Seeking Advice on How to Buy Stocks

Updated on December 03, 2008
I.K. asks from Los Angeles, CA
4 answers

Hello All,

My husband and I are looking for an advice on how and where to buy a few stocks. With the economy not doing so great lately and stocks are dropping in value we think it's a good opportunity to try investing. Any advice will be greatly appreciated!

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answers from Los Angeles on

Check out she has lots of good advice! I pasted the following. Good luck!

Client Beware: How To Choose A Financial Advisor

(1) Any financial adviser who calls you cold-whom you don't know and have never heard of-should be sent packing. Hang up. A successful adviser doesn't have to look for clients. Clients seek her or him out.

(2) If an adviser has time to come to your home, something is probably radically wrong. When I was seeing clients—long before I wrote my first book—I didn't have time to breathe, let alone get in a car and drive for half an hour across town to a client's home and then drive back again.

(3) You should make it a point to visit a potential adviser's office, in any case. You'll want to pay careful attention to how he or she keeps his or her professional space. Is it neat? Are files in order? Is it busy?

(4) If you are married or have a life partner, a potential adviser should have found this fact out by asking and should see you only if you agree to bring your partner along or else have a very good reason why you prefer not to.

(5) A good financial adviser will ask you all—not some, but all—of the following questions: How is your health? (This is No. 1, in my opinion, since if you're not healthy you'll need first and foremost to plan for your medical care and possibly your income if and when you cannot work.) Are you in debt? (This is No. 2.) Are you responsible for aging parents? Do you have a will or trust? Will you inherit money someday? Do you need to make a major purchase like a new car or a new roof for your home? Do you have a retirement plan? Are you funding it to the maximum allowed by law? Do you have adequate insurance? Are you saving for your children's education? Only after an adviser fully understands your financial situation should he or she ask you how much money you have to invest.

(6) An adviser should be a Certified Financial Planner, or CFP® Professional, just as I am. That means that he or she cares enough about his or her clients to have gone through a two-year certification process, with continuing education requirements mandating that he or she stay up-to-date on the kinds of information that you need.

(7) You should be told up front how, and how much, a potential adviser will be paid. You shouldn't have to ask. The correct method of payment is by fee only. Any adviser who wants to be paid through commissions charged on the investments he or she makes for you has an incentive to move you in and out of stocks and other investments, perhaps in direct opposition to what's best for you.

(8) An adviser should never ask you to write a check to him or her. You should write checks only to a brokerage, an insurance company, or another financial services firm.

(9) If you already have an adviser, that adviser should be calling you in down markets as well as in up markets. Has your adviser called you in the past 12 months?

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answers from Los Angeles on

Well it sounds as if you are not to knowledgable on this issue, so I would suggest to not buy them on your own unless you really know what you are doing. Go to someone who can help you and is well versed in this area. You do not want to worry about buying and selling all the time in this market, that is a full time job which many people do, but the know what they are doing, and it is their personal job.
Go to someone who can do this for you. You can still pick the stocks you want but at least you can get good information instead of just hoping what you pick is right and you wont lose it all. If your husband and yourself want to do it on your own you can start by playing around with fake money, and see where your investment choices would have taken you. Many online stock places offer this service so you can get the hang of it before really putting your money in.
Also think long-term 10 - 20 years because we are at a low now, it will go back up, now is the time to buy if you do have extra disposable income. Good luck and I hope you make some money!!



answers from Los Angeles on

Unless you are a multi-millionaire with millions in cold hard cash and have been tracking a few specific stocks for years, I suggest you stay away from individual stocks. Buying individual stocks is a high finance game best left to wall street stock brokers who have the educational background and years of experience with a brokerage firm. What you most likely need is to invest in some sort of mutual funds. step 1. max out your 401k investment -- you should be able to select from various mutual funds based on how aggressive you want to be. if you need help picking the mutual funds, you and/or your husband should be able to talk to a financial advisor provided by the 401k plan's investment firm your company uses. some company has a 'benefits representative' you can talk to. step 2. wherever you're banking, walk in to the bank and ask them to recommend a financial advisor you can talk to regarding the cold hard cash you have in the bank after maxing out your 401k input.
last but not least, do NOT buy a stock based on stock tips you get off the internet.
good luck!



answers from Honolulu on

If you are already knowledgeable about investing and stocks and the terminology and all the details, then you can utilize a self-serve type of firm like Charles Schwab. (I'm not promoting anything here, just an example).

BUT, it you are not knowledgeable about investing, you NEED to get a Financial Advisor... either a "CFP" (certified financial planner), or go through a full-service firm like Smith Barney for example, or there are many others.

The thing is, you MUST be fully aware of and have knowledge in investing... or it will be a mistake and you will probably not make good choices or loose money, or some greedy Financial planner can take advantage too and sell you things you really don't "need" or want.

You also have to be aware of transaction "fees." Everytime you buy or sell shares of stock, there is a fee incurred.

This is not something you do willy-nilly or just as an experiment... because since hard-earned money is involved... there is always the risk of losing some. You ALSO have to know what your long-term goals are, for the money... and whether it will be a long-term "hold" investment, or whether you want it for short-term and want something more "liquid" or whether it will be for "retirement" purposes... and if so, then what kind of retirement vehicle are you wanting??? ie: an IRA, or a ROTH?

You BEST get a Financial Advisor... and also be aware of their fees as well. No service is "free" after all. And as always, be aware of any "risks" with investing... understanding fully that the market goes up or down and thus, your savings as well... and what your money goals are and what not.

There are SOOOOO many details to keep in mind with investing.... and it takes time to learn & research...

Good luck,

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