Before you begin investing, you must ask yourself two questions. The first is: can I afford to lose all of this money and still be ok financially? There is always a risk in investing. The second question is: do I want to have fun or make money? If you’re not a professional successful stock analyst/broker, you might get lucky, but more than likely you won’t make enough to pay for your time.
Having given the disclaimer, I can tell you I tried my hand at this a few years ago. I invested a total of about $800 gradually over about a year. I kept the money moving in the markets with a low fee online broker called Sharebuilders. They were the cheapest at the time. There are probably others as cheap or cheaper now.
I started out in blue chips and learned that if you’re small time, you don’t make anything quick with them. I moved to tech and cyclical stocks. Some went from a $25 investment to $100 in just a few weeks. Others went from $50 to $15 just as quickly. Ultimately, I turned $800 into about $1250 in about 30 months. I thought that wasn’t too bad for a know-nothing investor. I could just have easily gone the other way.
Now, let me give you my real advice. I currently invest $200 per month with a broker that places my money in risk categories we decided upon together. In the past 8 months, I have made about a $150 gain on my investment. With an average balance over the eight months of $800. This is much safer and still pays a significant return. Additionally, this is a retirement account which means that for every $100 invested, it costs me about $73. So, make a nice return before the investing begins.
If you want 2007 to be a winning year for investmenst, stay with the tried and true. If you’re young enough, put about 1/2 of your investments in high growth high risk areas. Split the rest between moderate growth and a small amount kept liquid in a money market or such if you need it for emergencies. Find a broker who’s fees are not going to eat all of your profits and has a good track record over the past 5-10 years.