Went with Ameritrade and invested in some stocks.

[dxkj]

My wife and I have about 6k in savings @ 2% interest, so I decided to try my hand at the stock market.... 2% shouldnt be hard to hit the way the market is gong, and even if I lose 10% it will be a learning experience (but I dont plan on losing :-/)

I have 25 free trades with ameritrade so I picked up

40 shares LU (~ 200)
10 shares MVL (~300)
5 shares KKD (mmm doughnuts) (~200)
100 shares SYBD (~70)
50 shares HEC (~50)
300 shares AVR (looks good longterm or short term) (~80)

That about covers it for now... unless I have a dream telling me to sell anything I will stay in for a while. I didn't go way in on anything, and I dont plan on making a ton on this setup, just hoping for anything above 2% return




EDIT: PS Thanks for advice on trading firms in an early thread, I figured out Ameritrade worked best for me at this time.

EDIT: Forgot to mention that I also have 112 shares of XOM and 4k in 6 different mutual funds from before. The XOM was a gift from my grandmother, so this is my first actual stock purchase.

 

[Argo]

Good luck. I'm actually looking to do the same thing as you. What made you chose ameritrade over other online brokers? When buying multiple stocks does each one count as a separate transaction, and hence separate fee, or can you buy a bunch of stocks in one transaction?

 

[AgentEL]

With Ameritrade, each one counts as a separate transaction.

 

[krunchykrome]

Do you plan on trading daily, or do you want to hold shares? Also, Scottrade offers $7 transaction fees, cheaper than any other I know of.

 

[lancestorm]

Originally posted by: krunchykrome
Do you plan on trading daily, or do you want to hold shares? Also, Scottrade offers $7 transaction fees, cheaper than any other I know of.

Scottrade is nice. However if it is a stock under $1, they charge $12 + 1/2% principal.

 

[SuperMachoMan]

Originally posted by: dxkj
My wife and I have about 6k in savings @ 2% interest, so I decided to try my hand at the stock market.... 2% shouldnt be hard to hit the way the market is gong, and even if I lose 10% it will be a learning experience (but I dont plan on losing :-/)

I have 25 free trades with ameritrade so I picked up

40 shares LU (~ 200)
10 shares MVL (~300)
5 shares KKD (mmm doughnuts) (~200)
100 shares SYBD (~70)
50 shares HEC (~50)
300 shares AVR (looks good longterm or short term) (~80)

That about covers it for now... unless I have a dream telling me to sell anything I will stay in for a while. I didn't go way in on anything, and I dont plan on making a ton on this setup, just hoping for anything above 2% return




EDIT: PS Thanks for advice on trading firms in an early thread, I figured out Ameritrade worked best for me at this time.

EDIT: Forgot to mention that I also have 112 shares of XOM and 4k in 6 different mutual funds from before. The XOM was a gift from my grandmother, so this is my first actual stock purchase.

With the amount of stock you are buying, the transaction fees are going to eat you alive. For instance with HEC, assuming the 12 dollar Ameritrade fee for buying and the 12 dollar fee for selling, you are going to need a 48% return on that stock just to break even. Even with Marvel you are going to need an 8% return to break even. That is HUGE amount when your goal should be beat the market by a couple percentage points.

In the future you should try to keep transaction costs to a minimum. I personally wouldn't buy a stock unless I had AT LEAST 1000 dollars to invest. Honestly you would have been better off researching a single stock and investing all of your money in that. "Diversification" really shouldn't be much of an issue with the amount of money you are investing.

 

[Dissipate]

With only $6K you should have just got a mutual fund. Lower risk, lower transaction cost.

 

[DaWhim]

how much is the initial deposit for ameritrade?

 

[djNickb]

Originally posted by: SuperMachoMan

Originally posted by: dxkj
My wife and I have about 6k in savings @ 2% interest, so I decided to try my hand at the stock market.... 2% shouldnt be hard to hit the way the market is gong, and even if I lose 10% it will be a learning experience (but I dont plan on losing :-/)

I have 25 free trades with ameritrade so I picked up

40 shares LU (~ 200)
10 shares MVL (~300)
5 shares KKD (mmm doughnuts) (~200)
100 shares SYBD (~70)
50 shares HEC (~50)
300 shares AVR (looks good longterm or short term) (~80)

That about covers it for now... unless I have a dream telling me to sell anything I will stay in for a while. I didn't go way in on anything, and I dont plan on making a ton on this setup, just hoping for anything above 2% return




EDIT: PS Thanks for advice on trading firms in an early thread, I figured out Ameritrade worked best for me at this time.

