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Thread: Bought my first shares of stock today!!

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    God/dess Paris's Avatar
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    Default Bought my first shares of stock today!!

    I feel all grown up and responsible and stuff! I think I made a good plan and followed it, and here I am with extra cash to put into the market.

    Here is my plan that I've been following:
    1. Get out of debt! I paid off all my unsecured debt. (1999-2000)
    2. Saved a down payment and purchased my home. (2003)
    3. Created an "emergency" fund type savings account. This is a passbook account created for unexpected expenses. (2003)
    4. Purchased life and health insurance. (2004)
    5. Open a traditional IRA, and deposit the full legal amount for tax deducions ($4000.00 for 2005)
    6. Any additional money is now being invested in the stock market! (2006)


    My next step is to invest in real estate.

    I have earned a really good income as a dancer these last 7+ years. I have lived simply and with very few splurges. I do not buy designer anything, and I am a do-it-yourselfer in many things from sewing my own costumes to taking care of my own beauty regimen to projects around the house. To think that it costs $100 or more for a professional hair color (I do it at home for $15 or less). I've been doing my own acrylic nails for years now, saving myself $60 a month in upkeep of nails! With me doing my hair and nails alone I'm saving almost $2000 a year on these services.

    Anyway, that is a topic for another thread altogether!

    Just curious if I missed anything vital here? I know that the stock market is kind of like risk managed gambling, so I know what I'm getting into on that front. However, if I just spend my money willy-nilly on clothes and stuff, I really won't have a chance to earn any of it back.

  2. #2
    Sitri
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    Default Re: Bought my first shares of stock today!!

    Just find a constant source for keeping your interest and research going for the stocks. I use Investors Business Daily and they also have a website called Investors.com.
    For TV, I watch Mad Money. Jim Cramer is crazy and interesting.
    He was hot on JDS Uniphase 3 weeks ago and it went from $3 to $4 since then. I wish I would have bought a ton.

    Good for you and watching your money. You work too hard to give it away.

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    God/dess doc-catfish's Avatar
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    Default Re: Bought my first shares of stock today!!

    Quote Originally Posted by Paris
    I have lived simply and with very few splurges. I do not buy designer anything, and I am a do-it-yourselfer in many things from sewing my own costumes to taking care of my own beauty regimen to projects around the house. To think that it costs $100 or more for a professional hair color (I do it at home for $15 or less). I've been doing my own acrylic nails for years now, saving myself $60 a month in upkeep of nails! With me doing my hair and nails alone I'm saving almost $2000 a year on these services.
    The best investment advice you could give a dancer is right there. I see so many girls put too much money into clothing and cosmetics, not to mention eating out instead of buying groceries.

    Just curious if I missed anything vital here? I know that the stock market is kind of like risk managed gambling, so I know what I'm getting into on that front.
    Everyone has their own philosiphy on investing. I say while keep a reasonable eye on your investment, don't feel that you need to look up the quotes every day, or worse yet every hour. Seeing a big short term swing tends to make some folks a little too nervous and they end up making a rash decision they end up regretting later.

    Also take into account that what applies for hair and nails also applies to investment expenses. Sales charges, fees and taxes have a significant impact on your returns so try to find ways to minimize them.
    Former SCJ now in rehab.

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    Veteran Member StuartL's Avatar
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    Default Re: Bought my first shares of stock today!!

    Bravo!
    Excellent work. You are an example to us all. After getting all that done so far, you should be really proud. Lasting wealth and financial freedom are only really a result that comes from doing that for a long period of time.
    Who said finance was complicated?

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    Banned Melonie's Avatar
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    Default Re: Bought my first shares of stock today!!

    All right, Paris ! You have now 'turned the corner' and are officially a member of the American 'middle class' LOL. It took a lot of hard work and self-restraint though, didn't it !

    Sales charges, fees and taxes have a significant impact on your returns so try to find ways to minimize them.
    This is absolutely true in the case of stocks ...

    - first you have the issue of gains and losses in the share price, which can be taxed at two very different rates depending in whether you own the shares for more than 365 days or not. In your probable income tax bracket, selling a 'winning' stock before owning it a full year will result in about a 30% tax on the gain, whereas owning it more than a full year will result in about a 15% tax.

    - next you have the issue of dividends, which are always taxed at the 30% rate but which are a nice 'kicker' as they provide an additional income stream besides gains/losses in the share price. This isn't a recommendation merely an example, but check out WTU (which I purchased a couple of weeks back - and yes it really does pay an 11.5% dividend on top of the rising share price)

    - first and last you have brokerage commissions, which can range from $7 a trade to $50+ a trade depending on which broker you use, the type of order and the manner in which you made it, which stock market the shares are listed on, how large of a block of shares you ordered etc.


