I am a middle scool student interested in investing in the stock market.?
I have about 200 dollars to invest, and I am interested in a decent return within three years. Does anyone have any advice on what kind of companies I should invest in for a diversified, successful portfolio? I am interested in putting maybe 50% in steady stocks, and the rest in medium risk companies (however i am always open to other suggestions). No Penny Stocks, and nothing excessively risky. (I already have a couple hundred dollars invested in General Electric). I have a pretty decent knowledge of the stock market and how it works for someone my age.
I would recommend you strongly to consider mutual funds. There is an incorrect belief that volatility=greater profits. It also means greater losses. Given the fact that we are at the end of a bull market and heading into a mini-bear market sometime at the end of 4q of 07 and 1st quarter of 08. I would tell you to save up until you have $300. Then go to an Edward Jones or AG Edwards branch (they tend to offer the best service with the typical 7% commission package for MF’s). Then open an account with Capital Management Family of Mutual Funds, also called American Funds. Look at the prospectuses of their growth and income and growth funds and pick one, such as REREX, CWGIX, CAFAX, CGFAX. Also look at foreign stock markets and determine whether they will continue to outperform US companies. If you determine that they do. Invest in a mutual fund that has overseas equities. Since you have $200(actually need $300), buying a stock would not be effective since the commission would make it insignificant. Mutual funds are most effective for an investor who invests periodically. I am recommending American Funds family with Edward Jones since they are partners. Edward Jones does not have a brokerage charge for American Funds. American Funds mutual funds also have the cheapest expense ratios(Vanguard has the cheapest of all MF’s). Once you accumulate more money and think you can play with stocks, look into using margin to increase wealth. However, it is risky. Sticking to Mutual Funds with a beta of .75 Successful Penny Stocks Investor
Successful Penny Stocks Investor