Strategies for buying stocks

How do you decide what stock to buy?

What do you look at?

What tools are at hand to help you see a stocks trends over the past months or even years?

I do not have a broker, and don't want one. Is this a rookie mistake?

What is the best way to buy stocks on your own without a broker? E trade, Scott Trade or what?

Is this limited to STOCKS or do you also want to include BONDS and COMMODITIES too?

FWIW, I use VANGUARD and YAHOO! FINANCE for my investing. My trades and accounts are done within a Vanguard account, but I use YAHOO! FINANCE for a lot of tracking and research. I'm well under 50% stocks, with the rest split between cash reserves, bonds and commodities, all traded through my VANGUARD account. Some in mutual funds, some in ETFs, etc.

Great question Doc!!!

My guess is that is the #1 question on non-investors minds .

Working with a good broker within a good company is always a good start at the beginning . If they are any good at what they do they will start you out slowly investing in the market and then build on a trusting lasting business relationship .
Their responibility to me goes way beyond buying a stock through their company . I want and get monthly reports , projections, retirement savings projections , and tax saving advice, etc.

But there are other ways to learn without paying a broker through commissions . Many Colleges now have excellent night MINI classes that you can take to learn about investing and the ins and outs of the Stock Exchange . Many have brokers come in and teach the classes . You would be amazed at how many in the group are retired folks or over 40 just trying to stretch their dollar.There are no College class credits and it is usally a 4-6 week course .

Another way to start is to get your kids involved too . Set up a small account at a brokage firm for your kids . You can make small deposits monthly (say $25 -$50 bucks) and then get then involved in investing that into stocks . You will be amazed to see them heading to the computer to track the progress of their investments . You should have heard my son at the age of 7 ,LOL . He sounded like a finacial expert !
It can lead to a very Money responible young adult who is light years ahead of most kids his age !

Computers have made it so easy to learn about a certain stock . For example : Put in a company name in the stock lookup bar in Yahoo . That company should come up and give you a ton of information . you can check growth charts , look at analyst projections , highs and lows for the year, a summary of what they do .dividend reports,or even join in on company discussion boards and so on .
As far as buying on line and who to use or who is best , I will need some input from other members on that , as that is a area I have not ventured into .

Also, watch and read these sources (among many others):
The Street.Com
Seeking Alpha.com
Market Watch.com
Watch Cramer's Mad Money, read his books too. He's sort of a nut job but is a good teacher.
Also watch THE CLOSING BELL and perhaps either THE KUDLOW REPORT or NIEL CAVUTO.

B_Skurka said:

Is this limited to STOCKS or do you also want to include BONDS and COMMODITIES too?

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No, I see no reason to limit our discussion to only Stocks. Al picked a good name for this forum which encompasses stocks, bonds and commodities.

My knowledge of bonds is thinking they are a safer investment with a lower rate of return.
My knowledge of commodities is zero. That market seems crazy to me. I hope to learn about it from those who participate in this forum.
It should be interesting for sure.

Al, what a great idea to start your son out so young with an account and let him see the power and potential of saving money and investing.

B_Skurka said:

FWIW, I use VANGUARD and YAHOO! FINANCE for my investing. My trades and accounts are done within a Vanguard account, but I use YAHOO! FINANCE for a lot of tracking and research. I'm ... all traded through my VANGUARD account.

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What Bob said.

Vanguard and Fidelity are by far the best choices for an all-services broker, assuming you trust your own judgment more than you trust some commission-based broker. (If that broker was any good he would have retired by now!)

I chose Fidelity only because they have 24 hour live phone service as good as their day crew and I couldn't make investment calls from work, back before I retired. Vanguard has a slimmer operation and slightly lower fees which translates to an advantage over time. Both are top-line excellent. I don't know of another full service broker that I would recommend. After helping my wife close out her father's accounts I know some widely known brokerage houses who I'm glad I avoided.

B_Skurka said:

Also, watch and read these sources (among many others):
The Street.Com
Seeking Alpha.com
Market Watch.com
Watch Cramer's Mad Money, read his books too. He's sort of a nut job but is a good teacher.
Also watch THE CLOSING BELL and perhaps either THE KUDLOW REPORT or NIEL CAVUTO.

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Again, agreed. Read widely. (Not just Bob's list unless you want to sound like Bob. ) Stuff you agree with, and stuff you think is wrong just to make sure it is safe to bet against it. The whole point here is that you need to work in an environment you understand. As I have said in another context, the definition of an expert is he not only has heard all sides of some issue, he can tell you why somebody's opinion is wrong. Investing without knowlege is pure gambling - and the deck is stacked against that kind of investor.

BigAl said:

But there are other ways to learn without paying a broker through commissions . Many Colleges now have excellent night MINI classes that you can take to learn about investing and the ins and outs of the Stock Exchange . Many have brokers come in and teach the classes . You would be amazed at how many in the group are retired folks or over 40 just trying to stretch their dollar.There are no College class credits and it is usally a 4-6 week course .

Click to expand...

I recommend this too. After I had accumulated small savings (I started from zero) I haunted a used-book store and bought many of the classics on investment strategy. Next I enrolled in a noncredit JC night course taught by a broker, to have some place to discuss all the theories I had read. I learned a lot. Strongly recommended.

Know the customers of the company, and what their competitors are up to. How do either make money? Where is their profit and expenses generated? What bare they doing to expand that. How much of their gross to interest expense? How much $ going to R&D? Patents? How much of their energy is wasted on non-value added endeavors, ie - law suits, govt crap, special interest group attacks, etc. What is their capital plan? What is the velocity of sales? Subscribe to same-industry enewsletters and stay on top of the news. Learn the business you want to buy a company in. Be aware.