Finding good stocks/ETF/MF to buy

[Zippyjuan]

Rule of thumb: never invest in a stock with less than $2,000.

Why? If you're using, say etrade, the cost per trade is roughly $10. Multiply that by two (buying and then selling) that's $20. If you were to buy only $1,000 stock, you would instantly be losing 2% of your investment right off the top just from the transaction fees etrade charges you. Given that the average annual return of a stock is somewhere in the region of 6-7%, that 2% is huge.

Ideally, you want to buy stocks in blocks of $3k+, but minimum, $2k.

And then that remaining five percent of the seven percent return is subject to about 25% capital gains taxes so you actually only made 3.75% instead of seven percent. This is why costs are so important.

 

[Bastiat's The Law]

And then that remaining five percent of the seven percent return is subject to about 25% capital gains taxes so you actually only made 3.75% instead of seven percent. This is why costs are so important.

What a crummy system.

 

[Dforkus]

What are the dividends like?

All the stocks I listed, except for RALY and TSLA pay some kind of dividend. You can look them up on yahoo finance.

 

[helmuth_hubener]

Where do you guys find a good buy? I've kinda browsed online and it's really difficult to know how to make a good investment it seems. Maybe I'm just hoping to find a really good buy and make a 50 percent gain in a short amount of time . I couldn't bring myself to buy any weapons stocks like raytheon even if it was to just buy then sell for a quick buck. I haven't bought any more silver, but I did purchase a little bit before it went up in price.

Are you wanting to do this with money you can afford to lose? Or are you going to be using money that is precious to you, that you really cannot afford to lose?

Which kind of money you're using will make a big difference in my advice to you.

 

[helmuth_hubener]

i didn't understand what a short amount of time was in the 1st post , to me a short amount of time is under 2 yrs .

if a short amount of time is 10 yrs just buy a good drug company paying 5% , just the dividend will come close as 7% money doubles in 10 yrs.

Yes, westkyle, please: what time-frame are you looking at? This will make a big difference as to what type of advice will be useful to you.

 

[Jordan]

There are no "quick ways" to make big bucks unless you get incredibly lucky. If there were any sure things, all of the big boys investing billions would be all over them which would beat the returns back down. Slow and steady. Anything else is gambling. Penny stocks are gambling. One thing to keep in mind, the higher the advertised potential returns, the greater risk of losing your money too. And watch expenses. Each transaction costs money which reduces your returns. Then you have to pay capital gains taxes which reduces them further.

Where do I have my money (after paying off my mortgage and putting aside enough money to pay all of my bills for a year should I somehow be unable to work or lose my job)? One is a utility company DRIP or Dividend Re-Investment Plan (google it- probably the cheapest way to own stocks as well as having the lowest price to buy in) and two index funds through Vanguard (index funds have the lowest expenses- they don't do much trading but buy and hold the stocks which comprise the index). Trading individual stocks is not a good way to make lots of money quickly. The expenses will eat you up and risk will be multiplied. And don't use any money you may need in the next few years. Should the investments decline in value, you need time to wait for them to go back up again before cashing out.

Good advice on a DRIP. Many are fee-free. Some let you buy shares with zero commissions or fees. The only free lunch you get in finance. http://www.directinvesting.com/

 

[enoch150]

Rule of thumb: never invest in a stock with less than $2,000.

Why? If you're using, say etrade, the cost per trade is roughly $10. Multiply that by two (buying and then selling) that's $20. If you were to buy only $1,000 stock, you would instantly be losing 2% of your investment right off the top just from the transaction fees etrade charges you. Given that the average annual return of a stock is somewhere in the region of 6-7%, that 2% is huge.

Ideally, you want to buy stocks in blocks of $3k+, but minimum, $2k.

If you only have $1,000 set aside to invest, your option is not 6% instead of 7%, it's 6% instead of 0%.

 

[ronpaulfollower999]

westkyle, if you do not have a lot of money, look into Betterment.com. There are no fees for adding funds to your account, so you're not charged $10 every time you want to invest. You can set how diversified you want to be between treasuries and stocks. There are also no minimums, but if you have less than $10,000 in your account they deduct $3 each month...unless you set up an automatic deposit of $100 every month.

 

[westkyle]

Are you wanting to do this with money you can afford to lose? Or are you going to be using money that is precious to you, that you really cannot afford to lose?

Which kind of money you're using will make a big difference in my advice to you.

Forgive my late reply. This money is precious to me. I've been pondering my retirement and making my money work for me for a few months now. The only thing I've done is bought some silver eagles to protect my wealth. After calculating my expenses I almost have my emergency fund secure. Really, I don't have a lot of money to work with, but I wanted to get started before the Fed probably continues QE. I could get away with spending 1000.

What do you guys think of the betterment.com website?

