TallAdam85
3rd Black Belt
I realy don't know much about stock just that goggle is worth alot now I have sirrius radio and love it if XM and Sirrius join think the stock of Sirrius will go up and would it be getting some
adam
adam
Stock Question
- Thread starter TallAdam85
- Start date
michaeledward
Grandmaster
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Please do not buy or sell any individual stocks without a greater understanding of what you are doing. It is a certain way to get burned.
If you have money to 'play with', as you might when you visit a casino, then it could be a good learning experience. But, buying a stock because of a merger is not a sufficient reason.
A much safer investment would be to put your money into a money market account, or, buy an indexed fund of some sort.
If you have money to 'play with', as you might when you visit a casino, then it could be a good learning experience. But, buying a stock because of a merger is not a sufficient reason.
A much safer investment would be to put your money into a money market account, or, buy an indexed fund of some sort.
FearlessFreep
Senior Master
Weird...second time this year I've agreed with something Michael said.
michaeledward
Grandmaster
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TallAdam85, allow me to say a bit more on this subject.
So, let's assume you're a young man with a bit of extra disposable cash each week, not much, but a bit. I am not a financial planner; just a guy who has made a bunch of money mistakes; some more than once. And I listen to a lot of people who are supposed to be smarter than me.
First recommendation I would make, is please, pay off any credit cards you have every month in full. It is so easy to get yourself buried in credit card debt and so difficult to get out from under it. I promise, you will sleep better at night not carrying this burden.
If you have credit card debt that you are carrying. Please set a plan to pay them off now. Start with the smallest outstanding balance and pay everything you can on it (while still paying minimums on the others) until the balance is zero. Then cancel the account.
After you are credit card debt free, look to build an emergency reserve for unexpected events. This should be a minimum of three months living expenses. Have this reserve in 'liquid' account; a money market or savings account. Please do not have it in certificates of deposit, or any other instrument that has a holding perior which might prevent access to it in an instant. This emergency reserve is should be for emergencies; you got laid off, but you still need to pay rent. Your car needs a major repair. Your house needs to have a new roof.
After you have no credit card debt, and you have a cash emergency reserve, then you should be looking toward your own well being in the future. If your employer has a defined contribution plan (401k), contribute to the point equalling your employers match at a minimum. I usually see an employer match of up to half of your contribution, up to 5 or 6 percent of your annual income. DO IT! This is the second best thing you can do to your future financial security. (The first being paying off your credit cards).
Once you reach the employer match ... look at planning to put $4,000.00 per year into a ROTH IRA. Although, honestly, this is a difficult suggestion without knowing more specifics about your financial life. ROTH contributions are made with 'after tax dollars', but grow and are distrubuted tax free. With a long time horizon, this combination is exceedingly powerful.
As you are half my age, you have distinct advantage in your person financial life ... you have a much better shot of getting rich than I. Just remember, you get rich slow; with disciplined investing and time.
OK ... so now, you have no credit card debt: you have an emergency cash reserve: you are contributing to your 401(k) / 403(b): and you are maxxing out your ROTH IRA. At this point, I would suggest you put any more 'play money' into your 401(k) until you are contributing a total of 15% of your annual income to that vehicle.
Then, and only then, would I suggest you look to buy an individual stock - for either fun or profit. When purchasing an individual security, you should have an entrance plan and an exit plan. What triggers the purchase? At what price (above or below the original purchase) do you sell? You need to be able to read the financial documents and understand what they are saying ~ this is often damn near impossible ~ it certainly is complicated. Then, when you do start to play ~ realize you can lose everything. Just as sure as when you sit at a blackjack table in Las Vegas. Watching your money disappear is not fun; day after day watching the price tumble. Ouch!
My daughter started buying HOTT - Hot Topic stock, as a game and learning experience - in 2004. In January 2004, the stock was selling at more than $30.00 per share. Today, it is slightly lower than $11.00 per share. When half of her original investment had disappeared (Jan '06), she doubled down: doubling her investment to bring the average share price down on hopes of a rebound. Today, she is down at least 30% of her investment. And every time we look, it hurts.
Your best bet, if you choose to invest with disposable cash, is to purchase money market funds which distribute your investment across many securities. This reduces your personal risk.
Good Luck.
