Investing

MultiMan

Banned
I have grown a passion for investing. Does anybody here share my interest? In the past 3 weeks I have been reading books and doing research. I am still a novice, but today I made my first stock and fund purchases. I am learning alot from my broker who is a friend of my dad's. He has 20 years experience and he also deals with money mangers who manage hundreds of millions of dollars so I get to hear what they have to say. I am probably going to make a career out of it. I am currently a fresHydromaxan business student.
 
I really want to get in it too. I have a few favs I watch but I havent made a purchase yet. I'll probably do the online low cost type of account. I dont have a money flowing but you gotta start sometime I guess. Got any Favs? PM me if you want to keep em quiet.
 
I don't know anything about the stock market, but my uncle, who works for a company called Princeton Review, told me that they may be releasing a very hot product within the next 6 months. I think I may invest in it, but I don't know how to do it? Do I use E-trade? Anyone know how to invest online?
 
S

stillwantmore

Guest
Investing is a very good thing to be into either career wise or, in your personal life for your future. I cannot wait to be in a little better financial situation and then I plan to also begin investing. Playing the stock market (etrade, watching stocks on tv/newspapers) is not the way to go 99% of the time. Talking to a financial adviser is usually the best way to go.

Contrary to what a lot of people may think, you dont need any net worth to begin investing. You can start with $25 a month.
 
xtremegamer said:
Do I use E-trade? Anyone know how to invest online?

The best place you can get a ton of information is go to www.motleyfool.com its got real good articles, and a S load of articles on everything!! I get to swamped going through it all. Let me know how you make out.
 

Xulf

Member
since interest rates are so low, the price of land and real estate are artificially inflated. Therefore once the rates start going up (which they will since there is almost no way they can go any further down) real estate will not appreciate as it is known to normally do, but it will end up dropping in price.

Think of it this way, say there is a house that 5 years ago was $200,000, and the interest was 7% paid out over a 30 yr loan.

P = [(r*M)/[1-(1+r/n)]^-nt]/n

where P = the payment, r = the annual rate, M = the mortgage amount, t = the number of years, and n = the number of payments per year.


you get a monthly payment of $1330


Now if you were to buy that same $200,000 house with a 3% interest payment over 30 years you would pay

$843 a month, which is quite a difference, and now people who could not normally buy the house/land can easily afford to do so. But, now the seller sees an opportunity to make some money, so what do they do? raise the price to $250,000 instead of $200,000. By doing this the monthly payment at 3% over 30 years would be $1054. This is still much lower than what someone would be paying 5 years ago,

Why can they do this? Supply and Demand. At a lower payment more people are able to afford the house, greating more demand for more houses, which as a result drives up the price. The purchaser of the house is still happy b/c they still end up getting a bigger house than they thought they could afford, and the seller makes a nice profit at the same time. The problem will come down the road when the current owner goes to sell the house and interest rates are back up.

If they are back up to 7% and are trying to sell the house at $250,000 and a 30 year loan, the payment is now $1663 a month. That is going to be much tougher to sell to someone b/c its nearly 60% higher than what you are currently paying for it, so the demand will be low and nobody can afford to buy it. So in order to sell it the owner has to drop the price, which ends up causing them to lose money.

So basically, right now isn't a bad time to buy a house that you plan on staying in for the rest of your life, but if you plan on buying some land or a house that you hope will appreciate in 1-5 years and sell, you have to watch out.

Hopefully all of that makes sense
 

MultiMan

Banned
Well, a lot of money is going to be made in China. It is growing 50% faster than the United States has ever grown. Their "industrial revolution" will only take 8-10 years because of technology. A stock I currently like and plan to hold for as long as 20 years is PTR Petro China. It is China's largest oil supplier. Only 2% of people in China have cars. As the economy and per capita income grows, people will start to buy cars.
 

MultiMan

Banned
SWM, I have a full service broker. It costed me 90 dollars to buy 5400 worth of stock. I plan on learning a lot and then going off on my own. It all depends on what kind of service you want and how much money you have.
 

Xulf

Member
Online investing is 'cheaper' per transaction than using a broker, but I use that term losely. If you invest online sure it may cost you only $10-$20, but your order is batched with other peoples orders to make one bulk order. They then try to match this number with there own customers who selling the same stock at the same time or go through another brokerage to find people who selling a similar number. As a result of being batched together, you may not get the cheapest price on your stock, b/c they are looking to fill the full order as quickly as possible.

If you are using a broker, they have the ability to look over all of the amounts other investors are selling that stock for, and can even make multiple purchases to reach your order amount. If you are buying in large bulk, buying for an 1/8 of a point less per share will end up saving you hundreds or even thousands of dollars. So the extra $50-$100 you may spend to use a broker is well worth it.

On the other hand, if you are only buying a couple hundred dollars worth of stock, you might as well use an online brokerage firm.
 

brennaja

Member
All of None Limit Orders, my friend. Won't get the shaft there.
 

MultiMan

Banned
It doesn't matter Nexus, there is nothing I can do about it. It is certainly far from the main reasons China's economy is finally growing. It is growing because it is starting to turn into a capitalist economy. Communist controls have never worked. It is not just that, it is the fact it has over a billion consumers. A lot of money is going to be made, you might as well get in on the action.
 

Xulf

Member
MultiMan said:
It doesn't matter Nexus, there is nothing I can do about it. It is certainly far from the main reasons China's economy is finally growing. It is growing because it is starting to turn into a capitalist economy. Communist controls have never worked. It is not just that, it is the fact it has over a billion consumers. A lot of money is going to be made, you might as well get in on the action.
You are both right. The fact that it has gone away from communism means that it has allowed foreign investing and outsourcing from other countries. The fact there are 1 billion consumers helps, but only to the point that these consumers have money. You can't buy anything and spend without an income or residual funds. China is growing b/c we are dumping tons of jobs and money that were once here, then Mexico and now there. Our companies get products made for a much cheaper price, and they get businesses, jobs, taxes, and money from selling raw materials to these businesses.

They wouldn't be growing as rapidly as they are if both stimulus's didn't occur.

That all being said, it is much easier for them to grow b/c the technology now is much greater than it use to be, and we are basically giving it away to help ourselves. One huge restriction for them though is they are only allowed to produce so much pollution a year (every country has a certain number of pollution credits that they can use or sell). The factories that they are making themselves are dumping out tons of pollution.
 

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