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MirkoS77

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#1 MirkoS77
Member since 2011 • 15230 Posts

I currently have about $3k saved, and considering the current situation and market, I'm prospecting investing into some stocks. Thing is, I have no knowledge and have zero idea as to where to start. I mean the basics of investing.

Can anyone point me in the right direction or give me some advice?

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DEVILinIRON

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#2 DEVILinIRON
Member since 2006 • 5605 Posts

Someone's bound to say not to invest it, so it might as well be me. Though, I don't actually have an opinion on the matter.

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#3 HoolaHoopMan
Member since 2009 • 11184 Posts

Buy some standard indexed funds. Track one of the bigger indexes like S&P, NASDAQ, Russell or get something more off the cuff like Barclays dynamic or PIMCO. If you feel like learning a bit more look into ETF ones too. They're easier to maintain and research than individual stocks.

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deactivated-5ec561f06de43

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#4  Edited By deactivated-5ec561f06de43
Member since 2020 • 111 Posts

First off, I gotta ask @MirkoS77 what are you investing for? Retirement?

I'm going to post my experiences below, but I am sure someone will come in and be like "No don't do that, do this" or "Don't invest, keep your money in the freezer"....which just goes to show how crazy we get about our money. With that said, here are my two cents on the matter:

Research some exchange-traded funds or mutual funds. They are not as exciting as stocks because they don't go up and/or down as much, but they are reliable for long-term investments.

  • As a rule, always DRIP (dividend re-investment program) when you can.
    • basically if you invest in something that pays dividends (dividends = a % payout every so often), it will reinvest that money back into the stock and buy more shares.
    • It's nice because when you buy shares, you can only buy whole shares, but with DRIP you can buy partial shares.
    • For example, if you buy a 10 shares of a stock at 300 dollars for 3000, but after three months you get a dividend payout of 100, you can buy a 1/3 share of stock. In other words, it just grows and grows.
    • You could take the dividend as a cash payment, but a.) it's not that much unless you invested a huge amount of money, and b.) it's essentially money you did not have before, so you might as well put it to work for you.
    • You will be very, very surprised just how effective dividend reinvestments are; you might see them and think "oh it's just a couple dollars" but over the course of a few years those few dollars turn into a few more shares, which turn into a few hundred dollars, which turn into a few thousand dollars, and so on.
  • Pay attention to expense ratios. These are fees, measured as a percentage, that the stock charges you. It's important to find good-performing stocks with low expense ratios because in some ways they might actually net you more money than a great-performing stock with a high expense ration.
    • For example, if you make the same amount of money off of two different stocks, but one has an expense ratio of 0.03% and the other an expense ration of 0.12%, the former actually made you more money.
    • Vanguard is known for their low expense rations, I recommend looking into some Vanguard ETFs and mutual funds.
  • Don't invest emotionally, but at the same time listen to your gut in addition to your brain. What do you like? Do you follow video games a lot? Is Rockstar going to release a new GTA in 2023? Probably want to buy some Take-Two stock in 2022 when it get's low to prepare for it. Find some resources:
    • Finviz.com: it's a bit overwhelming because it's literally just a webpage with stats, but it's a good resource for the hard data.
    • The Motley Fool: this is a good site for trends, research, and learning about how other people invest.
    • Charles Schwab: I made my first and only account here for investing, but was very surprised at their customer service. They have excellent tools for research, and are a great online brokerage or whatever you call them. I highly recommend making a Schwab account.
    And, of course, the timeless advice of "buy low, sell high" is still good. But at the same time, plan on holding on to your investments.
    • Just remember, however, that you are taxed 20+% if you sell your stocks without owning them for more than a year. So unless you're a day trader making so much money it's actually worth being taxed that much, you should probably invest in thing you plan on holding onto for a long time (like until retirement).
  • Last piece advice is this: don't dwell on stuff. Don't think "Oh if only I invested in this" or "If only I sold this". You can't predict the future, and most stocks will rebound. So ride it out.

If you're looking for the short and simple answer, here is mine: invest in an S&P 500 ETF. I recommend Vanguard's VOO ETF. Set it up so your bank account transfers a % of your paycheck to your brokerage account so you can buy a share or two each month or a few shares per quarter (I Don't know your income, you will need to figure it out for yourself).

