Beginner Investing

xavioleary

Hi,

I was wondering if anyone out there could advise a newcomer as to how the stock trading game works. I've got a little money to burn and am intending on setting up a savings account with most of it but I would like to see how far it could go on the stock market. I've been doing a lot of research into this recently but when I go looking for more insightful information (mainly online) it seems that there are just far too many sources offering oftentimes conflicting information. The whole thing is leaving me pretty overwhelmed.

I'm just hoping that someone could break down the basics for me in a more easy to understand language and perhaps offer some recommendations as to what steps I should take in order to start investing.

Thanks in advance!

Frogdog

My recommendation to you is to educate yourself first. To do that, start reading books on the subject. I'll give you an easy to read recommendation - The Millionaire Teacher by Andrew Hallam. This should start you off on your education and is by no means a "one stop shop" for investing.

topper_harley2

xavioleary wrote: »

I'm just hoping that someone could break down the basics for me in a more easy to understand language.

Ultimate basics: buy stuff at price X, sell stuff later at more than X

Most important word: "compounding".

You cant expect someone on boards.ie to post a complete guide to investing, there are literally thousands of sites online devoted to this already. I'll give you one of those: http://www.investopedia.com/university/beginner/. Funnily enough, it has a section "Investing 101: Preparing For Contradictions", which ties in nicely with your point about getting conflicting information....

Above book recommendation by Frogdog is good.

xavioleary

Thanks for the advice.

I suppose to get a little more specific, could someone enlighten me as to how exactly I go about buying shares through a stockbroker? From what I gather I simply hire them to manage my portfolio on my behalf whilst they do as they invest my money into whatever stocks they deem prudent. It appears I would essentially just have a consultation role or one whereby the broker does all the market research and then simply seeks my authorisation before actually purchasing shares. Is this correct?

Secondly, given the substantial fees charged by the leading stockbrokers, are there any realiable but more affordable online brokers out there who you would recommend?

And finally (and perhaps a little off-topic given my original post), I am also interested in opening up a lower-risk savings account as well. I'm just wondering if you guys could advise as to what financial institutions offer the best interest rates? From what I gather, the post office seems my best bet as most banks are offering next to nothing in interest.

topper_harley2

xavioleary wrote: »

Thanks for the advice.

I suppose to get a little more specific, could someone enlighten me as to how exactly I go about buying shares through a stockbroker? From what I gather I simply hire them to manage my portfolio on my behalf whilst they do as they invest my money into whatever stocks they deem prudent. It appears I would essentially just have a consultation role or one whereby the broker does all the market research and then simply seeks my authorisation before actually purchasing shares. Is this correct?

Secondly, given the substantial fees charged by the leading stockbrokers, are there any realiable but more affordable online brokers out there who you would recommend?

And finally (and perhaps a little off-topic given my original post), I am also interested in opening up a lower-risk savings account as well. I'm just wondering if you guys could advise as to what financial institutions offer the best interest rates? From what I gather, the post office seems my best bet as most banks are offering next to nothing in interest.

Brokers can be execution only (where they offer no advice, only executing the trades you instruct) or advice based where they offer advice as well. Do you know the difference between a stock broker and a mutual fund manager, or what a mutual fund is?

Re: recommend a broker....You really need to search for these types of questions. Any rudimentary search of this forum would throw up TDWaterhouse or Degiro as online brokers. You'll get much more help asking questions that aren't "let me just Google that for you" type questions.

Regarding savings, it totally depends on what type you want e.g. lump sum or regular smaller amounts etc.
Post office rates are not much better, if at all. They currently don't offer a regular saver. Also, their NTMA solidarity bond rates have been slashed after lobbying by the banks. Hence i don't think PO is up to much for savings. One plus is no DIRT. See here for latest best buys by type
http://www.askaboutmoney.com/threads/savings-best-buys.90481/

The spiv

I would recommend ggfinances.

This is an app/website which follows the NYSE in real time, they give you $10000 in fake money and by "investing" you get a good feel of what the markets like.

I used this for a few months before setting up a trading account in the states and it definitely helped me out.

It will teach you about Limit buying/selling, Stops and Shorting amongst other things.

Better to learn and lose with fake money than lose with the real cash!

manonboard

Degiro hands down i think. They are cheap and quick. since its unlikely you are loaded with cash to burn. Fees add up quickly. Degiro is cheap enough to do small trades i find.

If i could suggest one thing above all else. Play the safe stocks, dont buy if you fear missing out on a stock, its constant game. Buy when you know you are very likely to make a profit. You'll make mistakes, dont compound them with gambling. Lots of stocks stay 90% of time above X figure. They dip often enough, buy the dips, wait for the rise, sell before you get greedy. Just be patient. Emotional reaction is how i lose 90% of my losses. Its a good lesson to get out of the way early.

Political news affect global sell offs are a good time to buy. Things tend to get forgotten about. Dont buy in the country that something bad is happening. Buy in a country that is likely not too affected but just got the jitters.

xavioleary

Thanks for the advice everyone! I'm gonna look into it some more and definitely gonna give one of those trading simulators a go!