What to do with the money – square 1

Starting out, there is this relatively small amount of money that I want to invest in the stock market. So what do I do? How do I go about it? Which stocks do I pick? Do I pick stocks or bonds, or ETFs (what are those?), or mutual funds.

One thing at a time…

For discussion sake, we’ll be using the fictitious amount of $1000 USD for our handy portfolio; easy to work with, easy math, a fairly good amount to start with.

Scouring the Internet for ideas and starting pointers, I discover I need a strategy. Well, what is that? And why do I need that? I know that I want to make as much money as possible from the initial investment I have. I also know that I would like to try my hand at this myself and not just hand it over to someone else to manage for me.

OK, so I need an investment account. I have heard about the big names out there, Fidelity, Schwab, TDAmerica, etc. Looking them up, I don’t get a warm and fuzzy about their individual investor accounts. I am a small fish and I really don’t want my money eaten up by minimum account fees or transaction fees. Plus, as I have a little bit of money, I would like to keep adding to my account ongoing, preferably automatically with low re-occurring fees.

Went to Costco. If you are a member there as well, you know they have a number of nifty value add services that can be found on the way out. One of them being a stock market account with ING Sharebuilder (now Capital One). Interesting, worth spending a couple minutes looking at.

Here is the scoop:

Sharebuilder seems to be geared toward the smaller scale investor like me. Come on, the name says it all. They offer an automatic investment plan at $4 a pop, nice! No other fees. And I can choose between a Roth, a traditional IRA and a regular investment account. Plus, I can link my financial institution to it for no cost automatic fund transfers. Starting to like what I am seeing.

If I sign up and mention in the signup process that I am a Costco member, I get an extra little bonus: depending on my membership status, up to $60 (at least at the time of my sign up).

So, I haven’t spent a dime yet and my initial $1000 has already grown between 4% and 6%. Looks like a really good start.

Now that I have an investment account, linked to my bank account to wire my initial seed money and any subsequent contributions at my own pace at no cost, a welcome bonus, all combined with easy yet secure online access, I can divert my attention to the finer things of investing – still need that strategy.

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Stock Opinions – The first

Part of being a responsible and engaged participant in this world, is to be informed about various things of daily life. One of those being the rather large and obscure topic of “Investments”.

While I do participate in a 401(k), which by the way is a super nifty invention, in case you haven’t bothered yet, I also read up and dabble in the stock market. The overall goal being to supplement and bolster any (projected) retirement income.

Sounds great, doesn’t it? Almost as if it was taken straight out of a financial advisor’s marketing brochure.

Well, I try. I am definitely not a day trader, yet, over the last 10 years or so, I was able to learn quite a bit about markets, trends and their effects on stock prices. I even own some! I even subscribe to one or two financial magazines; yet more on that later.

I think investing in the stock market is something everyone can and should do. A broker or some other intermediary between you and the market is not really necessary if you only bring to the table the smallest amount of interest yourself. Alternatively, you can always lean back and fork over all that hard earned cash to someone and let him or her make all those decisions for you. If you choose that route, which is entirely your call, at least be sure to understand what the annual statement contains and don’t be surprised if the invested monies tank.

Enough of that. Here we go…. buckle up and enjoy the ride. Oh, and don’t forget to comment, too.

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