Here is my advice before investing anything in the stock market.
1. Have clear and defined goals both broad based (long term) and specific ( short term for individual investments). Do you want rapid growth, capital preservation, or long term growth?
2. Be honest with yourself and know your tolerance for risk. Is it ok with you to lose some money or even all of an investment?You might be surprised where you really stand on this. If the money you put aside isn't disposable or if you will need it in the next year or two then don't invest.
3. Diversify. It is easy in LA to invest in a single sector like stocks affiliated with oil and gas but then if the sector goes down you lose a chunk.
4. Invest in high quality dividend paying stocks if you want the best hedge against risk.
5. Have less than 20% in speculative stocks. Very few stocks make it big.
6. Be realistic and not greedy. A 30% return and cash out is better than a loss. Have defined entry points into a stock and defined exit points. Knowing when to sell is better many times than knowing when to buy.
7. I suggest using an online brokerage firm. I use Scottrade. Brokers make their living from commissions made from buying and selling stocks. High commissions and fees mean less money for you especially if you trade frequently.
Just some suggestions.
Robbie aka Big Hutch
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