The Stock Game
Recently a fellow blogger of mine has been trying to convince me of entering the world of stocks. It has always been a fantasy in the back of my head, but due to recent circumstances (let's just say....mis-handling of money), I have been quite hesitant. On one hand, I could make a wrong move, become greedy or get unlucky and there goes a lump sum of money. On the other hand, if I do my research (and I do happen to read many articles online) and with a little bit of luck, I can make some easy(?) money. In fact, my money will be doing my work for me...right? Actually, I've tried that before...hah! Now, seriously, I have been checking out the Investopedia Simulator (which I highly recommend for anyone thinking about getting into stocks). It allows you to play around with $100,000 in whatever stocks you please. It has plenty of research tools and guides as to how the world of investments (which also involves mutual funds and bonds) really works. You can waste hours of your time reading all the online documentation.
So, is playing the stock market much like playing a game of poker? In some sense, I think it is. No matter how much research you do (or confidence you have in a hand), there is always a risk involved. Am I willing to constantly stress myself, wondering why my stock keeps going up and down, and hoping to at least make my commission back? Probably. Why? Because I believe in self-masochism. Also, I like to take the road less-travelled...or is it the rockier road? I don't know, whatever it is...I'm giving it serious thought. Hopefully my stock won't look like this within a few weeks of buying.
Well, I have invested $750 (not real money) in IBM, and in about a week I've made $35 (although there was a $20 commission charge). That was investing without really doing any research. So, I am about to begin a journey through the myriads of online articles and reports in hopes of finding the diamond in the rough. Economist.com here I come! Feel free to leave your comments, insults or discouraging advice.
posted by faranv @ 8:11 PM
2 comments
2 Comments:
I'm glad your finally giving it some good thought!
Investing your money is the best thing you can do with it at this point... While the average Joe is smirkly laughing at himself for putting his money in a 'high-interest' savings account, where money is often 'locked' in for a period of say....10-15 years earning annual interest rates of about 3% (3%/annum is a very high interest rate for a bank to pay), he's unaware of the wonders of the stock market.
Most people think the best way to get returns on your savings is to put it in a bank and simply generate interest on it...WRONG! The fact is, most people dont even know how the stock market works!! Think of it, only a small percentage of the population puts their money into stocks...and who are these guys? well educated, and often well-off individuals. Most people beleive you need a large amount of money to invest, this is sooo clearly wrong!
Instead of locking my money up in a bank, I can invets (as faran did) in a SECURE and STBLE company, such as IBM, you dont even have to constantly'u watch it, within a week, IBM's stock eassssilllyyy goes up by 2-3% (and thats extreeeemly low growth, its more likely to go up by about 6%), so the interest that you make in a year, you'll be making in a week!
Seriously faran, think hard about it, even if you only have $1000, invest it! You'll get much higher returns and you'll even feel good about yourself.
The only stocks that you need to watch constantly are high-volatility stocks...but even those, if you keep an eye on them, you'll make a quick buck! those move up and down 10-15% daily.
BEST OF LUCK
let me know when your in
But, here's my issue. I don't deposit money in a bank to accumulate interest. I leave it in there for it's security- something that can't be guaranteed, even with a steady, stable stock such as IBM. Again, there is risk involved, but, I don't think the decision is as easy as some make it out to be.
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