DONATE TO KEEP THE MOVEMENT GOING

Investing

  • Rayet Intro To Investing By William Mason Jr. 1. Get a brokerage account. I recommend etrade & scottrade. Don’t get the account until you’re ready to buy. Once you open an account (the offer comes & goes) it comes with free trades for a limited time, so don’t waste free trades. Once you start buying, keep the commission below 1% if possible. I.e., commission on a brokerage account may be $8 per transaction, so make the entire transaction $800 or more. It’s not very beneficial if you buy a share for $ 92 and the commission is $8, your giving away 8% of the profits from the start. If the company goes up 9% in the year, you’ll really only walk away with 1%. You’ll learn more once you read The Intelligent Investor. 2. Books I recommend The Intelligent Investor by Benjamin Graham. Read up on Graham’s & Peter Lynch’s books. Make other literature secondary to these. 3. Get familiar with investing criteria. Fundamental criteria Return on capital Return on equity Return on assets Etc… Valuation ratios p/e (rarely if ever buy a share over 15) price to book etc… Profitability data Margins: Gross, Operating & net Etc… Growth over 10+ years Eps growth Revenue growth Etc… Historical price data Dividend data Payout ratio Dividend growth rate How many years of consecutive increases? Companies with 20+ years of uninterrupted payments are great to choose from. It’s a never ending learning process, so your judgment of the above criteria will be developed from practice. I recommend that once you start investing, to stay with an index fund. Buy individual companies once you build a solid foundation based upon the index fund(s). Sector etfs are also great and safe. Index funds & sector etf’s are the absolute best avenues for the investor who doesn’t want to put in the hours and hours of daily studying. Even those who study for hours a day will still go with an index fund(s) and/or sector etf portfolio. Sector ETF’s 1. Xly – consumer discretionary 2. Xlp – consumer staples 3. Xle – energy 4. Xlf – financial 5. Xlv – healthcare (my favorite) 6. Xli – industrials 7. Xlb – materials 8. Xlk – tech 9. Xlu – utilities Index Fund (etf’s) 1. Spy – S & P 500 2. Dia – dow jones Leverage plays 1. Short – spxu a. Spxs (3x’s) 2. Long – spxl (3x’s) Be familiar with “Dollar cost averaging”. But still adhere to only buying @ a p/e of 15 and less. Reinvest every dividend received. Websites Google.com/finance Investopedia.com This site has a practice account, I strongly recommend you using this for at least 6 months. Considering the current state of the market, it’s not a wise time to buy, so only practicing now is best. Stocksplithistory.com By all means, review other sites, these are just a few. Ask any questions. I’ve learned that there are 2 main types of people when it comes to investing…the fearful and impatient. I’ll choose the impatient over the fearful 100% of the time, keep that in mind.

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