EDIT: Forgot to mention that I also have 112 shares of XOM and 4k in 6 different mutual funds from before. The XOM was a gift from my grandmother, so this is my first actual stock purchase.

With the amount of stock you are buying, the transaction fees are going to eat you alive. For instance with HEC, assuming the 12 dollar Ameritrade fee for buying and the 12 dollar fee for selling, you are going to need a 48% return on that stock just to break even. Even with Marvel you are going to need an 8% return to break even. That is HUGE amount when your goal should be beat the market by a couple percentage points.

In the future you should try to keep transaction costs to a minimum. I personally wouldn't buy a stock unless I had AT LEAST 1000 dollars to invest. Honestly you would have been better off researching a single stock and investing all of your money in that. "Diversification" really shouldn't be much of an issue with the amount of money you are investing.

Yup, if you wanna experiment with the markets, familiarize yourself with options and try your hand at those. If you use the right strategy in the right market conditions you have limited downside loss, and potentially unlimited gain.

 

[mjquilly]

www.buyandhold.com

$13.99/month for unlimited trades (not real-time trades)
$6.99/month for 2 trades, $2.99 after that.

If you're not day-trading, this is a good deal

 

[dxkj]

To answer all the questions so far:

I only invested 1k total.

Ameritrade has free trades for the first 25, in 5 weeks, so the returns will have to be much lower.

 

[dxkj]

Originally posted by: dxkj
My wife and I have about 6k in savings @ 2% interest, so I decided to try my hand at the stock market with 1k of it .... 2% shouldnt be hard to hit the way the market is going, and even if I lose 10% it will be a learning experience (but I dont plan on losing :-/)

I have 25 free trades with ameritrade so I picked up

40 shares LU (~ 200)
10 shares MVL (~300)
5 shares KKD (mmm doughnuts) (~200)
100 shares SYBD (~70)
50 shares HEC (~50)
300 shares AVR (looks good longterm or short term) (~80)

That about covers it for now... unless I have a dream telling me to sell anything I will stay in for a while. I didn't go way in on anything, and I dont plan on making a ton on this setup, just hoping for anything above 2% return




EDIT: PS Thanks for advice on trading firms in an early thread, I figured out Ameritrade worked best for me at this time.

EDIT: Forgot to mention that I also have 112 shares of XOM and 4k in 6 different mutual funds from before. The XOM was a gift from my grandmother, so this is my first actual stock purchase.

 

[SuperMachoMan]

Originally posted by: dxkj
To answer all the questions so far:

I only invested 1k total.

Ameritrade has free trades for the first 25, in 5 weeks, so the returns will have to be much lower.

Assuming you plan on holding your investments for longer than five weeks, you are still going to be responsible for the 12 dollar selling fee. That is still a sizable transaction cost for a 50 - 300 dollar investment. How much of a return do you honestly expect to make from these stocks and why?

If it were me, I would get rid of the penny stock garbage while you still have the free transactions and just put the whole thousand down into a single company. I would read up a bit more on stock valuation as well. I am not sure how much research you put into your stocks, but some of your picks look somewhat less than solid (unless you have legitimate reasons to believe otherwise).

 

[Hector13]

Originally posted by: SuperMachoMan
If it were me, I would get rid of the penny stock garbage while you still have the free transactions and just put the whole thousand down into a single company. I would read up a bit more on stock valuation as well. I am not sure how much research you put into your stocks, but some of your picks look somewhat less than solid (unless you have legitimate reasons to believe otherwise).

or better yet.. into one fund. There is no need to "put all your eggs in one basket" and risk picking the next enron.

Buy an index fund and stick with it. Trying to pick individual stocks is a gamble and will not pay off for most people. You are better off just betting on the market (with an index fund) than trying to beat it (cause you almost surely will not over a long term).