Get Rich Slow.
/lecture off/
So, let's assume you're a young man with a bit of extra disposable cash each week, not much, but a bit. I am not a financial planner; just a guy who has made a bunch of money mistakes; some more than once. And I listen to a lot of people who are supposed to be smarter than me.
First recommendation I would make, is please, pay off any credit cards you have every month in full. It is so easy to get yourself buried in credit card debt and so difficult to get out from under it. I promise, you will sleep better at night not carrying this burden.
If you have credit card debt that you are carrying. Please set a plan to pay them off now. Start with the smallest outstanding balance and pay everything you can on it (while still paying minimums on the others) until the balance is zero. Then cancel the account.
After you are credit card debt free, look to build an emergency reserve for unexpected events. This should be a minimum of three months living expenses. Have this reserve in 'liquid' account; a money market or savings account. Please do not have it in certificates of deposit, or any other instrument that has a holding perior which might prevent access to it in an instant. This emergency reserve is should be for emergencies; you got laid off, but you still need to pay rent. Your car needs a major repair. Your house needs to have a new roof.
After you have no credit card debt, and you have a cash emergency reserve, then you should be looking toward your own well being in the future. If your employer has a defined contribution plan (401k), contribute to the point equalling your employers match at a minimum. I usually see an employer match of up to half of your contribution, up to 5 or 6 percent of your annual income. DO IT! This is the second best thing you can do to your future financial security. (The first being paying off your credit cards).
Once you reach the employer match ... look at planning to put $4,000.00 per year into a ROTH IRA. Although, honestly, this is a difficult suggestion without knowing more specifics about your financial life. ROTH contributions are made with 'after tax dollars', but grow and are distrubuted tax free. With a long time horizon, this combination is exceedingly powerful.
As you are half my age, you have distinct advantage in your person financial life ... you have a much better shot of getting rich than I. Just remember, you get rich slow; with disciplined investing and time.
OK ... so now, you have no credit card debt: you have an emergency cash reserve: you are contributing to your 401(k) / 403(b): and you are maxxing out your ROTH IRA. At this point, I would suggest you put any more 'play money' into your 401(k) until you are contributing a total of 15% of your annual income to that vehicle.
Then, and only then, would I suggest you look to buy an individual stock - for either fun or profit. When purchasing an individual security, you should have an entrance plan and an exit plan. What triggers the purchase? At what price (above or below the original purchase) do you sell? You need to be able to read the financial documents and understand what they are saying ~ this is often damn near impossible ~ it certainly is complicated. Then, when you do start to play ~ realize you can lose everything. Just as sure as when you sit at a blackjack table in Las Vegas. Watching your money disappear is not fun; day after day watching the price tumble. Ouch!
My daughter started buying HOTT - Hot Topic stock, as a game and learning experience - in 2004. In January 2004, the stock was selling at more than $30.00 per share. Today, it is slightly lower than $11.00 per share. When half of her original investment had disappeared (Jan '06), she doubled down: doubling her investment to bring the average share price down on hopes of a rebound. Today, she is down at least 30% of her investment. And every time we look, it hurts.
Your best bet, if you choose to invest with disposable cash, is to purchase money market funds which distribute your investment across many securities. This reduces your personal risk.
Good Luck.
Get Rich Slow.
/lecture off/
Please don't 'play' stocks based on this sort of info. I ASSURE you there are thousands of higly motivated and compensated people who are spending 60+ hours a week with large amounts of technology doing this better than you ever could at home.
If you make this trade you're simply putting money in their pocket.
However, they don't mind that so much......
If you make this trade you're simply putting money in their pocket.
However, they don't mind that so much......
Though I don't 100% agree with everything Michael said, he is right on the money with most of it. Most importantly don't just invest in a company cause you like it, however do use the fact that you like a company as innitiative to find out more. If you really want to invest in XM or Sirius, use your liking of the company to do a lot more research into their financials and what the expected merger will bring. Also recognize that just cause they said they will merge, doesn't mean then definitelly will, a lot of things have to happen between now and then, not the least of which is getting anti-trust approval. Sirius's stock has actually fallen about 10% I think since the merger was announced.
