College Student from the Philippines going to invest in stocks... How do I start?
Hi. I'm a junior student in the Ateneo de Manila University and has been thinking of investing in stocks. I can come up with the capital but I don't know how much. Then there's the matter of getting a good broker and the investing act itself. I don't know how or where to begin. Please help.
Investing - 3 Answers
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1 :
You will need some good books on investing. For buying individual stocks, check out - The Morningstar book "The 5 Rules for Successful Stock Investing", by Pat Dorsey, - "All About Stocks", by Esme Faerber For Mutual Funds, check out: - Mutual Funds for Dummies, by Eric Tyson - http://www.invest-for-retirement.com for a free downloadable book - The Boglehead's Guide to Investing The first step in investing is to define your goal. What do you want to invest for? The second step is then to define your time horizon based on this goal. How long until you need the money? Doing these two simple steps will help determine what to invest in and how much risk to take. Don't just put your money in an arbitrary investment just so you can say that you invest. Make your money work towards some goal. If your time horizon is short, you will need to remain conservative and stick with money market accounts or bond mutual funds. If your time horizon is longer (7 years or longer, for example) you can then use a mixture of stock and bond mutual funds. For good, low-cost mutual funds, I suggest www.vanguard.com or www.fidelity.com
2 :
There are plenty of on-line investment brokers. I use TD Ameritrade, but I've heard that eTrade is good, Scottrade, and I also use Fidelity.com because they have an awesome website. Try The Motley Fool's website and discussion board; it's a great place for any level of investment expertise. Figure on paying around $10 per trade (TD Ameritrade charges this). Since you are investing cash (as opposed to a 401K, which doesn't get taxes on short-term gains) you will probably do better with long term investment, though I have had great success using mechanical formulas (you can find out about them at http://www.mechanicalinvestor.net/ and http://www.backtest.org/) If you are going to be trading short term (holding less than a year) commissions will eat up most of your profits unless you invest at least $2000 in each trade. It's better to "pretend" invest for a while, until have proved that you can make money at it. Create portfolios for yourself using different schemes and see which one does the best for you. Keep at it. Learn all you can. By the time you get out of college and start earning enough money to seriously invest, you'll be ready.
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