Brent asked in Business & FinanceInvesting · 10 years ago

Help on buying stock?

I'm 16yrs old and have been interested in buying stock in companyes i dont have much money (about 300) should i buy into bigger companys such as ATT with the new iphone coming out and them just buying out t-mobile? or should i buy in MCD or some cigarrette company? please give me ideas or tell me who you have bought from if you feel okay with it and i would apreciate it if you told me why you bought from them and how much the stock was. Also any companys i should stay away from?

4 Answers

  • 10 years ago
    Favorite Answer

    Start with some basic books to teach you the fundamentals. Two excellent reads are The Complete Idiot's Guide to Investing and Investing for Dummies.

    You need to learn also some important concepts in investing, such as dollar-cost averaging and compound interest - two of your best friends to make money for the future.

    Also you need to think of what you are investing for exactly, not to mention how long you want to invest

    and your risk tolerance.

    If you want to get into the market but don't know what stock to pick, consider an index fund. Instead of throwing all your eggs into one basket (one company), index funds can invest you in dozens, hundreds, or thousands of companies all at once and so there is less risk.

    You then need to pick a company to invest through. Some of the best are Vanguard, T. Rowe Price, Fidelity, and Schwab. Avoid the big banks like the plague. Don't let them rip you off with loads (sales charges) and fees. Check how much the company charges you as an expense ratio. A good one might charge you 0.2-0.8 %. If they charge more than 1% than go somewhere else. And if they charge any kind of 12b-1 fee, hold on to your wallet and RUN.

    Getting individual stocks make more sense if you really want to buy stock at a place you work at, or want to really get involved and are the hands-on investor type. If you want to be more passive and have things grow over time, index funds make more sense. If you want to see some of the variety out there,

    For more information, try looking at

    and play with it, comparing funds with more or less risk.

    Do some reading online such as for some important investment truths.

  • John W
    Lv 7
    10 years ago

    Investment is about risking money in hopes of making more money. There are basically two ways to deal with risk, diversification and money management which is proportioning your money according to risk and returns. Actually the diversification and money management are mathematically related, one could even say they are the same concept. Anyways, with diversification, the more concentrated the more risk but the better the potential reward while the more diversified, less risk but the rewards are more mediocre if any, the optimum for your portfolio is neither a single investment nor is it all investments and it's better to be over diversified then under diversified, it's kind of like choosing where to stand on the edge of the cliff, the flat part to one side is far preferable to the steep part on the other side. With a small sum of money, it isn't feasible to diversify yourself but you know that investing in a single company is assuming the maximum risk risk hence when starting out it's best to accumulate your money in a low fee, no load index fund which by definition will beat half the investors out there. Of course, $300 is really not much money at all and the commissions themselves would represent far too much of a percentage of your funds so you are actually better off with CD's, Treasury bonds or a high yield savings account until you've accumulated enough to actually invest. Note this means regularly putting a portion of the money that you make into such accounts, you can't expect much from a one time investment, you have to divert cash flow in order to make a difference, developing the discipline to divide your money into categories such as "To spend", "To save", "To donate" and "To invest" will do much for being able to invest successfully later on.

  • 10 years ago

    $ 300 is not a lot of money i would personally invest in a stock that has a huge upward potential and that is a little more risky. Look into some banks in europe they are currently doing pretty bad and some are awaiting a bailout, a bank that is strong but is just down because the whole market is will shoot up once markets start going up. You definitely have to do some research on that to check out which banks are good. Most euro banks are listed on NYSE in the form of (ADR) which means they have been converted to us dollar and to trade on the nyse so you dont have to open an account to trade for example on the London stock exchange. Do not invest in these unless you do your own research. Some examples of euro banks are Barclays, bank of ireland, lloyds bank, banco santander, national bank of greece. These banks are currently pretty risky, invest at your own risk.

    If you want to take less risk go with a blue chip companies like general electric, companies that are healthy and that have been in the market for quite some time.

  • 10 years ago

    I'm a college student and have been looking into doing the same thing. I was searching around the internet looking for good articles and sources that I could learn the basics of buying stocks. I came across a website that has a lot of articles on the basics of investing. It was very helpful for me.

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