you recommend using a live broker or are online sites simplistic enough for a first-time stock purchaser?

Really any general advice from the MB is appreciated.



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Posted by tetu on 2/12 at 6:08 pm to Jwodie



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Posted by jso0003 on 2/12 at 6:13 pm to Jwodie
Online sites are plenty simple enough to buy and sell individual stocks, but you'd be much better off doing some reading about the market and deciding against investing in individual stocks.(recommend a book like "a random walk down wall street")


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Posted by foshizzle on 2/12 at 6:42 pm to Jwodie
quote:

I'm looking to start investing in individual stocks.


Don't. Buy shares in a retirement index fund and read up.



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Posted by Maniac979 on 2/12 at 6:46 pm to Jwodie
(no message)

This post was edited on 2/15 at 9:30 am

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Posted by LSUTigers00884 on 2/12 at 6:48 pm to Jwodie
quote:

Individual stocks
quote:

Newbie


Don't go together. It takes a lot of time to be able to invest into stocks. Look at mutual funds.



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Posted by Maniac979 on 2/12 at 6:49 pm to LSUTigers00884
(no message)

This post was edited on 2/15 at 9:31 am

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Posted by LSUtigerME on 2/12 at 6:55 pm to Maniac979
quote:

Stay out of individual stocks. Look at ETFs.


Good advice. I'm going this route, although I do have a fair amount of individual stocks. However, these are all long buy and hold type stocks for me, most with dividends. I have no intention to "day trade".

As for the online sites, they are very easy to use. It really comes down to features and cost depending on number of trades. Most are pretty similar. I personally use sharebuilder because it has $4 automatic trades (only on Tuesdays), no minimum, free dividend reinvestment, and instant transfers with Capital One.



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Posted by Jwodie on 2/12 at 7:11 pm to LSUtigerME
I don't understand the consensus advising not to purchase individual stocks whatsoever. I'm not looking to "day trade", merely diversify my current assets, which consist nearly entirely of a 401k and liquid savings. Hypothetically speaking, If I want to throw some extra capital into an individual stock such as GE, Exxon or even Apple, with a goal of holding for a while, why is that not advisable...?


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Posted by gatorsimz on 2/12 at 7:29 pm to Jwodie
quote:

Hypothetically speaking, If I want to throw some extra capital into an individual stock such as GE, Exxon or even Apple, with a goal of holding for a while, why is that not advisable...?


I say go for it. People say to buy an index or ETF because they have historically outperformed those trying to pick individual stocks. I own mutual funds, ETFs, and individual stocks. Just do your due diligence on the company. I'd start by investing in a mature megacap like those you've mentioned. Good luck.


This post was edited on 2/12 at 7:32 pm

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Posted by OFWHAP on 2/12 at 7:39 pm to Jwodie
quote:

Hypothetically speaking, If I want to throw some extra capital into an individual stock such as GE, Exxon or even Apple, with a goal of holding for a while, why is that not advisable...?


If you REALLY want to, then do it. However most people suck at picking individual securities. Even among professional fund managers (who are supposed to be expert investors), around half tend to underperform the market.



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Posted by Rockyn on 2/12 at 9:18 pm to gatorsimz
quote:

Just do your due diligence on the company.
Why bother with any diligence? The market has infinitely better resources than the amateur investor (and 99% of MT's resident pickers), and even if that wasn't the case, what's he going to do with any piece of information, be it a quick ratio review or qualitative news piece, that the market didn't price in effectively light-years ago?

If he's set on equity exposure via stocks then more pragmatic advice is realistically for him to throw a diversified set of darts and work his way from there.


This post was edited on 2/12 at 10:05 pm

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Posted by RickAstley on 2/12 at 9:44 pm to Jwodie
I am in identical shoes with you. One year out of college, with only 401k and savings holding all of my earnings outside of expenses. I will be paying attention to your threads

//Edited to correct myself.


This post was edited on 2/13 at 8:11 am

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Posted by Jwodie on 2/12 at 9:57 pm to RickAstley
quote:

I am in identical shoes with you. One year out of work, with only 401k and savings holding all of my earnings outside of expenses. I will be paying attention to your threads




Gotta start somewhere, right? I just don't understand the consensus advocating against investing in a few individual established stocks I feel are strong enough to at the very least sustain their value and hopefully steadily grow. In addition to throwing some dollars at some prospective stocks with large growth potential (medical marijuana for example). Diversity is key, but investing in stocks should be "fun" as well of course while being aware of your tolerance for loss.



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Posted by AUtigerNOLA on 2/12 at 10:13 pm to Jwodie
Its hard to make money on individual stocks unless you really have some great knowledge of the particular industry you are looking in. You have to be on top of stocks too. Always look at the balance sheet and income statements. Pay attention to the debt, cash, and revenue. Determine if there is growth. It takes a little time.

One stock I would suggest looking at right now is RF. Big bank, low stock price. They have been consistently outperforming the estimates by analysts the past year or so. They have a good thing going right now and it won't stay in the single digits(cheap) for long IMO. I really think it could potentially get into the normal bank range(20s and 30s) over time. Do some research and good luck.



This post was edited on 2/12 at 10:21 pm

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Posted by Jwodie on 2/12 at 10:17 pm to AUtigerNOLA
quote:

One stock I would suggest looking at right now if RF. Big bank, low stock price. They have been consistently outperforming the estimates by analysts the past year or so. They have a good thing going right now and it won't stay in the single digits(cheap) for long IMO. I really think it could potentially get into the normal bank range(20s and 30s) over time. Do some research and good luck.




This is a perfect example of an "individual" stock I'd like to throw some money into...



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Posted by matthew25 on 2/12 at 11:22 pm to Jwodie
I've owed RF (former Union Planters, former Magnolia Federal) for many years. Up to $35 per share, down to $3 per share. At just under $8, hoping it gets bought out by one of the big'uns.


How many shares of Apple are you buying?



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Posted by alabamabuckeye on 2/13 at 6:45 am to Jwodie
If you're not going to day trade and want a hands-off investing experience, do not invest in individual stocks. ETFs are doing well, and I would also look to European equities for returns, if possible.


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Posted by gatorsimz on 2/13 at 7:56 am to Rockyn
quote:

Why bother with any diligence? The market has infinitely better resources than the amateur investor (and 99% of MT's resident pickers), and even if that wasn't the case, what's he going to do with any piece of information, be it a quick ratio review or qualitative news piece, that the market didn't price in effectively light-years ago?


I would agree if the OP intended to actively trade stocks but he's looking to buy and hold. Since he's looking to invest and not trade, due dillegence is important. Nobody should jump blindly into a long term investment.



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Posted by AUtigerNOLA on 2/13 at 11:07 am to matthew25
quote:

I've owed RF (former Union Planters, former Magnolia Federal) for many years. Up to $35 per share, down to $3 per share. At just under $8, hoping it gets bought out by one of the big'uns


You must of been holding on to RF since before 2006, when AMSouth merged and became Regions. Yes RF tanked after 2008 along with the majority of banks. I am sorry for you loss

They have new leadership now and recently sold off their brokerage firm(Morgan Keegan). It got down to as low at $2.80 before picking up steam at the end of 2011. Banks do usually get bought out in the single digit ranges but I dont feel like RF will get sold to anyone, just MO. If one of the big banks decided to and deal gets worked out, it would be by far a top 5 largest bank and biggest player in the southeast. Doubtful though I think Regions will start making a comeback now.


This post was edited on 2/13 at 11:09 am

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