Advice On First Stock Investments

[MJ]

I'm looking to start filtering some money into the markets for "long term" wealth building aka retirement money.

I'm pretty comfortable what I'm doing outside of stocks, but within stocks I'm a complete noob. I believe what I'm looking to invest in is non volatile stocks that have a track record of paying dividends, is there any good screeners out there you guys know of to find a stock based on divided history?

Seems to me (and I could/probably am wrong) that I'd rather put my money in stocks that actually earn an income, and let it "Drip". Otherwise I'd rather keep putting my money into websites and real estate which have a higher rate of return.

[jdwanchalk]

Real estate? Higher return? That's one of the biggest myths running. Only way you find significant returns there is if you buy on some great downslide and unload at just the right time.

Housing returned 0.4% per year from from 1890 to 2004. And that does not take taxes, maintenance, etc. into account, which would put you into the red.

[MJ]

You are wrong in a lot of ways about that, it's not hard even in the current market to buy property with positive cash flow. Money is making money in this market, big time - people that are cash rich are having a field day.

Would rather talk about stocks though as I have no doubts in my thoughts about owning land.

[jdwanchalk]

You are wrong in a lot of ways about that, it's not hard even in the current market to buy property with positive cash flow. Money is making money in this market, big time - people that are cash rich are having a field day.

Would rather talk about stocks though as I have no doubts in my thoughts about owning land.

Housing returned 0.4% per year from from 1890 to 2004.

Not seeing where that is debatable. I am not arguing the fact that you *can* make money with it, but instead that you could also lose a lot or, most importantly, will likely make very little. So many people think that buying and selling property is a ticket to wealth, but I would be willing to bet that more have gone broke attempting this than have greatly succeeded. The inherent risk vs. the often times minimal rewards just make no sense.

Stocks (as a whole, anyway) offer a lot more, especially in relation to potential gains and losses.

I am certainly not a property expert, but I know that it would be one of the worst ways to invest any money, especially given the other options.

[themike537]

I am no investment expert, but fwiw I've been buying mostly index funds tracking the dow and s&p 500. I've read a few investing books that advocate this approach, and it makes sense to me as im investing for the long term. Also, I have this set up as automatic monthly purchases so I don't have to think about it.

If you are intent on doing individual stocks, I would probably stick to major, proven companies, and pick up some leaders in each sector (for a buy and hold approach).

^To be taken with a grain of salt.

[Hazo]

Didn't edit JD's post - clicked wrong button (again).

[jdwanchalk]

Didn't edit JD's post - clicked wrong button (again).

lol why is it always mine haha.

[leporello]

TheMike's advice is sound. If you're looking at long term buys, then you should stick to the biggest blue chips where stock prices will be non volatile.

[Jeremy]

Personally, in the current environment I am a bit scared of stocks at the 12,000 Dow level......I just can't see it going that much higher given the lunacy going on in the world.

If you can get Real Estate for a bargain, that is always good. Or commodity index stocks in oil or metals would be good as well. The best investment in my opinion is anything you can physically see or hold. The actual paper "stock market" is so corrupt and manipulated now by company's like Goldman Sachs and other big trading houses that it makes it a joke for regular people to invest in it with any amount of confidence or trust.

The U.S. stock market and the FTSE are only 1 major terrorist or geo-political event away from tanking in the course of a week. I'd rather not be holding the bag if/when it does happen.

[makeitso]

I think a well diversified portfolio is the biggest thing. You can have some real estate, some commodities like gold and silver, and some bonds, but you should definitely have some stocks. The advice about big blue chips is very good. Stick with companies you know and use every day, companies that you like. You can also buy ETF's which are a group of stocks but different than a mutual fund, although MF's are a good option too (just watch expenses). That way you are getting diversity without having to do it yourself.

About the Dow at 12k, that's a good point. If I had a significant amount of money I would not invest it all right now in the stock market. But I would start investing some. Then if, god forbid, something bad happens and the market tanks, then I would start investing a lot more. Every time the stock market drops significantly people (media mostly) say maybe this is the end of the stock market, capitalism, etc, but it has always come back. Sometimes slower than others. However, the smart, brave people that were buying stocks when the rest of the world was selling in recent years have made millions.

Anyway, some of my favorite quotes from Warren Buffett (paraphrased):
"Be cautious when others are being greedy, but be greedy when others are being cautious."
"Buy stocks that, if the market closed for the next 5 years, you would still be happy to own when it reopened."