STEPS TO GET INVOLVED IN STOCK MARKET INVESTING
- First of all, be advised that these TIPS are not intended to apply to someone who plans to become seriously involved in the stock market but can help even that individual create a baseline with which to compare their progress over the years. (Serious investors who take an active daily part in their money matters will learn much faster than the rest of us.)
- Get some money together. Keep in mind that this portfolio of stocks will never be liquidated - it is meant to be a benchmark or basis with which all your other investment activity can be compared - don't put in more than you can afford to do without for the rest of your life. [ My initial cash came from a $733 U.S. Navy re-enlistment bonus received in January 1962. ]
- Find a broker. [ Being in Okinawa, my good friend
and cousin found a broker for me near where she lived in Milwaukee - she, of
course, had my power-of-attorney to act on my behalf at this time. ]
Nowadays, cheap brokers are fairly common. Convenience is more important that investment competence and advice - you're not going to be using them for advice - even the highest priced ones won't help you much unless you're already a millionaire with a good lawyer whose reputation will earn their respect and force them to act more towards your benefit than their own.
- Choose a strategy. I recommend a 10 stock buy and hold forever strategy for a basic, benchmark portfolio. These stocks will be held just to educate you on the workings of various aspects of the market. They'll help you become an informed investor over the decades - especially when you become wealthy enough to make some very serious and informed retirement oriented investments and/or when a specific opportunity presents itself to investors like you've become. (There's no sense detailing the things you'll be discovering, like splits, preferred shares, buy backs, buy outs, takeovers, reverse splits, dividends, small- mid- and large-caps, etc. because you probably won't understand them at this point - you will learn about them first hand sort of like 'on-the-job training' - which is the point of this strategy.)
- Choose your stocks. Here are 22 (1/21/12: 2
) specific stock
ticker symbols from which to consider when filling your 10 Stocks
Portfolio. [ My first portfolio had 2 stocks,
American Motors and Kimberly-Clark. One of my brothers worked at AMC
and the other at KMB - wasn't a sophisticated process back then but it got
me started. ]
• AA • BBY • BMI • BRC • BUCY • CBS
• CSCO • DD • ETN
• F • GM •
• JAZZ • JCI • KOSS • MMM • OSK • PHM • RAVN • ROK • SPPI • SYY • VZ
• (Click pop-up file of stocks I've traded since 1962 to see more which are color coded and sized
to reflect the relative size of the gains or losses associated with them over the decades.) - Watch your portfolio - not to be able to sell, but just to note the activity, price changes, and idiosyncrasies that apply to them based upon economic circumstances, the weather, politics or who knows what. This is a learning process - you won't graduate until your confidence level rises enough for you to be able to go all in (as in Texas Holdem poker) when the time is right - that time is still at least a couple decades away.
- Take advantage of any investment opportunities you want to put more money into in A SEPARATE PORTFOLIO. DO NOT TOUCH the 10 Stocks Portfolio - the learning experience will not benefit you as much when changes are made to it by you instead of by normal market activity.
- Use the other portfolio(s) to play around and get the ants out of your pants - you'll eventually learn the hard way why I created this web page for your benefit. [ Some people, me for instance, have to learn the hard way - it probably won't kill you - it didn't me. ]
- Finally, when you have a lot more money (maybe from selling your big home and moving into a much smaller, cheaper to maintain one) and a lot more wisdom about stock market investing (like things that go up always come down and vice versa), you will have what it takes to create a 'for real' portfolio that will keep you comfortable until you die. You may even learn, like a lot of other very rich and very experienced investors did when they TOO were caught short of cash back in March 2009, that sometimes it's smart to just sit on your cash in insured instruments until one of these periodic downturns comes and you can buy the "SPECIFIC STOCKS" that the tips on this page have allowed you to discover over the decades.