You really can't go wrong with a solid ETF. Of course, it also depends on what you are investing for. Retirement? Or something else.

And practice a bit of financial discipline. Learn to cook so you don't eat out as much. Pre-party at home before going out for the night so you don't need to spend as much on drinks. Get a portable mug and make your own coffee instead of going to a cafe on the way to work. Stuff like that.

@DEVILinIRON said:

Someone's bound to say not to invest it, so it might as well be me. Though, I don't actually have an opinion on the matter.

Why would you not want to turn money into more money?

Obviously spending money is kind of nice, too, but not all the time.

Outside of real estate (which is often prohibitively expensive), it's one of the only ways for lower and middle-class people that actually save for the future and be secure.

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#5 Sevenizz
Member since 2010 • 4649 Posts

We’re about to see a worldwide depression (thanks china) so I’d save your money.

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VirusVaccine21

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#6  Edited By VirusVaccine21
Member since 2020 • 570 Posts

@Sevenizz said:

We’re about to see a worldwide depression (thanks china) so I’d save your money.

I can't belive it, but I agree with you on something, especially the China part.

Honestly... save. Wait until all of this improves. Everything is going to be rocky and unpredictable. We have no idea what's going to happen in the coming months. While usually the whole, "buy low" thing makes sense, we could at some point - although it's not assured, head straight into a global depression as Sevenizz mentioned. At this moment, having those 3k on your pocket could mean the difference between being able to get back on your feet or living in the gutter.

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#7 Sevenizz
Member since 2010 • 4649 Posts

@virusvaccine21: Wow, you managed that many words without inserting a needless Trump jab in there.

Colour me impressed!

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#8 VirusVaccine21
Member since 2020 • 570 Posts

@Sevenizz said:

@virusvaccine21: Wow, you managed that many words without inserting a needless Trump jab in there.

Colour me impressed!

That reminds me, time to post an anti-Trump thread. Feel free to reply.

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#9 Sevenizz
Member since 2010 • 4649 Posts

@virusvaccine21: Naw, it’s just transparent trolling at this point.

Have fun though!

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VirusVaccine21

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#10 VirusVaccine21
Member since 2020 • 570 Posts

@Sevenizz said:

@virusvaccine21: Naw, it’s just transparent trolling at this point.

Have fun though!

Then don't reply, but any time I mention your lord Trump you get triggered so I'll see you there.

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MirkoS77

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#11 MirkoS77
Member since 2011 • 15230 Posts

@jangles said:

First off, I gotta ask @MirkoS77 what are you investing for? Retirement?

I'm going to post my experiences below, but I am sure someone will come in and be like "No don't do that, do this" or "Don't invest, keep your money in the freezer"....which just goes to show how crazy we get about our money. With that said, here are my two cents on the matter:

Research some exchange-traded funds or mutual funds. They are not as exciting as stocks because they don't go up and/or down as much, but they are reliable for long-term investments.

