101 Commission-free ETF Trading From Ameritrade

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Lessons I Learnt About Investing

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Investing is not trading and I understood that after a couple of mistakes. Investing is basically buying a business and in this case buying a part of business. Investing is definitely not gambling but trading is. In the long-term, one can make lot of money through trading (gambling) but will eventually lose most or all of it. The right way of investing is to pick and choose a right stock that has a future and demand for its products and then invest some money on it. Like any personal business, it takes time to grow and so have some patience. Too many clicks of your mouse to buy and sell take away the advantage of growth. It is very important to buy good stocks not cheap stocks (because the price is low). Once you buy a stock, keep it for a long time and have a goal for that stock. Say, you want to sell a stock after it doubles and that is when you sell that stock and make some profit. Remember emotion is the enemy and time is your friend. Too many trades ruin the game and it becomes a speculative game rather than growth game. If your stock falls below certain level, sell it to avoid complete loss (say your stock is going bankrupt). In general, it always pays to wait and wait until you get what you want. As warren buffet said, never lose money and it is true. Do a lot of research about the business you are interested in and once you buy, stick with it no matter what TV reports or Internet reports or friends say? Nobody knows what will happen tomorrow and I mean nobody; even Warren Buffett. So always do your research and go on with your gut feeling. Set some filters in choosing a stock and if the stocks you are interested in pass through them then you buy. Up’s and Down's are common and so understand and accept the trend. There are more lessons to be learned and i will write in coming times.

Learn to Invest Through This Website

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I have given a small list of websites to refer to in the past and this is a new addition to that list. Click Here

Learn and Earn Through Investing

In my earlier post, I mentioned about following kiplinger.com, Google Finance and other sources that are good for learning about investing. I was looking to find ways to get these resources for free. After a bit of research I was able to find some places where we can get these for free. First and foremost, I would check with libraries, if not older issues at least it is a good source of latest issues of Kiplinger and other investing magazines.

          There is a good possibility of finding older versions from the library archives. In addition to this, it is a good idea to search craigslist.com and ebay.com. The best and the easiest way to access Kiplinger issues is through Google Books. Many older issues and even latest issues can be found which I find very useful. There are many other sources that can be explored like going to a book sale or yard sale or just by placing an ad on craiglist.com or freecycle.org. If you really want to learn about investing there are many ways to do it and this is just one of many.

Investing tips for a beginner

1. Start reading financial sites like investopedia.com, kiplinger, and Google finance.
2. Make a portfolio of some good companies you find on above sites using Google finance 
3. Follow the trend of these companies for a while to understand how they progress
4. Choose an online brokerage based on your requirement (if you are just small time investor and all you do is buy stocks then brokerages like sogotrade.com, just2trade.com are your options)
5. Choose stocks that are low priced and have a promising future.
6. Take personal responsibility towards gain or loss and for your choices
7. Read about people like Warren Buffett and their advices

Letters of great significance

Below is the link to the letters written by Mr.Warren Buffett to his stock holders. He usually writes a letter every year and i think its is fascinating to read them from 1977 until 2010 (present). Market has gone through ups and downs since 1977 but Mr.Buffett had mostly Ups than Downs, so it is worth reading to know how he responded to the bear times and bull times.


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Some wisdom from Mr. Warren Buffett

• Stay Liquid: We will never become dependent on the kindness of strangers
• Buy when everyone else is selling
• Don’t buy when everyone is buying
• Value, Value, and Value : You are investing in a business (it has to do well, only good ones do)
• Don’t go by attractive products of the companies
• Don’t get suckered by big growth stories. (Avoid businesses whose futures we can’t evaluate, no matter how exciting their products may be)
• Understand what you own
• Defense beats offense
•  A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when  others are fearful – WF
• World will not find you deals. You have to find the best deals/bargains-WF

Interesting fact: Warren Buffett bought Gillette shares because he knows that men never stop shaving.

Other good sayings:

Wealthy people do what others don’t –Yogesh Chabria

My Investing experiences with online brokerages

After the stock market crash in February-March, 2009; I thought I should start investing in stocks. People told me that it is a good time to start investing and this will be a rare opportunity (once in every ten years or may be more). I had no idea about how stocks work and how to invest. With the help of my colleagues and others I was able to open a brokerage account with TDameritrade. My colleagues were very experienced and their invest range is in thousands. My investment capabilities were limited (In hundreds) and in addition to that I was new. After I opened my account, I studied about stocks from many sources like Google finance, smartmoney, Kiplinger, yahoo finance, Kiplinger old editions on Google reader, YouTube and others.

                          By the time I got an idea it was November, but the stocks were on the rise and it was time of thanks giving followed by December (Christmas). It was good time for businesses and so I started my first investment with starbucks. I had little idea on how to choose my stocks but had strong belief that this company will do well in long run. Ameritrade was good but not for beginners and for people who invest very less. They charge 9.99 for each trade; it’s a lot for small investors like me. I switched my brokerage account to sogotrade, which charges 3$ flat for every trade. The only problem I had with this brokerage was the stock prices are delayed by 20 minutes or so or may be less than that. Anyways, I check real time prices on Google finance before I buy on sogo. I found just2trade.com for 2.50$ per trade but I did not find their website very clear.

                         Very recently I opened an account with share trader, which charges 4$ per trade. It is a nice brokerage for people who want to invest on a biweekly or monthly basis. They have plans like basic, standard and so on. If you open an IRA account they are giving free credits to invest for a year (check restrictions). From time to time they give out promotional codes for free credits to invest (no brokerage fee). I use referral programs from these brokerages to get some money or free trades. For example, Ameritrade gives 50$ or 5 free trades for every referral, sogotrade gives 25 and sharebuilder gives 10 per referral.

                         If you have a really good credit history (say 740 or more), I would say apply for a Schwab visa card (the one with 2% unlimited cashback on everything you buy).  The cashback is directly deposited into the brokerage account which can be used to invest in the stocks/funds. I use this card alone for all my purchases to get the benefit. In my opinion, one should always choose a brokerage account based on their requirement. If you keep asking others or search Google, there will be multiple opinions about all the brokerages. Do your research and make a choice. Good luck..

Sharebuilder- 5 Free Real Time Trade credits

If you don't have an account, create one with promotional code FOOL50 or BUYSTOCK to get 50$ after you deposit 50$. Once You have an account you can use below code to get 5 Free trades.

Steps on how to claim your 5 free real time trades

1. Sign in to your Sharebuilder.com account
2. Click on Accounts Overview tab - Promotions
3. Enter Promo code - HVC09NY