You are young and so that means you do I have time to make mistakes, but don't invest anything you can't afford to loose. Investing in individual companies takes a lot of time and research. However I do have to disagree with Michael's advice to invest in a money market, the returns on those tend to be pathetic at best and 1/2 the time you could do better with a high interest savings account. You would be better served if you want to invest finding a mutual fund that meets your needs. You have plenty of time to ride the ups and downs of it. Make sure you know what you want from your investment (i.e. growth, income etc) and use that as a starting point.
Also keep in mind that a ROTH IRA money can't be withdrawn until 59 1/2 I think, so make sure you have other money available if needed for emergencies.
You are young and so that means you do I have time to make mistakes, but don't invest anything you can't afford to loose. Investing in individual companies takes a lot of time and research. However I do have to disagree with Michael's advice to invest in a money market, the returns on those tend to be pathetic at best and 1/2 the time you could do better with a high interest savings account. You would be better served if you want to invest finding a mutual fund that meets your needs. You have plenty of time to ride the ups and downs of it. Make sure you know what you want from your investment (i.e. growth, income etc) and use that as a starting point.
Also keep in mind that a ROTH IRA money can't be withdrawn until 59 1/2 I think, so make sure you have other money available if needed for emergencies.
Flying Crane
Sr. Grandmaster
Another good investment right now is CDs. They are very safe, and right now you can get them with a rate of return over 5%, even for short term like 3 or 6 months. You can probably buy them thru any bank or investment firm. The only drawback is that you can't access the money for other things until the CD matures at the end of its term, or else you will pay a penalty.
I just dont trust the investment market right now, I've gotten burned a few times, not a lot of money thankfully, but it is still frustrating. I've pulled out of just about everything except CDs.
Just my two cents worth (no pun intended...)
I just dont trust the investment market right now, I've gotten burned a few times, not a lot of money thankfully, but it is still frustrating. I've pulled out of just about everything except CDs.
Just my two cents worth (no pun intended...)
michaeledward
Grandmaster
- Joined
- Mar 1, 2003
- Messages
- 6,063
- Reaction score
- 82
emphasis added
Ping898 is correct.
This last paragraph in my post should not say money market, it should say mutual fund. My bad.
Earlier in my post, I mentioned a money market or savings account for your emergency reserve. That reserve should be immediately available. So, I think those accounts are best. You trade off return for liquidity.
Just in case anyone thought that the advice given up to now has been a little silly.....
I looked up the symbol for sirrius and found it was SIRI and traded on the Nasdaq.
Here is a basic look at the stock with links to other areas.
http://finance.yahoo.com/q?s=SIRI
The stock closed on 3-20-07 at 3.31 a share. About a year ago, it was selling for over 5.50. And it used to sell for 66.50 before the dot-com crash. If you click on the charts you will see a long term trend in the stock going down for the last year. You can find the reason why by clicking on the income statement (lower left corner) and seeing that not only is the company loosing money, but the rate that it has been loosing money has increased over the last three years. The company lost a billion dollars last year. Not one of the anylists think that the company will earn money this year or next. And if you read the news, not only may the buyers back out of the merger, but congress might not let it go through.
Unless you really know how to read these types of things (and know why that negative number for EPS is a big red warning sign, etc) you really should not deal with individual stocks. This goes double for things you think might go up based on a product or a rumor. There have been many great products ruined by moronic company leadership.
I looked up the symbol for sirrius and found it was SIRI and traded on the Nasdaq.
Here is a basic look at the stock with links to other areas.
http://finance.yahoo.com/q?s=SIRI
The stock closed on 3-20-07 at 3.31 a share. About a year ago, it was selling for over 5.50. And it used to sell for 66.50 before the dot-com crash. If you click on the charts you will see a long term trend in the stock going down for the last year. You can find the reason why by clicking on the income statement (lower left corner) and seeing that not only is the company loosing money, but the rate that it has been loosing money has increased over the last three years. The company lost a billion dollars last year. Not one of the anylists think that the company will earn money this year or next. And if you read the news, not only may the buyers back out of the merger, but congress might not let it go through.
Unless you really know how to read these types of things (and know why that negative number for EPS is a big red warning sign, etc) you really should not deal with individual stocks. This goes double for things you think might go up based on a product or a rumor. There have been many great products ruined by moronic company leadership.
Most definitely! Michael's advice is very good!
