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Individual stocks?
Old 08-20-2012, 04:16 PM   #1
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Individual stocks?

I'm fairly new to investing. My only strategy thus far is the "set and forget". I invest monthy into the TSP life cycle fund (2050). I am interested about anyones experience investing in individual stocks. Who do you go through to trade stocks? Who do you invest in? I'm clueless as to how to strategize investing in individual stocks.
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Old 08-20-2012, 04:22 PM   #2
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You are all set. Check back in 2050.

Seriously.
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Old 08-20-2012, 04:37 PM   #3
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You are all set. Check back in 2050.

Seriously.
+1.

Stick with funds.
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Old 08-20-2012, 05:11 PM   #4
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To buy/sell stocks you generally need a brokerage account. You can establish such accounts at firms like Vanguard, Fidelity and Schwab. After you deposit some cash into your account, you can use it to buy stocks.

If you want to learn which stocks to buy, do some reading, maybe lots of reading. One place to start is http://www.fool.com/

One advantage of individual stocks over many/most funds is you don't pay tax on increases in value until you sell. If you buy and hold a stock for decades, you won't pay tax until you sell, and you get to choose when that happens.
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Old 08-20-2012, 05:27 PM   #5
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Murphy's law:

Congratulations you have chosen a good Traget date Mutual Fund!

So now you want to start investing in stocks or you want to start trading stocks? You must first understand the difference. Fool.com is good website and so are many others. I would recommend www.morningstar.com - it has an education module for investing in stocks, Mutual funds, bonds etc. Very thorough education. Another website is AAII.com.

If you want to start trading stocks, be prepared to pay TUITION to the Market. Yes, you will lose more than you make because trading costs will add up whether you make money or not. All the best

Rick
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Old 08-20-2012, 05:27 PM   #6
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I'm fairly new to investing. My only strategy thus far is the "set and forget". I invest monthy into the TSP life cycle fund (2050). I am interested about anyones experience investing in individual stocks. Who do you go through to trade stocks? Who do you invest in? I'm clueless as to how to strategize investing in individual stocks.
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+1.

Stick with funds.
+2

I started with the TSP, and then after maxing out my yearly TSP contributions I branched out into mutual funds from Vanguard (mostly index funds, and also Wellesley). I have been happily retired for almost three years with everything in TSP and Vanguard funds.

It was wonderful to have the TSP G-Fund during the 2008-2009 recession, since it is guaranteed to never lose value. The target funds are great too.
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Old 08-20-2012, 05:33 PM   #7
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To the OP:

I invested in MF for years before I bought my first individual stock. The mechanics of buying individual stocks is easy. The problem is in dealing with your emotions after you have clicked "Buy".

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Old 08-20-2012, 05:58 PM   #8
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Thanks everyone

I think the main reason I am interested in individual stocks is to use them more as a hobby than a part of my portfolio. Maybe make a few bucks here and there, maybe it would be fun? I would probably end up stressing myself out though, and wouldn't be worth it.

Thanks for the links.
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Old 08-20-2012, 06:09 PM   #9
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Yes, it could be fun and certainly educational to see what it is all about. Yes, you could make a few bucks, but you could lose those bucks just as easily.

So, as long as you only put down what you can afford to lose, it's OK. But there is a lot of reading that one needs to do first, if it is going to increase your chances to win.

By the way, I found another video.

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Old 08-20-2012, 06:26 PM   #10
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You don't need to learn anything about individual stocks. All you need is the TSP and maybe a couple funds one for a Roth and one when you have taxable savings to invest. I think a lot of the TSP lifecycle funds but later, if you have after tax money to invest you might want to just hold the G fund and maybe F fund and hold total US/foreign market mutual funds or ETFs in taxable accounts. But to start you are doing great already.
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Old 08-20-2012, 07:36 PM   #11
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One fairly sensible way to dip your toe into common stocks, is though a dividend reinvestment program.
I do some of this in addition to purchases and options work through a regular broker.
The dividend reinvestment plans, or buy direct plan, starts with you finding a stock you'd like to own, and then through the company's website, determine what type of plan they have and how to get started. You'll will find that many plans use a common administrator. For example, I buy five stocks this way, and at one point they were all managed by Melon Bank. All were on one statement. Very nice..Recently some have moved to other providers, but Melon remains one of the largest.
You need to watch for excessive fees, as these plans do vary. A good one will let you in fee free with a $250 deposit. All of mine allow as little as $25 additions and dividends are added automatically. I do not incur any fees until I sell, and then they are reasonable.
You can pick the types of stocks you personally like of course, for me it is blue chips, with a decent div and a long record of raising them.
My plan includes COP ( and now PSX that was spun off) EMR, DUK, and SE.
As these plans do not allow you to turn on a dime (mine only buy/sell one day per week) you want stocks that are fairly stable and not likely to disappear.
Good luck!
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Old 08-20-2012, 08:03 PM   #12
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To the OP:

Whether you are going to buy individual stocks or not, you may want to know a bit about stock trading, how the market works, and to know some of the terminology. It's good to have some general knowledge.

An analogy is the following. Although I do not want to become a landlord, I still find it interesting to read about how one would screen and deal with tenants, how to protect oneself against deadbeats, the hassle of home repair, etc... Some people do not even care to know, but some do. Some landlords make good money, but without knowing what they have to do, one might just think that it is an easy way to make money.

So, for basic stock investing, a classic that I read is How to Buy Stocks by Louis C. Engel and Brendan Boyd. Mine was an old edition, and I do not know how revised editions have been updated. Still, the basics remain the same, even if you now click on a screen button like the Etrade baby instead of calling up your broker on the phone like the really old days. You will learn about different stock exchanges, the difference between preferred and common stocks, margin trades, options, etc... These are the basic things to know.

The above book teaches you nothing yet about how a stock should be valued, meaning how much one should pay for something. Well, that's a life-long lesson that everybody is still learning. But one should start with the basics first. I am sure that there are other good books, but the above was what I started with.
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Old 08-20-2012, 08:52 PM   #13
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Old 08-21-2012, 08:43 AM   #14
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............I think the main reason I am interested in individual stocks is to use them more as a hobby than a part of my portfolio........ .
Get a dog. You will get more exercise, too. An unlike your broker, they really do love you.
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