 

[AbsolutZero]

Just buy the NASDAQ tracking stock, QQQ, you won't be dissapointed after 5-10 years. Check out the long-term chart. Watching and worrying about individual stocks just causes headaches and gray hairs. My dad has done of individual stocks for 40 years and I'd say he would have been slightly better off with a good index fund or mutual fund all that time. It keeps him busy now that he's retired, so its worth it to him. I've toyed with individual stocks for 15+ years and haven't done any better than the NASDAQ.

 

[dafatha00]

Originally posted by: SuperMachoMan

Originally posted by: dxkj
To answer all the questions so far:

I only invested 1k total.

Ameritrade has free trades for the first 25, in 5 weeks, so the returns will have to be much lower.

If it were me, I would get rid of the penny stock garbage while you still have the free transactions and just put the whole thousand down into a single company. I would read up a bit more on stock valuation as well. I am not sure how much research you put into your stocks, but some of your picks look somewhat less than solid (unless you have legitimate reasons to believe otherwise).

Why would you take the chance with unsystematic risk? It'd be pretty dumb to put all his investment (even if only $1000) into a single stock. Like Hector said, an index fund is probably the best choice. No need to take that extra risk.

 

[SuperMachoMan]

Originally posted by: dafatha00

Originally posted by: SuperMachoMan

Originally posted by: dxkj
To answer all the questions so far:

I only invested 1k total.

Ameritrade has free trades for the first 25, in 5 weeks, so the returns will have to be much lower.

If it were me, I would get rid of the penny stock garbage while you still have the free transactions and just put the whole thousand down into a single company. I would read up a bit more on stock valuation as well. I am not sure how much research you put into your stocks, but some of your picks look somewhat less than solid (unless you have legitimate reasons to believe otherwise).

Why would you take the chance with unsystematic risk? It'd be pretty dumb to put all his investment (even if only $1000) into a single stock. Like Hector said, an index fund is probably the best choice. No need to take that extra risk.

Upon further consideration, you (and Hector) are correct. A fund would probably be the wisest choice for the original poster at this point. I was just thinking along the lines of "1000 is not nearly enough to spread out over several different stocks".

Ideally though I do think that learning about individual equitiess and in turn business and finance is a worthwhile endeavor for any investor.

 

[Epiphany]

Originally posted by: dafatha00

Originally posted by: SuperMachoMan

Originally posted by: dxkj
To answer all the questions so far:

I only invested 1k total.

Ameritrade has free trades for the first 25, in 5 weeks, so the returns will have to be much lower.

If it were me, I would get rid of the penny stock garbage while you still have the free transactions and just put the whole thousand down into a single company. I would read up a bit more on stock valuation as well. I am not sure how much research you put into your stocks, but some of your picks look somewhat less than solid (unless you have legitimate reasons to believe otherwise).

Why would you take the chance with unsystematic risk? It'd be pretty dumb to put all his investment (even if only $1000) into a single stock. Like Hector said, an index fund is probably the best choice. No need to take that extra risk.

I'm only 18, but I don't see the point to ever diversify in the stock market, unless we are talking about an obscene amount of money ($1mil plus). I say with good research you limit your risk while enjoying the upside of the potential when you put "all your eggs in one basket". Diversifying just minimizes the risk and gain. thats the way i see it..

 

[TranceNation]

nm, just read that you have 25 free transactions...

 

[Hector13]

Originally posted by: Epiphany
I'm only 18, but I don't see the point to ever diversify in the stock market, unless we are talking about an obscene amount of money ($1mil plus). I say with good research you limit your risk while enjoying the upside of the potential when you put "all your eggs in one basket". Diversifying just minimizes the risk and gain. thats the way i see it..

not to be offensive.. but the way you see it is wrong. In theory... the goal is not to minimize risk. Doing so is easy; stick your money in a CD. The goal is to minimize risk subject to a given rate of return (or, alternatively, maximize return subject to a given level of risk). The idea is, people probably have a given amount of risk they are willing to take (though it may be almost impossible to measure) so they should maximize their return for that level of risk.

Here is where an "information ratio" comes into play (or sharpe ratio). Simply put, it is a portfolio's (or stock's) return divided by risk... in other words, it is the amount of return you get for each "unit" of risk (here, we measure risk as the standard deviation of a stock's return). Assuming you are okay with this measure of risk and that you believe all the CAP-M mumbo-jumbo... it turns out that the "market portfolio" has a higher IR than any other portfolio out there.

