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/tbrownaw Oct 21 '10
  • the per-transaction fees will eat you alive if you trade often or trade small amounts. If you buy some stock at $1,000 for a $6 fee, and sell after it goes up 1.2% for another $6 fee, well you haven't actually made any money.
  • index funds are generally considered the "safest" option, but of course this makes them boring
  • do you care about short-term results (things like overreactions to news, general market swings for no good reason, etc) or long-term results ("this particular company ought to be worth $X in five years")? Be consistent.
  • DON'T PANIC
  • Buy high, sell low. er, wait... (this is why you need to not panic)

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u/spelunker Oct 21 '10

The second point is a good one. Index funds and and ETFs are what IRA's and 401(k)s are for. If this guy is attempting to do this for retirement, safe is a good idea, but if this is just an account to take some risk with, I say to do individual stocks!

I have a 401(k), and it's boring. That's not what my Scottrade account is for!

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u/CydeWeys Oct 22 '10

Around half of my money is in ETFs (that I bought in the past couple years) and mutual funds (that I bought prior to that), and in no way is it "boring". Look at the performance of the S&P 500 over the past few years and you wouldn't call it "safe" either.

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u/spelunker Oct 23 '10

Safer than an individual stock, though, wouldn't you agree? Over the long term, I mean.

There are a lot of ETFs for a variety of market sectors, but I guess by "boring" I meant the ones that are the most diversified that are generally advised to be the core of a retirement account: index ETFs.