    Personal opinion on TV stock/invesment personalities ... while some of these talking heads are knowledgable, when you act on their advice you're getting precisely your money's worth (i.e. nothing) !

    More personal opinion ... small individual investors usually follow a 'herd mentality', and often more money is to be made by NOT running with the 'herd'.


    Lastly, owning stock shares essentially makes you a 'part owner' in the company whose shares you bought, so any 'betting' merely revolves around 'betting' on the future growth and profitability of that company's operations. The REAL betting in the stock market involves Call and Put Options on stock shares, where you don't really own anything other than the right to buy/sell shares at a future date at a 'guaranteed' price (which can result in huge gains and/or losses when the actual future share price is vastly different from your 'guaranteed' price).
    ~
    Last edited by Melonie; 03-30-2006 at 02:41 AM.

  6. #6
    Crissychan
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    Default Re: Bought my first shares of stock today!!

    Great job! I am currently looking to put a down payment so I know how hard it can be to live "simply".... I'm proud of you!

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    God/dess Deogol's Avatar
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    Default Re: Bought my first shares of stock today!!

    Yay!!! Congrats!

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    God/dess Paris's Avatar
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    Default Re: Bought my first shares of stock today!!

    With the stock market thing, I'm merely dipping my toe in the waters there. Most of my savings are in CD's and Mutual funds, with a tiny fraction in the stocks I picked personally. It never occurred to me to invest in a stock that was recommended by a TV or radio personality. I feel like that is just following the heard. It also seems like a person should know about the businesses they are putting their money into, not just blindly following advice of a TV personality that may or may not have a personal interest in the success and/or failure of a particular business.

    I did choose a discount brokerage ($7 per trade) for my first investments. My plan is to buy and hold. I'm in for the long haul as much as possible. By risk managed gambling I'm talking about circumstances beyond my (or anyone's) control. No one could predict that a natural disaster can destroy a business I/you are invested in. Or an invention may come along making the stock I'm invested in obsolete. Sort of like what VOIP and cell phones are doing to the traditional phone service providers.

    And, yes, it was a (seemingly) long road to get here. I am by no means making a ton dancing, but better than I'd be doing as an administrative assistant. When I first started dancing, I went a little nuts and spent a lot of money on frivolous stuff. I have always kept good records, and realized one month that I made almost $12,000.00, but my bank account had less than $1000 in it! That was a wake up call. I did not have that many expenses, and I know that I was just blowing money on crap like dancer clothes I didn't wear, and expensive hotel rooms while I was traveling to work (Motel 6 is my best friend now!!). And why oh why did I think I needed a matched set of ruby and diamond jewelry??

    I have learned, and I don't budget per se. I have a spending "plan". If a new cocktail ring isn't in my plan, then I leave it alone, or buy CZ. I'm usually just as happy with costume jewelry as I am with the real stuff. Little stuff like that can make a world of difference in a person's financial future. Those Seven jeans look really great, but so do the jeans I bought a JC Penny for $25 on sale. Oh, and the expensive clothes and outfits go out of style just about the same time the cheap knock-offs and wannabes do. So that $185 sweater is just as dated as the $15 sweater.

    Places that I do splurge: Medical care related expenses. My health is all I have, so I'm not going to take any chances and save a few bucks. If I am sick, I need to get myself healthy. I get regular checkups and stay on top of prevenetive care. I also spent a great deal on my implants. That is not something that I'm going to mess around with. I went to the best PS in the region for breast implants. I spent about $2000 more than what most PS were charging, but I feel that reducing my risk of a botched BA was definately worth the extra $$.

    I also splurge on Home improvement and repairs. This is my biggest investment, and I must keep it in tip top shape and of a good market value. I'm not going to put in cheap/ flimsy crap into my house- no way.

    I am now working on gaining a stream of income that is not tied to me dancing in clubs or at bachelor parties. In other words- getting out of the business. But this income has to be atleast as much if not more than what I have been able to earn as a dancer. General contractor is my first choice. It is a lot of work, but I find it fun.

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    God/dess britneyireland's Avatar
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    Default Re: Bought my first shares of stock today!!

    I don't know how focused you are on building your retirement fund, but there are better options for self-employed individuals than a traditional IRA.

    If you open a SEP-IRA instead of a traditional IRA, you can contribute 25% of your gross income with a ceiling of $41,000. There is also a new One-Person 401k profit sharing account with even more benefits.

