Couple newb questions about opening an online brokerage account.

[Deuce2High]

Hey all,

I recently just started researching economics and the stock market. I have ordered some books on Amazon and I've begun reading and exploring the net; But I still have very little knowledge. However, within the next few weeks I plan on reading through a few of these books and I at this point I am planning on opening an online trading account that I can control myself to play around with (obviously cautiously and with research and advice from Dad and his broker). Some questions...

What do you all think of this plan in general? Is it too wreckless for me to open an account with such limited knowledge? Do all online brokers let you trade on all of the exchanges? If not, which online brokers will trade for NASDAQ, NYSE, and LSE? What online brokerage do you recommend? Is there any other important information or general advice for me to consider before I begin?

[gull]

It is reckless. My advice would be to put the money in index funds and then experiment in a play money account.

[john kane]

my (bad and noob) advice would be to read investing magazines and if there are any very good tips they give go invest in those stocks. also, if you have any friends who know a lot then ask them for any useful tips.

index funds seem way too boring. i read somewhere about the warren buffet guy saying about how 99% of americans would be better sticking it in an index fund than buying/selling individual stocks, but if you read up a bit and go for the stocks you think will overperform the market, then go for those as that will > index funds.

maybe stick say 50% of your funds into an index fund if youd feel more secure, but definitely have some of it for good tips you read/are given.

as i say, i am very new to this, but thats my impression.

i do realise that when it comes to this, its important to realise how little i know, hence follow others advice id say.

[AustroDONK]

lol @ taking advice from Magazines... how do you ever think this is current and not all the smart money is already there....
I think you can play around with some real money.. just don't gambool everything. Put 80% in some diversified index fund like VTI (Vanguard Total Stockmarket index) and then go try your luck with the rest.... applying what you read in your books... but be careful about your first line...stock market and economics are not immediately related - there is about a 6 month lag between stock market and the economy, so make sure you keep these 2 separate... or you will always be early or late...... GOOD LUCK !!!

[climber]

read "random walk down wall street" and peter lynch's "one up on wall street" to get a couple different perspectives on investing/the market. you'd prob prefer to read schwager's "market wizards" which you could but thats more of a trading perspective and then you'd prob just lose all your money trying to emulate people in those books who do stuff you can't even remotely begin to comprehend. if its gamble you want poker is likely way more +EV for you unless you are really really bad.

open a account and get what money you have into some index funds.

keep reading...google "graham stocks" and learn how to use a stock screening tool--the yahoo or msn ones are fine for your purposes. sign up at motley fool and find out what the PEG is and learn how to calculate it. figure out how to read a balance sheet, look up anyalysts' future earnings predictions, find related news stories on a stock and etc. etc.

open an "account" at a site like investopedia and start paper-trading your ideas/companies you find as you research.

don't take tips from any magazine or person on the street or knowledgeable friend or rich person you are remotely connected to unless you want to just throw your money away. Its not poker--stocks are actually a part of a company with a story behind it, not just a lotto scratcher. do a little research and figure out what the story is and then do a little more work and decide whether or not the story actually makes sense.

[The Yugoslavian]

Do what newt's doing with most of your $$ (I'm pretty sure he's putting a lot of it into indexed mutual funds...well the $ he doesn't donk off highcarding, lol).

Take some other amt of $ and learn with it.

Okay, so basically what the first person in this thread posted, oh well.

Yugoslav

[dazraf69]

[ QUOTE ]
It is reckless. My advice would be to put the money in index funds and then experiment in a play money account.

[/ QUOTE ]

It seems everyone suggest that index funds are the right way to go. So is that to say that real money making should be left to the experts? And I a play money account is the same as a poker play account. You never put as much effort into a play account as you would into a real account. Having positive results in a play account can be a recipe for disaster. Once again i just find it troubling, the common suggestion of "put it into an index fund".

[gull]

"Real money making," as you put it, is putting the money in index funds. Putting the money in index funds is what "experts" recommend and do. I'm not trying to shoot down your hopes of beating the market. I'm just telling it like it is.

[dazraf69]

[ QUOTE ]
"Real money making," as you put it, is putting the money in index funds. Putting the money in index funds is what "experts" recommend and do. I'm not trying to shoot down your hopes of beating the market. I'm just telling it like it is.

[/ QUOTE ]

gull,

I didnt mean it as a personal attack on you. I just beleieve that with hard work and a solid framework, in the long run anyone within reason can beat the market. I agree that for anyone not looking to put in intense effort into research, a carefully picked index fund is best. But why not then just hand your money over to an investor and be done with it?

[Deuce2High]

Thanks for the advice and comments. Dazrif and gull I do agree a little with both of you. If I got into this I would definately do all of my homework and consult with my Dad's broker and research my picks daily. (And I probably wouldn't have more than 4-5). I currently have like 60k given to my Dad's broker which is a considerable portion of my net worth. How much harm can I do to myself if I take another 20k (bout 10% of my liquid) and gain some first hand experience , etc. I dunno, I just want to get into this seriously, not like throwing my money into a fund. I learn the best when it's first hand experience / my money at stake.

Also, here is a list of the books I have ordered on Amazon, anyone suggest any more or have any warnings about any of them?

1 "The Intelligent Investor Rev Ed. (Collins Business Essentials)"
Benjamin Graham


1 "How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition"
William J. O'Neil

1 "The Neatest Little Guide to Stock Market Investing (Revised Edition)"
Jason Kelly;

1 "Common Stocks and Uncommon Profits and Other Writings"
Philip A. Fisher

1 "One Up On Wall Street : How To Use What You Already Know To Make Money In The Market"
Peter Lynch


1 "Jim Cramer's Real Money: Sane Investing in an Insane World"
James J. Cramer


Also I also wanted to ask about the different online trading sites, which ones I should check out...