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A place for Get Rich Slowly readers to ask questions
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 Post subject: Investing in Stocks - I have $5000 in cash
PostPosted: Wed Mar 17, 2010 5:34 pm 

Joined: Wed Mar 17, 2010 5:27 pm
Posts: 2
Hi All,
Need some inputs on how to start investing in stock market.
I have $5000 in cash to start with.

1. Create an online account with E-trade or similar service - Which is best
2. Long term or short term.
I do not need this 5K in near future.
3. Stocks or Bonds
4. Good books to read
5. Websites to follow

Thank you for your time.


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 Post subject: Re: Investing in Stocks - I have $5000 in cash
PostPosted: Thu Mar 18, 2010 12:07 am 

Joined: Sat Jan 23, 2010 9:26 pm
Posts: 13
I think this book would be good to read:

http://www.amazon.com/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661/ref=sr_1_1?ie=UTF8&s=books&qid=1268895777&sr=8-1


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 Post subject: Re: Investing in Stocks - I have $5000 in cash
PostPosted: Thu Mar 18, 2010 10:02 am 

Joined: Wed Mar 17, 2010 5:27 pm
Posts: 2
Thank you for the suggestion...


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 Post subject: Re: Investing in Stocks - I have $5000 in cash
PostPosted: Thu Mar 18, 2010 1:50 pm 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5357
I have a few accounts with Etrade and have since the mid 90s. They used to be very good but I would not recomment them now. I've had as much as half a million dollars with them and currently have much less (not because I lost money but because I used a big chunk to buy a second home). Their custome service has been crappy the last few years even when I had a lot of money with them.

You might look into T. Rowe Price or Vanguard brokerage. A better idea might be just to invest in Vanguard mutual funds and keep your expenses very low.


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 Post subject: Re: Investing in Stocks - I have $5000 in cash
PostPosted: Sat Oct 30, 2010 7:33 am 

Joined: Fri Oct 29, 2010 7:55 am
Posts: 18
Location: Orange County, CA
Agreed,
$5000 in cash really isn't that much to be thinking about individual stocks. I recommend investing in some balanced funds.

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 Post subject: Re: Investing in Stocks - I have $5000 in cash
PostPosted: Mon Nov 01, 2010 8:33 am 

Joined: Tue Sep 23, 2008 6:05 am
Posts: 329
Well... technically, if one insist on learning individual stock investing or trading, it's best to start out with a relatively small balance. That way, the losses would not be so great. As to the original questions:

1. There are several good ones out there, and some also have low trading fees. However, which best suits you depends on your trading style. Still, I recommend looking at TradeKing.com. They're only $5 per trade, and I've read reports that they are fairly user-friendly. If you're more into buying-and-holding, another good one to look at is sharebuilder.com. That is a part of ING now, and they include ways for automatic re-investing. That's assuming if you are dead set on trading individual securities. Otherwise, I would recommend looking at Vanguard.com.

2. That depends on your investing / trading strategy. If you're not sure, please realize that there is no reason why one must invest in individual stocks. Most investors can do as well with Vanguard index funds, probably better since it minimizes investor risk.

3. In a properly-diversified portfolio, you should have a little bit of both.

4. and 5. highly depends on you your investment style. I personally recommend that everyone read the Boglehead's Guide to Investing first.


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 Post subject: Re: Investing in Stocks - I have $5000 in cash
PostPosted: Tue Nov 02, 2010 7:51 am 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1152
If I were you I'd open a Roth IRA at Vanguard & invest it in their S&P 500 index fund or their Total Stock Market Index fund. Either is a good choice. I'd read Jack Bogle's and/or Burton Malkiel's books on mutual fund investing.

But...that depends on your personal investing goals also.


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