Volatile Markets - Part 1

I used to watch CNBC in awe, hoping that one day I could sit back and kick up my feet while a stock market correspondent gushed over an investment direction that I took advantage of. However, I didn't understand what they said 80% of the time. My next move was to get a savvy financial advisor to help me make those decisions, so I called up my local top investment bank (TIB):

True Story
KC: "Hi, I'm looking for a financial advisor to help me build a portfolio."
TIB: "Great! We can set you up with someone. How much are you looking to invest? "
KC: "500."
TIB: "500 thousand?"
KC: "No, 500 dollars."
TIB: "Ummmm.....well...how about you just check our website. *CLICK*"

I knew then at that moment that I either need to hit the lottery or teach myself how make a $1 out of .15 cents. With the help of money conscious friends, I created a very rewarding investment portfolio with very little overhead costs. With a little patience so can you! Here are the steps I took:
  1. Learn what Stocks, Bonds, Indices, Mutual Funds and ETFs are. A well balanced, or diversified, portfolio should have a mixture of these easy to attain investments. Some investments are riskier than others, so don't put all your eggs in one basket!
  2. Get free trustworthy investment help. You wouldn't let the cable guy give you plumbing advice so don't let just anyone advise your investment direction. There are plenty of paid professionals out there who get paid to write articles about investing - consult them before you listen to ole' Uncle Jim. I am a Motley Fool fan. Their advice led me to pick a super hot stock with over a 18% return on investment in the past year. That is 3 times the return of a 5% CD!
  3. Get an online broker. Low fees and a low investment minimum is what you are looking for. For your first time around, you just want to dabble with a few bucks to get the hang of it. My broker is ShareBuilder.com because there are no minimums, no account fees, and trades are as little a $4 each! You can purchase Goverment securities straight from the government at TreasuryDirect.gov.
  4. You are looking for growth over time. Don't get so impressed when you see a stock who has gone up $50 per share in a year. If the stock costs $10,000 p/s then that's only a 0.5% increase. Now if the stock was $25 per share, then that's a 200% increase!!! Check out the stock's 52 week performance on Yahoo! or Google Finance.
  5. Never stop learning!

Make a hobby out of it. That is the best way to get going with out getting overwhelmed. Also, find a money buddy who is willing learn with you and share experiences. Can't find one?? Shoot me an email, I could gab about this all day ;-)

The best part is, the next time you're at a cocktail party and people start talking about the volatile market, you can wow them and say: "I took advantage of market speculation and bought low. However, I did hedge my risk by selling several commodities."