Stock Market/Online Trading

Interested in setting up an online stock market investment account through someplace like Scottrade or a similar site, maybe with an initial investment of $1000 or so. I honestly don't know jack about the stock market, other than some simple basics. If you have any experience in this area, I'd appreciate some advice including some decent reading material and any personal experiences you have with online brokerage firms, as well as anything else you have to share.

Thanks.

You might want to consider getting into mutual funds. There are many different funds that have different philosophies. THey might seek to increase value, they might follow a specific Index such as the Dow Jones or might be very safe and invest in money markets or bonds.

If you are not very experienced, it is a good choice.

just my .02

If you really want to go individual stocks, I've been really happy with Scottrade because of the fixed $7 commish even on limit orders (Don't use anything except for limit orders, market is for schmucks).

I do agree with the mutual fund suggestion though, it's a little easier if you don't have time to dedicate to researching companies on a weekly basis. I like Fidelity but my favorite fund, Contra is now closed to new money. Another one I have is Morgan Stanley Emerging Markets 34% YTD return but risky.

Anyone or anyplace that tells you there's an easy, simple way to trade stocks is lying to you, plain and simple. As to books - I've got cases and cases filled with books that have been useful to me.

Start with funds (fund an IRA/Roth IRA), follow the market, find a couple companies that interest you and study the hell out of them - not just the business, but the valuation. I can't really get into specifics just for compliance reasons.

Unlike everyone else, I am going to assume that you are a bright person who just hasn't learned this yet. I say go for it (after some reading/research). It is the best way to learn, and, according to several studies, the only way to beat the market over the long haul.
I strongly recommend starting with The Motley Fool <www.fool.com> The free portions of their website has a ton of beginner education, and, you can sign up for their expensive recommendation services free for a month.
Here's what I did. I took all my old 401ks and rolled them over into an IRA. All my new retirement investments goes into my current 401k. I would sign up for one of the Fool's premium services, download all the monthly reports in PDF, read everything I could in that month, then cancel. I went through all the premium services, then invested my IRA.
Good luck,
Jeremy

My opinion - I've read more bad advice than good on the Fool.

we retired early and my income is solely from 401K/IRA.

Be real careful with stocks or u will lose ur azz.

Mutuals can give you a consistent income but most have a $2500 minimum investment. If u sign up with Fidelity buying/selling their funds is free and there are "sector" funds if you want to invest in one type of business.

Just setting aside a few thousand to play with is one thing, but don't expect to make money; it's like going to the casino.

I'm assuming from your initial post you are not interested in funds, etc., but are interested in learning how to trade infividual stocks with some spare cash. I've been doing this for years, and it has been quite rewarding.

The bottom line is, your question is a huge one without a single answer. Trading styles are as varied as the people doing the trading, and what works for me likely won't work for you. There's just way too much psychology involved for one size to fit all. You'll have to do a lot of reading, studying and getting your arse royally kicked in to find your fit. Are you a day trader? A swing trader? A trend trader? A breakout trader? Is this all voodoo and you need to do fundamental analysis? Something else? What out of all the information available to you are you going to use to make buy/sell decisions once you've settled on a plan of action? How much time can you spend on scanning charts, researching earnings reports, etc.? You'll figure this out along the way. This is far, far from the "get rich quick" plan they promise on late night television, but it's fun

I've read just about one million books and web sites on the subject. The one constant is there is good and bad in just about every source of information (and "good" and "bad" is also often subjective). My advice would be to go to a book store and pick up a book or two that look interesting, probably focusing on how the market works to start, moving towards explanations of the different trading styles next. Check out web sites such as Clearstation.com. Then, once you've gained some level of knowledge about what you're going to do (assuming you haven't lost interest), take some fun money and dive in. Paper trading is probably a good idea for a short time just to see how the whole thing works, but is fairly emotionless. You'll need some skin in the game to make real progress. Learning to lose your own money is a big part of the game.

As for brokers, Scottrade is fine. I dumped them after trading side-by-side with Schwab and getting horrible fills, but that won't be a huge issue for you at this point. The price is right.

If you start with $1K, consider it tuition for your first semester and kiss it goodbye. Maybe you won't lose it, but maybe you will. If you can't stomach the thought of losing it, learning to trade stocks is the wrong choice at this time, plain and simple. In my opinion, $1K is really too small of a bankroll to make a real go of it, but you can at least see how it feels to "win and lose" on a daily basis. You'll have to stick to very small stock prices.

Good Luck

I used to trade individual stocks for fun, but I lost interest. Its more fun playing poker with the guys than gambling on stocks. If its not gambling, then its something you have to take seriously. If you take it seriously, then you have to do everything BrewBrain says in the previous post.

I tried taking it seriously for a while, then it occured to me that there are legions of professionals on Wall Street doing the same thing. What can I possibly uncover that was not known by 10,000 other people days ago?

So, now I max out my 403(b) every month and forget about it. My retirement portfolio consists of 5 low-cost index funds. I rebalance once a year or so. We have a few after tax funds and an IRA but nothing fancy (no loads, low fees).

So, I know this doesn't answer the OP's questions, but here it is anyway.

Mutual funds are definately another option. My reason for bring up stocks was that I was talking to a guy at work. He bought a set amount of a certain stock every pay day, back when it was about $20 a share. He did this for a year or so, and stopped buying when it started going up in price. Now, a few years later, the same same stock is almost $70 a share.

I understand that stock trading is not a get rich quick thing, but would like to invest in a few stocks that might have a potential of gaining value over the long term.

On the same note, I would probably do a mutual fund or something too, just want start doing something besides my basic retirement savings plan.

Buy shares in cocco plantations / companies
The far east is starting to get the chocolate / easter bug and they should increase. Just what I heard at the water cooler HUGE market.

McKBrew said:

Mutual funds are definately another option. My reason for bring up stocks was that I was talking to a guy at work. He bought a set amount of a certain stock every pay day, back when it was about $20 a share. He did this for a year or so, and stopped buying when it started going up in price. Now, a few years later, the same same stock is almost $70 a share.

I understand that stock trading is not a get rich quick thing, but would like to invest in a few stocks that might have a potential of gaining value over the long term.

On the same note, I would probably do a mutual fund or something too, just want start doing something besides my basic retirement savings plan.

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Cool In that case, one other option is to look into companies that offer DRIPs (dividend re-investment plans). Find nice stable companies that you think will increase in value over time that also pay dividends. Instead of taking the dividend out, it gets invested back into the company so you own more and more of the company over time without having to think about it. I don't personally do this, but I think it has merit. I think there are funds that specialize in these programs too. Just a thought.