OT Online Stock Trading - saving for my next boat

Looking for advice on online stock and mutual fund trading. For those who invest online, do you recommend e-trade, Scottrade, Fidelity, TD Ameritrade, or another service?

I won't be able to afford my next boat with savings account interest at 1% or CD interest at 2.1% while inflation is at 5%. I'm moving backwards. I am looking to make some careful investments when stock prices are low.

 

Stock trading is for sophisticated investors and you are quite likely to loose your capital let alone interest.

Interest can be as much as 3.25, I hav'nt looked for a while but my last was 3.55 on the pound for 1 year.

In such a volatile market you sure had better know what you are doing in fact you may be better off spending a night in Las vegas--its not much different.

But if you in to high yeild long term you don't need a broker a bank should be able to do a simple purchase for you.

 

3.25 - I wish. The highest CD rates here are only 2.1% for a 5-year CD.
With inflation at 5%
I know stocks are a risk.
I will not invest any money I need for food and shelter.
And I won't go mad if it crashes.

I'm looking for recommendations for an online trading account that offers solid service without a high broker's fee. Also any advice on hidden fees to watch for and tools to help alert, schedule, and track.

 

Your us dollar is parity to the aussi dollar. In aus it is about 5.5%

Kiwi dollar is not too bad.



US government 10 year is 1.8% I think, thats because its very low risk and your likely to get your money back.

Now if you looking for a bit of risk

Greek 10 year is 28% .

 

Saving ?? Who needs savings for a boat... simply go to the bank and borrow 1,000,000,000 dollars...get the boat of your dreams, plus an island...then declare bankruptcy. With one billion you are to big to fail, the taxpayer will step in and you can move on to bigger things.

 

Stock trading has nothing to do with "saving".

The trader takes existing capital and places it in investment vehicles which are calculated to yield a greater return than the relatively low static returns in a saving account.

As a beginner you will need time and capital to begin investing.
You will in all likelihood loose some or all of your initial capital as you learn how to position your funds in the market. You will also exhaust some years in the endeavor.


Now that the requisite lecture is out of the way

I trade with a Scottrade account.
7 bits a trade- so $14 round trip in and out of any security. It adds up, trust me.

Read some books:

O'neil's
How to make money in stocks

Graham's
The intelligent investor

You will need to learn how to assess when a stock is a value in the market:
A good price is not paying less than the market had been willing to pay, but purchasing at lower than the instrument is worth.

You will need to learn something about Technical Analysis AND fundamentals:
There is nothing quite like buying a stock at the correct point in a consolidation, watch it take off and net you a hefty profit then fail and loose all as the company files for chap 11.
Ask me how I learned this- SEVERAL times.....

Really learn what it means to be "whipsawed" out of positions and how you must approach your investments to prevent this.

REALLY learn what the difference is between 'investing' and 'speculation'

Don't get caught up in all the fancy indicators- bollinger bands, stochastics, MACD's etc etc etc...
Follow price, volume and fundamentals.

Once you have developed a sound rational approach to investing in the markets, take heed; the market can be irrational far longer than you can remain solvent.


I enjoy the pursuit. It's fascinating to study markets and market participants. It's an extremely easy way to make money. It's also an extremely easy way to loose money.

Lets start with a test question for you:
One of the bits of market wisdom intones to "never trade 'against' the market" (very good advice till you know how to tie your shoes)

Q: what is the market direction now? And what does that mean for YOU?



A Stock:
I have long followed Alcoa (AA)
Pull up a long chart (4 years)
Study the price movement through the sell off of 2008/09, rebound of 2010/11 and retracement to today's levels.
Give some thought to how a basic materials company like Alcoa fairs during recessionary conditions with industrial demand for its products falling. Give some thought to how investors treat this stock and all others as investment vehicles (how the price moved in spite of market trajectory and profitability of company). Pull up the Q10's for the company for a few quarters and get a feel for how the numbers look.

