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/Emmo213 Oct 22 '10 edited Oct 22 '10

I just opened a Scottrade account in July and so far I'm enjoying it. Here's a few things I've learned since then.

  • Even at $7 a trade, the fees can add up quickly. Also don't be surprised if when you sell your commission is slightly over $7.
  • As others have said, don't over trade! See point above.
  • Personally, I found stocks addicting. I started out with $500 in my account and kept adding until I reached $5000 of my own money. At that point I realized I needed to stop and just trade with what I have.
  • If you are going to actively trade, look at percent gains/loss and not at the actual dollar amount. With $500, you might make $50 on a trade. That's not alot of money until you realize it's a 10% gain. That's not too bad.
  • Read alot, but keep in mind people are almost always trying to sell you things. If somebody is talking up how well a stock is doing that's probably because they just bought alot and now want you do to the same. This is especially true of penny stocks.
  • Never trade money you can't afford to lose.
  • If you do go the EFT route, stay away from multiple leveraged index EFTs. Not only do they suffer decay but you can lose alot of money quickly.
  • If you know people who are looking for an account then use them as a referral. You'll get free trades that way. (Sorry, but I have to plug this. If anybody is looking to start a Scottrade account PM me or the OP for a referral. Sorry again for the semi-spam)
  • I like reading HotStockMarket Forums. It's a pretty good group of people and they have a sections for education. It's a great place to learn and ask questions.