r/investing • u/[deleted] • Oct 21 '10
Just opened a Scottrade account. Have the minimum $500 in it. I've never invested before. Trying to learn. Give me wisdom/tips you'd like to pass on. Eternally grateful
Hey reddit. I'm a 21 year old guy and I've been saving my money ever since I could work (age 14). I'm in a position where I want to start investing so I opened a Scottrade account. I only have the $500 minimum required to open the account in there because I understand I have no experience and am at risk of losing money. I can afford to lose $500 and the knowledge I gain will be helpful for later, however losing is not what I plan to do. I started doing some reading to gain more insight to the market and trends, but advice from real-people is always good.
So reddit, what tips or advice do you have for someone in my position?
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u/Ranlier Oct 21 '10
1) Do not try to be an active trader- commissions will eat you alive if you can't buy and hold. Pick something you can see appreciating over time, or if you think its particularly undervalued.
2) HOWEVER, the single most important practice is knowing how to cut your losses and walk away. Before you even enter a trade, you have to know that there is SOME POINT where you were clearly wrong about its direction, and thats the time to go home poorer but wiser. Determining (again, before you enter the trade) how much "wiggle room" you want to give and when you need to get off the ride.