Give some careful thought to an entry point based on the historic prices paid (investor sentiment), the profitability and assets of the company (real value), and ones assessment of the market conditions within which these two variable will exist into the future.
This 10 billion dollar company sold off and continued its decline in stock price to today's levels when earnings missed one quarter by .01; a penny...

Some months back I had thought that 12 was a 'good price' and 9.5 a definite 'buy'. I had bought it during 2009 for 4.8.
I watched in trade down to 9.98 this morning.. A buy?
I held off as I think the market has a bit more room on the down side.

There is without question a good purchase point for Alcoa.
Figure that out and you will make money. Miss it and you will loose.

That said- the most difficult aspect of market participation is not knowing when to buy, but when to sell.

Have fun

 

True. If you can get one, loan interest is low now.
I'm afraid to get over my head in debt or I would borrow and take advantage of low interest rates. The fast boats I like don't appreciate or it could be a good investment too.

 

Thank you bntii for your thorough reply.
I appreciate people wanting me to not lose my wallet on the first trip out.
I have my eye on several tech stocks and will start educating myself and studying them short and long term.

 

You will need to find an edge to put yourself ahead of the pack to make any decent, relatively quick money. That won't come easily, everyone and his dog are competing.

 

"The art of investment has one characteristic that is not generally appreciated. A creditable, if unspectacular, result can be achieved by the lay investor with a minimum of effort and capability; but to improve this easily attainable standard requires much application and more than a trace of wisdom. If you merely try to bring just a little extra knowledge and cleverness to bear upon your investment program, instead of realizing a little better than normal results, you may well find that you have done worse.

Since anyone- by just buying and holding a representative list-can equal the performance of the market averages, it would seem a comparatively simple matter to "beat the averages"; but as a matter of fact the proportion of smart people who try this and fail is surprisingly large. Even the majority of the investment funds, with all their experience personnel, have not performed so well over the years as has the general market. Allied to the forgoing is the record of the published stock-market predictions of the brokerage houses, for their is strong evidence that their calculated forecasts have been somewhat less reliable than the simple tossing of a coin....."

Benjamin Graham
The Intelligent Investor


http://www.youtube.com/watch?v=1-ZpHr5l0U0

 

Thank you again for the perspective. I hope I can make 10% a year with careful picks. I could be all wrong.

 

Go slow, my friend. Start with play money first and play the game for 6 mos to see if you come out ahead. Develop a strategy that way.

I used Fidelity before cashing everything out and selling a previous boat to afford my current build.

There are a lot of numbskulls working at Fidelity, but they do have great, live customer service from Americans and they have locations in case you need that.

Once your brokerage account is set up, the trading interface is a snap.

Just watch out for random things biting you in the a$$. I did a lot of short term trading. I had a great trade going on the day "Timmy" Geitner made his first speech in his new position. If anyone remembers this speech, Timmy really dropped the ball and didn't do his homework. Stocks tanked and I lost a lot. So... be ready for the unexpected to take you by surprise.

The advice about Benjamin Graham is great. Good book.

You also have to divorce yourself from the emotions. Just like buying a boat.

I did pretty well in the face of all the chaos in short term trades. You can too, but just make sure you play the game a little bit with fake money first.

 

I am not an avid watcher of share index movements, but in recent times the number of occasions when one-day movements greater than + or - 2% have occurred, seems extraordinary. I suspect a lot of money has been made from this volatility, but formulating a strategy to catch the wave up or down with better than 50% accuracy, could require a sixth-sense. But, there may be a 'mechanical' system that does just that. You would need ideas to test, and ways to test them (looking at past movements) and come up with some firm strategies before laying down your cash.

 

Just buy into a high cash holder giving high yeild. That seems to be the advice from the TV such as Bloomberg CNN etc.

No matter how poor you are you will always need clothes food and shelter.

So something on those lines and then sit on it.

 

I think that all these speculators on the stock market are a bunch of scumbags. We have to work harder to make more money so they can profit by increasing prices and skimming off the top. They don't provide a service, manufacture a product or grow food. In other words they are parasites.