I'm looking to get started in the stock market...

[imported_Lothar]

Originally posted by: richardycc
buy PFE at ~$24, sell at ~$28, rinse and repeat.

PFE is just about the worst biotech/pharmaceutical company anyone can pick now.
They have so many drugs coming out of patent that it's not even funny. Their research department can't keep up that's why they're cutting employees to generate revenue.

 

[imported_Lothar]

Originally posted by: Special K
How should one go about choosing between an index fund that just tracks a market index like the S&P500 and an actively managed mutual fund?

You want something that overlaps different industries and different regions.
The S&P500 is a good start for most, and later on you can diversify by adding an European and Emerging markets index fund to your portfolio.

Compare the S&P500 Index fund requirements from Vanguard, Fidelity, and T. Rowe Price to see which one you prefer.
Their websites are googleable.

 

[DaveSimmons]

Originally posted by: Special K
How should one go about choosing between an index fund that just tracks a market index like the S&P500 and an actively managed mutual fund?

The way I chose was to look at the facts that:
1. The majority of actively managed funds do worse over time than the S&P 500 and index funds that track it.
2. You have no way of knowing which actively funds will outperform the S&P 500 in any given year, since the lucky gamblers change from year to year. "Past performance is no guarantee of future returns."
3. For non-retirement accounts, an S&P 500 fund has a low tax bite since there are few capitabl gains from trading stocks in the fund. The only time a stock is sold (generating gains) is if it is removed from the index.

Because of the above, I have 100% of my stock money in index funds.

For diversification it's good to have S&P 500, then an international index like Vanguard's total international composite (europe, asia, emerging), then another US index small & midcap fund like Vanguard's VEXMX.

 

[hiromizu]

Read this book called "Little book that beats the market" by Joel Greenblatt before you put any real money into the market. It's a great book for anyone to understand the disciplined philosophy and approach to value investing.

Also check out Investopedia.com. They have a very useful market simulator that will get your feet wet into the actual process of trading and investing.

 

[imported_Lothar]

Speaking of PFE...
"Pfizer Inc., the world's largest drugmaker, said second-quarter earnings fell 48 percent as competition reduced revenue from the top-selling cholesterol pill Lipitor."

"Total sales fell 5.6 percent to $11.1 billion, missing the average analyst estimate of $11.5 billion. Chief Executive Officer Jeffrey Kindler has cut jobs and closed factories in his first year at the helm to offset revenue declines from the loss of patent protection on some of Pfizer's biggest products."

"Pfizer shares declined 83 cents, or 3.2 percent, to $25.13 at 4 p.m. in New York Stock Exchange composite trading. The stock has gained 11 percent in the past 12 months, lagging behind a 19 percent gain in the 14-member Standard & Poor's 500 Pharmaceutical Index."

"Sales of Lipitor fell to $2.7 billion. A 25 percent drop in the U.S. more than offset a 5 percent sales gain abroad."

"There is nothing in Pfizer's pipeline, or any pipeline in the industry, that can replace Lipitor,'' said analyst Barbara Ryan of Deutsche Bank Securities Inc.

"The revenue decline also reflected reduced demand for the blood-pressure drug Norvasc and the antidepressant Zoloft, both of which lost patent protection and faced cheaper, generic rivals."

"The New York-based pharmaceutical company Pfizer reported a net profit of $1.27 billion, or 18 cents a share, compared with $2.42 billion, or 33 cents a share, for the same quarter last year."

"Pfizer's top line has been under pressure in recent quarters because of the loss of patent protection for several of its once-popular products, such as Zoloft, Zithromax and, most recently, Norvasc."

"Pfizer had been hoping that Lipitor sales could withstand the onslaught of generic statins. Instead, Lipitor sales dropped 13% worldwide during the second quarter to $2.7 billion. U.S. sales got hit especially hard, tumbling 25%."

"Meanwhile, Norvasc second-quarter sales fell 45% to $642 million. Prior to losing its patent protection, Norvasc was Pfizer's second best-selling product."

http://www.bloomberg.com/apps/...chive&sid=ay6TyhLOTHH0
http://www.marketwatch.com/new...A3%7D&dist=SecMostRead

Originally posted by: richardycc
buy PFE at ~$24, sell at ~$28, rinse and repeat.

Good luck.