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looking into buying a small amount of stock, some newbie questions

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looking into buying a small amount of stock, some newbie questions

Old 01-02-05, 07:19 PM
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looking into buying a small amount of stock, some newbie questions

I am looking into buying some stock for the first time. i'm only 24 and employeed over 2 years now out of college...i want to toss some extra cash into 1 company (for now)....a few questions to those who may be familiar with this whole thing.


1)I want to go through an online trader/broker.........how do these work? how long must i keep the shares before selling them? what sites do you recommend that offer a fair deal?

2)any other advice would be appreciated.

i am thinking of buying some shares of sirius satellite (i know i know i am a little late).....
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Old 01-02-05, 07:21 PM
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Moving to Gambling Forum.
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Old 01-02-05, 07:25 PM
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most brokers work like any other bank. you open an account and deposit money. some have minimum amounts or you get fees. i think scotttrade has the lowest rates at $7/trade.
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Old 01-02-05, 07:57 PM
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Originally Posted by MACD23
I am looking into buying some stock for the first time. i'm only 24 and employeed over 2 years now out of college...i want to toss some extra cash into 1 company (for now)....a few questions to those who may be familiar with this whole thing.


1)I want to go through an online trader/broker.........how do these work? how long must i keep the shares before selling them? what sites do you recommend that offer a fair deal?

2)any other advice would be appreciated.

i am thinking of buying some shares of sirius satellite (i know i know i am a little late).....
1. Shop around. There is no length of time you have to keep a stock before selling, although there are tax benefits if you hold it for over 1 year (and you sell for a gain).
2. Don't invest in one company. If you don't have the cash to buy many different companies, consider other investments such as mutual funds that diversify your risk for you. Otherwise, you're just gambling.
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Old 01-02-05, 08:03 PM
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Originally Posted by Duran
1. Shop around. There is no length of time you have to keep a stock before selling, although there are tax benefits if you hold it for over 1 year (and you sell for a gain).
2. Don't invest in one company. If you don't have the cash to buy many different companies, consider other investments such as mutual funds that diversify your risk for you. Otherwise, you're just gambling.
Thanks Duran and others.


1)i plan on hopefully having it at least a year, but just curious, what kind of taxes and fees do you get hit with when selling (and is it only on gains?)

2)i don't plan on investing for a long period of time per say...i want to get my feet wet, and maybe score some quick bucks by buying and then getting out at the right time...maybe make a couple grand or something...nothing too serious...........i already have been investing in 401k mutual funds through my employer since i was hired.....this stock thing is just for some fun.

also, i have this theory i hatched up, about buying stocks in a large established company that is really down on its luck.....the idea is that it will never fold, and can go nowhere but up. (think mcdonalds a few years ago).....am i making an sense with that or am i wrong?

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Old 01-02-05, 08:05 PM
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you pay capital gains taxes on any gains after a year. you pay regular (income tax) on gains if you sell before a year
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Old 01-02-05, 08:11 PM
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Originally Posted by MACD23
...i want to get my feet wet, and maybe score some quick bucks by buying and then getting out at the right time...maybe make a couple grand or something...nothing too serious...........
This is like saying "I'll just play some blackjack, make a couple grand or something..."

You might want to predetermine how much loss you'll take before bailing out too. There is no guarantee you'll ever make a penny, even on paper.
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Old 01-02-05, 08:22 PM
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ok. and i assume the rate is a bit more friendly on capital gains than it is on income....?
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Old 01-02-05, 08:24 PM
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Originally Posted by X
This is like saying "I'll just play some blackjack, make a couple grand or something..."

You might want to predetermine how much loss you'll take before bailing out too. There is no guarantee you'll ever make a penny, even on paper.

lol...i know. i plan on starting out with $1000 worth of shares.......i'll let it dwindle down pretty low since its not money i need to survive...i look at it like play money... but i am optimistic it will not come to bailing out, if i do the research into who i invest in.
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Old 01-02-05, 08:25 PM
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Originally Posted by MACD23
ok. and i assume the rate is a bit more friendly on capital gains than it is on income....?
depends on your income of course, but in general yes. don't recall the exact numbers off the top of my head though
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Old 01-02-05, 08:28 PM
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Originally Posted by MACD23
Thanks Duran and others.


1)i plan on hopefully having it at least a year, but just curious, what kind of taxes and fees do you get hit with when selling (and is it only on gains?)

2)i don't plan on investing for a long period of time per say...i want to get my feet wet, and maybe score some quick bucks by buying and then getting out at the right time...maybe make a couple grand or something...nothing too serious...........i already have been investing in 401k mutual funds through my employer since i was hired.....this stock thing is just for some fun.

also, i have this theory i hatched up, about buying stocks in a large established company that is really down on its luck.....the idea is that it will never fold, and can go nowhere but up. (think mcdonalds a few years ago).....am i making an sense with that or am i wrong?
2. Then be prepared to lose money. Don't invest in the stock market with a time horizon of under 5 years. If it was as easy to make money in the stock market as you seem to think it is, everyone would do it.

