Higgs writes to Boson and Astatine
Dear Boson and Astatine,
I am very interested in your both of your opinions. I assume he will have differing ideas, but ultimately will probably give the same suggestions as I would have derived on my own.
b.) Have either of you researched which is the best of these two online stock brokerage firms – Etrade vs ScotsTrade? My preference is long term trading. Etrade looks the best for long term trading and the minimum deposit is only $500. ScotTrade also looks good, but I don’t specifically know why.
The big named firms have better analysis on different stocks, but would I read all of that information? The cheaper firms would save me money. There are ups and downs to all of them. Astatine has done more research than I and so his perspective should have the most relevance. As long as you know what you are getting, most online stock brokerage firms are decent.
Boson, you and I have talked about stocks before and we both know where we stand. I’d like to start investing just a little – almost an insignificant amount – a few times a month. I have to start somewhere and get my feet wet with small investments. You do indeed have to start somewhere, preferably after you have a comfortable emergency fund and savings account. Also, if you invest an insignificant amount you are going to need gains just to cover the expense of investing. Astatine will say you have to buy at least $500 worth of a stock to make it worth the investment – right? Otherwise fees cut into any potential profit.
This email chain can be used to give advice to each other on stocks or trends we’re reading about. There are so many books on stocks. I would say most only contain frivolous information that is mostly philosophical and subjective. It’s also true that I’ve never read a beginner’s guide to stocks. The only issue with reading an intro-book like that is how little it would have for me that is “new information”. What would be in there that I don’t already know from having read multiple websites?
It still begs the question: How ignorant are the three of us with regards to investing?
Do we read Forbes, or Money magazine to stay up to date on where our ‘investment whims’ should take us? The more important thing is to understand the bigger picture. If you don’t understand how stocks, bonds, interest rates and world economies play into the price of a share of Yahoo (or whatever stock in question) then you can’t make an informed decision. Furthermore, I would be better off upgrading my skills and getting a new job. In 2 years I could be making more.
So I am going to commit $100 a month to investing. I can play around with money and look at my percentages and the three of us can offer input and analysis. While I’m only spending $100 per month, I’m learning the environment of stock investing. Look at it this way; If I don’t invest at all, then I’m not learning anything. My $100 per month is my ‘fee’ to learn about stocks. It’s like a college crash course and the $100 is my tuition. The two of you are going to be the friends in class who over look my work and say “why the heck did you do that?” or “Wow, nice job. Imagine if you’d purchased 100 shares instead of 5!”