  • As a rule, always DRIP (dividend re-investment program) when you can.
    • basically if you invest in something that pays dividends (dividends = a % payout every so often), it will reinvest that money back into the stock and buy more shares.
    • It's nice because when you buy shares, you can only buy whole shares, but with DRIP you can buy partial shares.
    • For example, if you buy a 10 shares of a stock at 300 dollars for 3000, but after three months you get a dividend payout of 100, you can buy a 1/3 share of stock. In other words, it just grows and grows.
    • You could take the dividend as a cash payment, but a.) it's not that much unless you invested a huge amount of money, and b.) it's essentially money you did not have before, so you might as well put it to work for you.
    • You will be very, very surprised just how effective dividend reinvestments are; you might see them and think "oh it's just a couple dollars" but over the course of a few years those few dollars turn into a few more shares, which turn into a few hundred dollars, which turn into a few thousand dollars, and so on.
  • Pay attention to expense ratios. These are fees, measured as a percentage, that the stock charges you. It's important to find good-performing stocks with low expense ratios because in some ways they might actually net you more money than a great-performing stock with a high expense ration.
    • For example, if you make the same amount of money off of two different stocks, but one has an expense ratio of 0.03% and the other an expense ration of 0.12%, the former actually made you more money.
    • Vanguard is known for their low expense rations, I recommend looking into some Vanguard ETFs and mutual funds.
  • Don't invest emotionally, but at the same time listen to your gut in addition to your brain. What do you like? Do you follow video games a lot? Is Rockstar going to release a new GTA in 2023? Probably want to buy some Take-Two stock in 2022 when it get's low to prepare for it. Find some resources:
    • Finviz.com: it's a bit overwhelming because it's literally just a webpage with stats, but it's a good resource for the hard data.
    • The Motley Fool: this is a good site for trends, research, and learning about how other people invest.
    • Charles Schwab: I made my first and only account here for investing, but was very surprised at their customer service. They have excellent tools for research, and are a great online brokerage or whatever you call them. I highly recommend making a Schwab account.
    And, of course, the timeless advice of "buy low, sell high" is still good. But at the same time, plan on holding on to your investments.
    • Just remember, however, that you are taxed 20+% if you sell your stocks without owning them for more than a year. So unless you're a day trader making so much money it's actually worth being taxed that much, you should probably invest in thing you plan on holding onto for a long time (like until retirement).
  • Last piece advice is this: don't dwell on stuff. Don't think "Oh if only I invested in this" or "If only I sold this". You can't predict the future, and most stocks will rebound. So ride it out.

If you're looking for the short and simple answer, here is mine: invest in an S&P 500 ETF. I recommend Vanguard's VOO ETF. Set it up so your bank account transfers a % of your paycheck to your brokerage account so you can buy a share or two each month or a few shares per quarter (I Don't know your income, you will need to figure it out for yourself).

You really can't go wrong with a solid ETF. Of course, it also depends on what you are investing for. Retirement? Or something else.

And practice a bit of financial discipline. Learn to cook so you don't eat out as much. Pre-party at home before going out for the night so you don't need to spend as much on drinks. Get a portable mug and make your own coffee instead of going to a cafe on the way to work. Stuff like that.

Appreciate the elaborate reply jangles, thanks for typing that all out. Sorry about your account, you need to get a new avy.

There's not a long-term goal, mainly I'm looking to make short-term profits. Investing in some stocks and selling when they rise (I didn't know about that 20%, which is discouraging). It's difficult to speak on how I wish to accomplish this as again, I'm ignorant on what type of investing there is, what the differences are, how to judge prudent investments vs. imprudent, even how the market and economy functions in nuance. What you discuss is foreign to me. I understand "buy low, sell high", but that's about it. Trust me when I tell you I'm largely ignorant on all of this.

It's intimidating as hell, and all the worse as this is money I've been saving for months which makes me extremely reticent to place it into a situation where I could lose it overnight due to ignorance. It's the first time in my life I've had this kind of cash. I am conservative with my expenditures (started 4 months ago to save for a new PC, for DCS and MSFS, heh!), but now that I have enough for it and seeing the current situation with COVID, I'm pondering on taking a risk. But then again, seeing people in here predicting a depression gives me pause.

But at present, yeah, it's solely for short-term gain, then longer when I have more to play with and don't fear so much to lose. Thanks for the links, I will check them out.

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MirkoS77

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#12 MirkoS77
Member since 2011 • 15230 Posts
@virusvaccine21 said:
@Sevenizz said:

We’re about to see a worldwide depression (thanks china) so I’d save your money.

I can't belive it, but I agree with you on something, especially the China part.

Honestly... save. Wait until all of this improves. Everything is going to be rocky and unpredictable. We have no idea what's going to happen in the coming months. While usually the whole, "buy low" thing makes sense, we could at some point - although it's not assured, head straight into a global depression as Sevenizz mentioned. At this moment, having those 3k on your pocket could mean the difference between being able to get back on your feet or living in the gutter.

I'm on the same wave length mostly, but have my father pestering me near daily to invest. He just made a few grand the other day.

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#13 Gaming-Planet
Member since 2008 • 20171 Posts

If you're bored and want to make quick cash, do day trading.

It's risky but rewarding.