So, if you want to target a return that is higher than what you expect the "market portfolio" to do. Your best bet isn't to pick a more risky stock that you think will outperform... your best bet is to lever up on the market (ie, borrow money and invest). Conversely, if the market is too risky, you should put some money in the bank (the "risk free asset") and some in the market.

 

[dxkj]

Thanks for your advice guys. I just started picking what I had been looking into and gotten advice on. I didnt really figure the transaction fees so much.


My goal? To hit 2% in a year or higher... pretty low goal.


What I think I will do.


sell my 5 shares of KKD, 100 shares of SYBD, 50 shares of HEC




Put another 50 into lucent (250 total). Lucent would have to go up a total of $250*1.02+11=266... so 16 dollars total... 50 shares, so thats a total of 32 cents for the year, in order to hit 2% gain.


Leave 10 shares of MVL. Purchased at 33.70 * 10= 337... 337*1.02+11=35.47.. a total increase of 1.77 per share to gain 2% for the year.

Leave 300 shares of AVR ... .28*300 = 84*1.02+11= .32 cents per share.. a total increase of .04 per share (which is what it did today). So unless that drops over the course of the year, Im still g2g


purchase ~ $400 of an Index fund..... should be fairly easy to hit 2% on the year.



Any opinions on that? I would like to keep Lucent MVL and AVR (AVR moreso out of a passing fancy, and an 84 dollar investment isnt much)

 

[dxkj]

I forgot to mention, I really do appreciate all the feedback Im getting Thanks for the help.

 

[KK]

Originally posted by: SuperMachoMan

Originally posted by: dxkj
My wife and I have about 6k in savings @ 2% interest, so I decided to try my hand at the stock market.... 2% shouldnt be hard to hit the way the market is gong, and even if I lose 10% it will be a learning experience (but I dont plan on losing :-/)

I have 25 free trades with ameritrade so I picked up

40 shares LU (~ 200)
10 shares MVL (~300)
5 shares KKD (mmm doughnuts) (~200)
100 shares SYBD (~70)
50 shares HEC (~50)
300 shares AVR (looks good longterm or short term) (~80)

That about covers it for now... unless I have a dream telling me to sell anything I will stay in for a while. I didn't go way in on anything, and I dont plan on making a ton on this setup, just hoping for anything above 2% return




EDIT: PS Thanks for advice on trading firms in an early thread, I figured out Ameritrade worked best for me at this time.

EDIT: Forgot to mention that I also have 112 shares of XOM and 4k in 6 different mutual funds from before. The XOM was a gift from my grandmother, so this is my first actual stock purchase.

With the amount of stock you are buying, the transaction fees are going to eat you alive. For instance with HEC, assuming the 12 dollar Ameritrade fee for buying and the 12 dollar fee for selling, you are going to need a 48% return on that stock just to break even. Even with Marvel you are going to need an 8% return to break even. That is HUGE amount when your goal should be beat the market by a couple percentage points.

In the future you should try to keep transaction costs to a minimum. I personally wouldn't buy a stock unless I had AT LEAST 1000 dollars to invest. Honestly you would have been better off researching a single stock and investing all of your money in that. "Diversification" really shouldn't be much of an issue with the amount of money you are investing.

I'm not understanding your 48% return statement. He bought 50 shares at $50 for 2500. $24 dollars in transactions fees would be made up if his stock went up ~50 cents. You don't pay a transaction fee for each individual stock.

KK

 

[SuperMachoMan]

Originally posted by: Epiphany

I'm only 18, but I don't see the point to ever diversify in the stock market, unless we are talking about an obscene amount of money ($1mil plus). I say with good research you limit your risk while enjoying the upside of the potential when you put "all your eggs in one basket". Diversifying just minimizes the risk and gain. thats the way i see it..

In general, I agree with this philosophy. I am of the Warren Buffett/Philip Fisher school of thinking in that I believe it's better to own a few companies that you know EXTREMELY well than it is to own many companies which you may not know as well.

I think different philosophies apply to different investors though. Many investors though, have neither the risk tolerance nor the confidence in their companies to put "all their eggs in one basket". Most novice investors would really be better off investing in index funds.

 

[HOWITIS]

krispy kreme