HIGH RISK STOCKS

[Ketteringo]

Check out the fatwallet finance forum, they know alot about this kind of thing 🙂 Just be sure to search for the question you are asking first!

 

[Evadman]

I have beat the average every year since I started way back in middle school. (did it though parents) Research, research, research. Penny stocks are for doofs. think about next month or year, not next week, or next hour.

 

[Krugger]

Originally posted by: Zenmervolt

Originally posted by: Skoorb

Originally posted by: Hector13

Originally posted by: Skoorb
I would stop deluding yourself. Beating the market is exceptionally difficult. The average, experienced, investor cannot even beat the market - and you want to come in knowing nothing about it and kick ass and take names? Say goodbye to your $500.

there is a big difference between beating the market and "doubling down" on the market like I was suggesting. Leveraging up on the market obviously doesn't mean you will "beat the market". You will get higher returns on the way up, but also bigger losses on the way down.

But, if you have a lot of time, are willing to take on more risk, and believe that over time, the market will go up... then taking a super high beta bet is exactly what you want to do. It is better than looking for more risk in individual stocks or micro cap funds.

Well, I didn't read the thread - so any post of mine was general and not in response to anything. I'm merely reiterating, as I always do, that the average joe will stand to lose money trying to place the market in this manner when compared to the gains they'll get by a less hands-on approach, such as in index fund.

You both make good points. Even with an exceptional fund manager an actively traded fund that tries to "time the market" will often no outperform the market by enough to make up for the increased amount of fees it incurs. In other words, the gross return (before fees and other frictions like bid/ask spreads) is sometimes better, but the net return (after fees and other frictions) is almost always worse than the market average.

ZV

excellently said. if you don't believe it read 'a random walk down wall st.' my prof wrote it, but he's bigtime, so it's a well known book.

 

[Zenmervolt]

Originally posted by: Krugger
excellently said. if you don't believe it read 'a random walk down wall st.' my prof wrote it, but he's bigtime, so it's a well known book.

You get to study under Malkiel?! Lucky friggin' bastage!

ZV

 

[Krugger]

Originally posted by: Zenmervolt

Originally posted by: Krugger
excellently said. if you don't believe it read 'a random walk down wall st.' my prof wrote it, but he's bigtime, so it's a well known book.

You get to study under Malkiel?! Lucky friggin' bastage!

ZV

yep, very cool. got my 'financial investments' final with him on saturday morning... should be... fun.

 

[StageLeft]

Originally posted by: Evadman
I have beat the average every year since I started way back in middle school. (did it though parents) Research, research, research. Penny stocks are for doofs. think about next month or year, not next week, or next hour.

By how much? If you've truly beaten the market over a long period of time by a decent amount, and can prove it, there are plenty of jobs for you.

 

[Blieb]

Originally posted by: Hector13

Originally posted by: richardycc
$500 is too little to play with, $2000 is the min to get into some of the less risky stocks, $500 will limit yourself to penny stocks, those are very very risky.

thats nonsense. As suggested before, buy some mutual funds. You can definitely do that with $500 and you won't be limited to penny stocks.

most mutual funds require 2500 initial investment.

 

[djNickb]

Options baby - Seriously read about them they're a great investment strategy as long as you don't use more than you can afford to lose and DO YOUR HOMEWORK to determine whta kind of position you should take on the underlying security. With options you can leverage the power of owning stock without actually owning the stock.


Check out Options Xpress for a good run down on the basics.

 

[Hector13]

Originally posted by: Blieb

Originally posted by: Hector13

Originally posted by: richardycc
$500 is too little to play with, $2000 is the min to get into some of the less risky stocks, $500 will limit yourself to penny stocks, those are very very risky.

thats nonsense. As suggested before, buy some mutual funds. You can definitely do that with $500 and you won't be limited to penny stocks.

most mutual funds require 2500 initial investment.

morningstar shows over 200 funds (the search is limited to 200 results only) with a min. investment of $500 or less. No doubt you can find several funds in whatever segment you want out of these.

In any case, you can buy one of the hundreds of ETFs out there as well of $500 or less.

 

[Zenmervolt]

Originally posted by: djNickb
Options baby - Seriously read about them they're a great investment strategy as long as you don't use more than you can afford to lose and DO YOUR HOMEWORK to determine whta kind of position you should take on the underlying security. With options you can leverage the power of owning stock without actually owning the stock.


Check out Options Xpress for a good run down on the basics.

Options make it very easy to lose everything. With an option, if you lose anything, you lose everything. As a part of a portfolio they're great. Options make great hedges, but you have to be prepared to lose everything if you're only in options.

ZV

 

[Hector13]

Originally posted by: Zenmervolt Options make it very easy to lose everything. With an option, if you lose anything, you lose everything. As a part of a portfolio they're great. Options make great hedges, but you have to be prepared to lose everything if you're only in options.

ZV

that is not necessarily true.. you can lose value in options without "losing everything"... they are risky, but so are stocks in general.

While I agree that options are a great way to get a lot of expsore with a little money (futures are very good for this too), the problem here is that I don't think there are any brokers out there that will give you a margin account (required for options/futures) with only $500.

 

[psyman1]

Uh oh.

I have seen no less than six stock threads today.

Even more worrysome people are starting to get interested in getting rich with five hundred dollars again.

Market overvalued?

How long will it hold?

News at 11.

 

[Zenmervolt]

Originally posted by: Hector13

Originally posted by: Zenmervolt Options make it very easy to lose everything. With an option, if you lose anything, you lose everything. As a part of a portfolio they're great. Options make great hedges, but you have to be prepared to lose everything if you're only in options.

ZV

that is not necessarily true.. you can lose value in options without "losing everything"... they are risky, but so are stocks in general.

While I agree that options are a great way to get a lot of expsore with a little money (futures are very good for this too), the problem here is that I don't think there are any brokers out there that will give you a margin account (required for options/futures) with only $500.

On a call option, if the stock price is less than the strike price the option is worthless. On a put, if the stock price is above the strike price the option is worthless. It is possible to lose only a portion of your money in an option if the difference between the stock price and the strike price is less than the option premium, but the probability of a $0 value for an option is far, far, far greater than the probability of a $0 value for a stock.

ZV

 

[Hector13]

Originally posted by: ZenmervoltOn a call option, if the stock price is less than the strike price the option is worthless. On a put, if the stock price is above the strike price the option is worthless. It is possible to lose only a portion of your money in an option if the difference between the stock price and the strike price is less than the option premium, but the probability of a $0 value for an option is far, far, far greater than the probability of a $0 value for a stock.

ZV

that is only true at maturity (when the option expires). For example, check out
these prices for july options on IBM.

IBM closed at $97.51, yet the july call @100 is worth $4.