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Newby with stocks and trading..... Advice and tips

Tremonti

Fractal Fanatic
Never done online trading and want advice on where to go to start. Nothing massive money wise.... Just plat around with some small amounts until I get the hang of it. Any guidance would be appreciated. Thanks!
 

FractalAudio

Administrator
Fractal Audio Systems
Moderator
Advice?
Don't "play around with stocks".

Right now the market is overvalued. I would wait. A recession is coming. Probably next year. If not next year then the year after.

Once the recession hits and the market corrects put your money in a simple index fund. My recommendation is one of the Vanguard or iShares ETFs that track the S&P or Russell 2000.
 
I agree with Cliff on this. IIRC, mutual funds outperform most stock pickers, and just putting money into a mutual fund, while less "fun", is the much safer bet.

Now, if you'd rather look at stock purchasing as a less fun way of gambling rather than going to the casino, then I'd look at a website like Investopedia. They have pretty good articles and educational pieces on investing, as well as a stock simulator (which is a less risky way of playing the market).
 

peteri

Experienced
My day job has been working at Investment Banks and brokers for the last 30+ years.

Advice, as others have said - don't

If you do, accept some truths - as an amateur you have very little chance of winning, not because it's rigged - just because, you're against professionals, remember money is like energy it's not made it's just moved around - therefore if you make it someone loses it.

Professionals have access to news and research in volumes and quality which you won't believe, plus they specialise in something for 10hours + every day surrounded by others doing the same.

That breeds a very different knowledge than you can have

Then they can execute trades way, way, way faster than you can and often at better prices

I've seen friends lose massive amounts of money forgetting the above.

But you can make money.

Look for companies which you like, believe in. Research them, make sure you understand what they're doing and why, then invest. But you have to do it with a long/medium term view - if you think you can buy something today and sell it next week for a profit (meaning you've paid back the dealing spread, charges, stamp duty etc) - you won't, except in exceptional circumstances.

So buy well, hold stock for a while, don't try and day trade and you can make a nice little bit of money. If you're lucky and pick well.

As others have said, indices are also an excellent way to invest historically too - and takes a lot of the above out.

People can and do make a lot of money in the stock market and you can too - but you can also lose a lot, the best way is to stumble on the next Apple/Facebook/Google early to be honest and if you talk to professional investors understanding when to get and get out of trades is the toughest lesson - you have to ride winning positions long enough to pay off the ones you lose on.

And as above - at the moment, I would say play trade for a while - keep a spreadsheet of what you would have bought and track it to see how you'd have done, the market is overvalued - the US, Europe and UK are in strange places politically (I'm in the UK, don't even start on that!), interest rates are insanely low etc.etc.

Hope this helps - oh and read everything you can, make sure you understand it too
 

JJunkie

Power User
Are u sure u want to trade though? Or do you mean invest?

My opinion? Wait for bitcoin to retest the 6500 support area, buy some and hold it for two years. If you like the gambling aspect associated with trading then send the bitcoin to a derivatives trading exchange like bitmex or bybit for a low leveraged long. Now u all think im a scammer right?
 
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VidarAus

Inspired
Advice?
Don't "play around with stocks".

Right now the market is overvalued. I would wait. A recession is coming. Probably next year. If not next year then the year after.

Once the recession hits and the market corrects put your money in a simple index fund. My recommendation is one of the Vanguard or iShares ETFs that track the S&P or Russell 2000.
This is very sensible advice. Cliff knows amps and investing it seems!
 

hippietim

Fractal Fanatic
Reminds me of the much overused joke - "The easiest way to end up with a million bucks in your brokerage account is to start with 2 million."
 
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