    If you want more information, I'm a big fan of David Bach's book, Smart Women Finish Rich. His website is www.finishrich.com
    Rebecca Avalon







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    God/dess Deogol's Avatar
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    Default Re: Bought my first shares of stock today!!

    Sometimes buying and holding is not the right thing. The market as a whole moves up but that doesn't mean the individual stocks won't. Then there are those Black Monday days where the whole market corrects.

    A lot of people - they tend to follow half the rule, the rule being "Buy Low - Sell High." They let stock slide right down even though they could have made some cash. Then they end up working "Buy Low - Sell Lower."

    You will need to actively manage your stocks.

    I mean - GM use to be considered the bluest of the blue chip stocks. Things change - things change.

    If you got software that can email your black berry etc. when something is going on it might be worth it.

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    Banned Melonie's Avatar
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    Default Re: Bought my first shares of stock today!!

    yes agreed even in a retirement account you will still need to actively manage your holdings. In fact one of the major advantage of trading shares in a retirement account is that you don't have to worry about paying 'short term' (less than 365 day ownership) capital gains tax when you do trade shares ! Actually, the place where you want to watch the number / frequency of stock trades is in your general brokerage account where cap gains are taxable, where selling a stock 11 months after you bought it will result in a tax rate of some 30% but where holding a stock for 13 months will result in a tax rate of only 15%.

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    Veteran Member sunkissedbeachbunni's Avatar
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    Default Re: Bought my first shares of stock today!!

    Paris you are really inspiring! Congrats!

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    Default Re: Bought my first shares of stock today!!

    Quote Originally Posted by Paris
    With the stock market thing, I'm merely dipping my toe in the waters there. Most of my savings are in CD's and Mutual funds, with a tiny fraction in the stocks I picked personally. It never occurred to me to invest in a stock that was recommended by a TV or radio personality. I feel like that is just following the heard. It also seems like a person should know about the businesses they are putting their money into, not just blindly following advice of a TV personality that may or may not have a personal interest in the success and/or failure of a particular business.
    Diversification is the overall theme of investing. However, picking a winning stock is going to kick ass over the market return every time. Unfortunately, picking a winning stock isn't always easy.

    Cramer is an idiot. One of the reasons his picks increase is, as you discuss, the "herd mentality". But, that's not always a bad thing--if you can get in early.

    As for the mutual funds, you may want to look into exchange traded funds (ETFs). Those are much more tax efficient, for anything outside of a retirement plan. Also, if you like to gamble and want to take some risk to make some big bucks, you can consider stock options. I've traded options heavily in the past and did quite well. Unlike a typical stock where your probability of going down to zero is incredibly small, you can lose all your money with options. However, with options, if you pick a winner, you can double or even triple your investment in a very short period of time. I typically trade options on QQQQ. Also, I used to invest in near-bankrupt companies. One time I doubled my $10,000 investment in under 24 hours.

    If you are one who wants to make as much money as possible investing, you can't be afraid to lose from time to time. The secret is to make money more often than you lose it. Putting aside a small amount of your overall net worth for higher-risk investing isn't a bad idea. No more than, say, 10%.

    It doesn't take a genius to make money in a rising market. And the market should continue to rise slowly but surely for the foreseeable future.

    P.S. Paris, your boobs look very nice.

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    Banned Melonie's Avatar
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    Default Re: Bought my first shares of stock today!!

    Cramer is an idiot. One of the reasons his picks increase is, as you discuss, the "herd mentality"
    Finally, you've hit on an area where we are in complete agreement. Now if only there were a way to buy 'put' options after hours while Cramer's latest prime time tout convinces the 'herd' to temporarily run up the price of those stocks.

    I'm also becoming increasingly supportive of ETF's ... particularly in those ETF's that allow a 'small time' investor to dabble in currencies, commodities, and foreign markets.

  15. #15
    Sitri
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    Default Re: Bought my first shares of stock today!!

    Well, I didn't say purchase without doing your research! Remember, the herd isn't always wrong, and if you are on an island with a shit stock you still have a shit stock and you are lonely to boot.

    I have a mixture of stocks and mutual funds and ETFs. The ETF in the Russell 2000 and Latin America have done extremely well. So have most of the "Cramer" stocks. My personally managed portfolio is up 15% YTD. A lot of it from PTF, and IPS.
    The money I have under "Professional" management following a Buffet philosophy is up a paltry 2%.
    My best buys come from doing research using Investors Business Daily.

    So, I am not really worried about following the herd or the direction my dick is pointing if my results are good.

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