 

[helmuth_hubener]

Forgive my late reply. This money is precious to me. I've been pondering my retirement and making my money work for me for a few months now. The only thing I've done is bought some silver eagles to protect my wealth. After calculating my expenses I almost have my emergency fund secure. Really, I don't have a lot of money to work with, but I wanted to get started before the Fed probably continues QE.

OK, so from the words you chose above, it's clear that what you need is a secure, safe way to invest your money and be prepared for the future, whatever that future may hold.

That is not compatible, by the way, with this:

"Maybe I'm just hoping to find a really good buy and make a 50 percent gain in a short amount of time ."

And you probably understand that, given your tongue-sticking-out emoticon.

There is an annual return out there on the market that's available to everyone. You don't have to be an expert in finance. You don't have to worry about choosing the right stocks, or having the right timing, or tinkering with your portfolio. Anyone, anyone, can get this return. "Joe the Plumber" can get this return just as much as a professional stock whiz. Because money is money, it's interchangeable, it doesn't matter whose money it is.

For quite a while that rate of return, the one that's available to everyone, has been (cue fanfare): about 9% annually.

That's right. Anyone, without any special training or knowledge, can get a 9% annual return with safety and confidence. That adds up to your "50% gain," by the way, in a little less than 5 years.

Where people get into trouble is when they try to beat that annual return that's available to everyone. They think they can do better than 9%. And as part of their attempt, they do all kinds of risky things which can end up in them losing a significant portion of their money. Really, this activity is not even properly called "investing" -- it is speculating. It is making a bet that you know the future better than anyone else, better than the whole market, including many professionals who eat, breathe and sleep this stuff. But guess what? You probably don't. It's best not to make that bet.

I highly encourage you to go reads this article and learn a little about the fundamental philosophy of investment, and how investment is really very different from speculating:

http://harrybrowne.org/articles/InvestmentRules.htm

Then came back here and ask any questions you might have after reading it!

I could get away with spending 1000.

What do you mean? You have a total of $1,000 to invest? Is that amount fixed, that is, there's no more coming in, or will you be saving more each month?

What do you guys think of the betterment.com website?

As to betterment.com, I am not familiar with it, but after having briefly reviewed its investment portfolio my assessment is that it's not bad, but you can do even better.

Again, let me know what you think of the article and any questions you may have, and perhaps we can go ahead to the next step and get you set up.

 

[Zippyjuan]

Good advice on a DRIP. Many are fee-free. Some let you buy shares with zero commissions or fees. The only free lunch you get in finance. http://www.directinvesting.com/

Last time I made an additional purchase of $5000 worth of additional shares, it cost me like $0.85 (eightyfive cents!). No broker (personal or online) can touch that. DRIPS are handled by the company issuing the stock so rules and costs may vary along with the divend amount. My minimum additional purchase is only $25.

Another note- don't try to chase the highest return. High returns cannot be consistantly maintained. If something has had a good runup in value (whether that is the return on a fund or a stock or the price of precious metals), it is probably due for a decline.

 

[oyarde]

Last time I made an additional purchase of $5000 worth of additional shares, it cost me like $0.85 (eightyfive cents!). No broker (personal or online) can touch that. DRIPS are handled by the company issuing the stock so rules and costs may vary along with the divend amount. My minimum additional purchase is only $25.

Another note- don't try to chase the highest return. High returns cannot be consistantly maintained. If something has had a good runup in value (whether that is the return on a fund or a stock or the price of precious metals), it is probably due for a decline.

Utilities and industrial metals will still have some use when a crappy stock does no longer, I imagine .Most stocks are crappy if you look at the numbers.

 

[Tod]

As an aside, I divested of the stock market July 19th. It subsequently dipped over 750 points but has recently regained nearly all of those losses.

Still not regretting bailing, still expecting a major long term fall in the not too distant future. We'll see.

 

[helmuth_hubener]

As an aside, I divested of the stock market July 19th. It subsequently dipped over 750 points but has recently regained nearly all of those losses.

Still not regretting bailing, still expecting a major long term fall in the not too distant future. We'll see.

Sigh. Still predicting the future, eh?

Wouldn't you rather have a diversified portfolio that can reliably increase your wealth regardless of what happens? Why bet it all on a hunch?

 

[oyarde]

Sigh. Still predicting the future, eh?

Wouldn't you rather have a diversified portfolio that can reliably increase your wealth regardless of what happens? Why bet it all on a hunch?

I do not blame him at all, I have bet much on hunches before that usually turned out to be fairly correct
.Enough so it left me ahead of the game.People should do what they are comfortable with .Guy my age should not even be much in the market.When things turn for the next correction, it could be large . If you are over 45 and plan to use any of it before 60 .You may never have a chance to get some of it back .....