If you plan on gambling, which is what you are describing is, then treat it like Vegas. Set an amount you are willing to flush down the toilet, and stick to it.
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Old 01-02-05, 08:29 PM
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Pretty sure it is 15% for capital gains and ~30% for income, depending on just how much you make. I think Bush was trying to change the capital gains rate, but I'm not sure if anything came of that.
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Old 01-02-05, 08:34 PM
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Originally Posted by Duran
2. Then be prepared to lose money. Don't invest in the stock market with a time horizon of under 5 years. If it was as easy to make money in the stock market as you seem to think it is, everyone would do it.

If you plan on gambling, which is what you are describing is, then treat it like Vegas. Set an amount you are willing to flush down the toilet, and stick to it.

i hear what you're saying...i have this wild idea about getting in, and in 2 yrs selling at twice the price....so what about the idea then of investing in 3 or 4 companies? i don't want to do mutual funds, i already do that in 401k, which is my safe investing...this is some play money i want to have some fun with.....

also, another question. when i type a company into the symbol lookup, i often get many results (coca cola corp for example) this must be because they have seperate off-shoot companies..is there an easy way to know which one is the parent company, so i don't invest in the wrong one?
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Old 01-02-05, 08:53 PM
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Ah yes I once shared the OP's enthusiasm for the stock market then after months of ups and downs of depression and joy I finally wound up selling my stock and breaking even. Oh yes it is certainly "fun".
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Old 01-02-05, 08:55 PM
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Old 01-02-05, 09:09 PM
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Originally Posted by MACD23
i hear what you're saying...i have this wild idea about getting in, and in 2 yrs selling at twice the price....so what about the idea then of investing in 3 or 4 companies? i don't want to do mutual funds, i already do that in 401k, which is my safe investing...this is some play money i want to have some fun with.....

also, another question. when i type a company into the symbol lookup, i often get many results (coca cola corp for example) this must be because they have seperate off-shoot companies..is there an easy way to know which one is the parent company, so i don't invest in the wrong one?
By investing in multiple companies, you are reducing the overall risk of your portfolio by minimizing company risk. 3-4 isn't quite enough to be diversified, though. The idea is to not put all your eggs in one basket. Mutual funds often own 20 or more companies, so they diversify for you.

If you want to gamble on a particular company and aren't afraid to lose money (and you probably will lose money), go ahead any put it in a single company. Just keep in mind that not only do you have to sell for more than you paid, you have to have made enough to cover the commissions on the trades.

On the plus side, losses in the stock market are tax deductible.
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Old 01-02-05, 09:23 PM
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what do you mean to cover the commissions on the trades?

and yes, i know mutual funds are safe and are made up of many companies, but they're also boring, and they are where my weekly 401k contributions go....i want to take a gamble with some money i am willing to lose on 3- 4 companies tops.
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Old 01-02-05, 09:41 PM
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Originally Posted by MACD23
and yes, i know mutual funds are safe and are made up of many companies,
Mutual funds aren't "safe", they just spread the risk. Where have you been the last 5 years? If the entire market is going down, mutual funds go down with it.

You really need to study up on this whole stock market thing. Personally, I would suggest small, low-commission investments in several companies in different sectors, setting your expectations for them, and then evaluating how they did versus your expectations.

I could dig up a thread about a "sure thing" if that's necessary to convince you of this.
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Old 01-02-05, 09:43 PM
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Originally Posted by MACD23
what do you mean to cover the commissions on the trades?
You have to pay a broker to buy or sell your stock. If an order costs $15, you start off $30 in the hole. Costs vary from broker to broker, and different types of trades often cost varying rates.
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Old 01-02-05, 09:49 PM
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Originally Posted by X
Mutual funds aren't "safe", they just spread the risk. Where have you been the last 5 years? If the entire market is going down, mutual funds go down with it.
ugggh....i should have used the word "safer".i am well aware that when the whole market is down, most of the funds tend to be down as well.......

You really need to study up on this whole stock market thing. Personally, I would suggest small, low-commission investments in several companies in different sectors, setting your expectations for them, and then evaluating how they did versus your expectations.
i'm going to pick up one of those trading or investing for dummies books as shown above, so i can clear everything up before buying anything.

I could dig up a thread about a "sure thing" if that's necessary to convince you of this.
i understand, like i said, one strategy i may employ is getting in on large established company that is down, but not going anywhere. also maybe getting in on some stuff that is already priced pretty low. i am not going to buying any pricey shares, not for the small amount i am putting in.
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Old 01-03-05, 01:05 AM
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Check out Sharebuilder.com
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Old 01-03-05, 02:49 PM
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I use Sharebuilder.com. Easy to use.

$15 comission per transaction for a "real-time" trade.
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Old 01-03-05, 02:56 PM
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thanks, i'll check them out.........i am trying to decipher all the hidden fees.anyone know how sharebuilder compares to etrade and ameritrade?
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