Learning the Investing ropes...

[Blue Leader]

In the last 6 months I have been doing a lot of reading on everything investing. I am kinda getting sick of weighing options and just want to buy something just to see what happens

I don't have tons of disposable income, but I have about 200 just sitting in a MMA from random ebay sales. I am funding an emergency fund and this 200 extra I would like to use to break into investing. (obviously smalllll scale). I have been watching a few stocks, but not sure if I should pull the trigger. What would you, the aged investor recommend to look at to get my investing feet wet?

Thanks for any imput!

Edit: I have opened a sharebuilder account for the $50 sign-up bonus. Woot!

[F16]

Where to put $200

1. Bank Passbook or Statement Savings Account
You may need $100 to open a typical bank account.

2. DRIP Stocks.
About 1,000 publicly traded companies allow investors to buy stock directly from the company.
Minimum investments are very affordable, often just $100.

3. U.S. EE Savings Bonds.
EE savings bonds can be purchased at banks.
They are purchased for one-half of their face value (e.g., $25 for a $50 bond) and come in denominations including $50, $75, $100, $200, $500 and $1000

[jIM_Ohio]

In the last 6 months I have been doing a lot of reading on everything investing. I am kinda getting sick of weighing options and just want to buy something just to see what happens

I don't have tons of disposable income, but I have about 200 just sitting in a MMA from random ebay sales. I am funding an emergency fund and this 200 extra I would like to use to break into investing. (obviously smalllll scale). I have been watching a few stocks, but not sure if I should pull the trigger. What would you, the aged investor recommend to look at to get my investing feet wet?

Thanks for any imput!

Edit: I have opened a sharebuilder account for the $50 sign-up bonus. Woot!

You are taking a big step. There are steps you may have overlooked or missed.

I have an account with sharebuilder. Sending $50 each month to it does not see it grow as much as the $50 I started sending to T Rowe Price for a mutual fund.

I might suggest you consider mutual fund investing before stock investing. If you do stock investing, my suggestion is to find around 15-20 stocks and send $50 or more each month to sharebuilder. Each month change the stock you purchase.

Here are some issues to consider:
1) if stocks pay a dividend, the math to figure out cost basis is quite tediuous
2) if you invest in same stock month after month, figuring out cost basis is quite tedious
3) selling stocks through sharebuilder is not cheap ($14 I think).

I only invest in my sharebuilder account one month per year. I send a large amount, and pay either $4 for one stock or $12 for the purchase of unlimited stocks.

[Blue Leader]

I already am funding a high yield online account and have about half of the ultimate EF goal met. So I don't really want to open another saving or extremely safe account. I have earmarked this small chunk to use exclusively for "investing" (basically stocks, etf, or mutual Fund).

Thanks for both of your suggestions. I did read, jim, someone recommending to just buy one stock at first and get the feel of it, before going and funding a slew of stocks. Do you agree with that?

Oh, and sharebuilder real time trades are now 9.95! woot! Thanks ING

[jIM_Ohio]

I already am funding a high yield online account and have about half of the ultimate EF goal met. So I don't really want to open another saving or extremely safe account. I have earmarked this small chunk to use exclusively for "investing" (basically stocks, etf, or mutual Fund).

Thanks for both of your suggestions. I did read, jim, someone recommending to just buy one stock at first and get the feel of it, before going and funding a slew of stocks. Do you agree with that?

Oh, and sharebuilder real time trades are now 9.95! woot! Thanks ING

Calculating cost basis might be a challenge for you. Sharebuilder does not calculate this for you unless you are on their premium plan.

[disneysteve]

Here are some issues to consider:
1) if stocks pay a dividend, the math to figure out cost basis is quite tediuous
2) if you invest in same stock month after month, figuring out cost basis is quite tedious

The same is true for mutual funds, though. I invest a set amount each month, sometimes getting more shares, sometimes less. Then there are dividends and capital gains that get reinvested. I've been in my oldest fund for over 15 years. When I sell shares someday, figuring the cost basis will be a mess. I don't even want to think about it.

We've sold shares of a fund once, when we bought our house, and that was hard enough, designating which shares I wanted sold to limit the tax basis. We also donated some shares of a fund a couple of years ago and had to do the same thing to maximize the value of the deduction.

[illinigamer]

I personally don't think investing such a small amount in stocks makes much sense. If you are paying $9.95 to make a trade of $200, that is an instantaneous loss of 5% of your money. If you plan to move between stocks that will trigger even more fees, not to mention taxes on any gains you had. I think it makes more sense to continue to save in a high yield account until you can make purchases that result in more reasonable transactions costs.

[Blue Leader]

illini, I agree. I have been toying with jumping in with $500. Also, with sharebuilder, I would do the mass Tuesday buy option, where the trade is only $4. That would be less than 1% loss.

[autoxer]

Do you have any goals for your investments? retirement? rainy day fund? or just for entertainment (like gambling)?

The goals dictate how much risk I take when choosing investments. My long term investments are in more risky stock mutual funds, because the ups and downs get smoothed out over long time periods (lessening the risk).

My short term investments are just a money market account, because I don't want the risk to affect my goal.

[Skooby]

Calculating cost basis might be a challenge for you. Sharebuilder does not calculate this for you unless you are on their premium plan.

Jim, what do you think about these cost basis calculators:

Arch Coal, Inc. | Cost-Basis Calculator

  Stock Basis Cost Scratchpad

Do you know of any better than these?

[Blue Leader]

Update:

I decided to buy some solar stock last Tuesday...right after they got pummeled. It has worked out well so far (up everyday. My goal for this was to jump in and learn with a little real money. I have learned quite a bit so far and am glad I decided to try it.

[jIM_Ohio]

Jim, what do you think about these cost basis calculators:

Arch Coal, Inc. | Cost-Basis Calculator

**Stock Basis Cost Scratchpad

Do you know of any better than these?

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Yes- ay for the premium service at sharebuilder, or pick a brokerage which calculates it for you.

[Skooby]

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Yes- ay for the premium service at sharebuilder, or pick a brokerage which calculates it for you.

I already have a sharebuilder account, although I have yet to buy any stock/etfs. I would like to stay with basic if I can.

What about these excel based calculators:

http://office.microsoft.com/en-us/templates/TC011839031033.aspx?pid=CT101441121033

http://office.microsoft.com/en-us/templates/TC010233521033.aspx?pid=CT101444811033

http://office.microsoft.com/en-us/templates/TC010744641033.aspx?pid=CT101444811033

It only takes a quick download, which one do you like best?