 

[helmuth_hubener]

I do not blame him at all, I have bet much on hunches before that usually turned out to be fairly correct
.Enough so it left me ahead of the game.

That's terrific! I am glad to hear it. Most investors do not have that experience. The vast majority of investors do not have that experience. That's because they are not actually investors at all, they are trying to be speculators. There are far too many of them doing the same thing that you did -- betting on hunches -- and, as some simple analysis of the factors can tell us, they almost inevitably end up far worse off because of their skittish buying and selling and betting.

The crystal balls are all out of order, people!

 

[westkyle]

OK, so from the words you chose above, it's clear that what you need is a secure, safe way to invest your money and be prepared for the future, whatever that future may hold.

That is not compatible, by the way, with this:

"Maybe I'm just hoping to find a really good buy and make a 50 percent gain in a short amount of time ."

And you probably understand that, given your tongue-sticking-out emoticon.

There is an annual return out there on the market that's available to everyone. You don't have to be an expert in finance. You don't have to worry about choosing the right stocks, or having the right timing, or tinkering with your portfolio. Anyone, anyone, can get this return. "Joe the Plumber" can get this return just as much as a professional stock whiz. Because money is money, it's interchangeable, it doesn't matter whose money it is.

For quite a while that rate of return, the one that's available to everyone, has been (cue fanfare): about 9% annually.

That's right. Anyone, without any special training or knowledge, can get a 9% annual return with safety and confidence. That adds up to your "50% gain," by the way, in a little less than 5 years.

Where people get into trouble is when they try to beat that annual return that's available to everyone. They think they can do better than 9%. And as part of their attempt, they do all kinds of risky things which can end up in them losing a significant portion of their money. Really, this activity is not even properly called "investing" -- it is speculating. It is making a bet that you know the future better than anyone else, better than the whole market, including many professionals who eat, breathe and sleep this stuff. But guess what? You probably don't. It's best not to make that bet.

I highly encourage you to go reads this article and learn a little about the fundamental philosophy of investment, and how investment is really very different from speculating:

http://harrybrowne.org/articles/InvestmentRules.htm

Then came back here and ask any questions you might have after reading it!

What do you mean? You have a total of $1,000 to invest? Is that amount fixed, that is, there's no more coming in, or will you be saving more each month?



As to betterment.com, I am not familiar with it, but after having briefly reviewed its investment portfolio my assessment is that it's not bad, but you can do even better.

Again, let me know what you think of the article and any questions you may have, and perhaps we can go ahead to the next step and get you set up.

I like Harry Browne and those 16 rules have helped me. Thanks. I've also been looking into some no-fee DRIP stocks. I'll check out that direct investing website and see if something catches my eye. Any recommendations are helpful from you guys. The 1000 dollars I mentioned is something I can spend without worrying at all or very little. But to be on the safe side I may wait till next year in order to get my emergency fund in full order.

 

[helmuth_hubener]

The 1000 dollars I mentioned is something I can spend without worrying at all or very little. But to be on the safe side I may wait till next year in order to get my emergency fund in full order.

Again, your word "spend" in this context is somewhat confusing to me. Are you looking to invest $1,000?

Where is this $1,000 right now? Is it just cash in a bank account, or is it going to be in a 401K, or maybe something else entirely? In other words, what restrictions, if any, are there on what you can invest in?

You have used the phrase "emergency fund" a couple times now. But you have also mentioned "my retirement." Which will this $1,000 be used for? To me, there is a big difference! In how quickly you want to be able to get at the funds, for one thing.

I like Harry Browne and those 16 rules have helped me.

How familiar are you with Harry Browne's investment advice? Have you examined his "Permanent Portfolio" concept?

I've also been looking into some no-fee DRIP stocks.

I personally do not think that picking and buying individual stocks is a good idea for your $1,000, given that it is precious to you and you do not want to lose it.

 

[westkyle]

Again, your word "spend" in this context is somewhat confusing to me. Are you looking to invest $1,000?

Where is this $1,000 right now? Is it just cash in a bank account, or is it going to be in a 401K, or maybe something else entirely? In other words, what restrictions, if any, are there on what you can invest in?

You have used the phrase "emergency fund" a couple times now. But you have also mentioned "my retirement." Which will this $1,000 be used for? To me, there is a big difference! In how quickly you want to be able to get at the funds, for one thing.

How familiar are you with Harry Browne's investment advice? Have you examined his "Permanent Portfolio" concept?

I personally do not think that picking and buying individual stocks is a good idea for your $1,000, given that it is precious to you and you do not want to lose it.

Perhaps I shall find a new skill to pursue with the 1000 dollars then. I would probably make more money. Hmmm... Why does making money have to be so complicated(taxes suck).

 

[Zippyjuan]

If it was easy to make tons of money, everybody would be billionares.