DMD Posted February 21, 2011 Share Posted February 21, 2011 My kid is about to turn 18 and I was thinking about setting him up with some small amount of money to get some stocks and let him own it and make any trades he might want. The intention is to teach him about investing some and get him interested in it and learning about what the stock market is really like - such as just because you like a product doesn't mean their stock is good. There is a myriad of online brokers - TDameritrade, ETrade, Scottrade and others. I have a stock broker but it is not online like I want and besides, I want to fund it with maybe $1000 or $2000 if that is enough to matter. I saw that Scottrade had a minimum of $500. Any suggestions or experiences you would care to share? I want something online for him to take ownership of and be able to make trades if he wants and not cost him too much. Quote Link to comment Share on other sites More sharing options...
Avernus Posted February 21, 2011 Share Posted February 21, 2011 I started when I was 18 and stopped after awhile after owning stock in Enron (I was 20 and still learning a lot about things, plus Enron was supposed to merge with some company) - it was all BS pretty much.. I've had success with my 401k in Vanguard early on when I was 20...while Enron screwed a decent chunk of my portfolio that wasn't all that well funded to begin with... I don't really like investing in stocks, not because of my track record early on but because I don't like going that route....but my experience was definitely an interesting one and sometimes having it rough initially is the best way to learn.... Quote Link to comment Share on other sites More sharing options...
muck Posted February 21, 2011 Share Posted February 21, 2011 Easy user interface and access to research. Frankly, all are pretty similar, Look to see which one(s) win awards... Quote Link to comment Share on other sites More sharing options...
detlef Posted February 21, 2011 Share Posted February 21, 2011 Daytrading can be as addictive and useful as playing Call of Duty, so advise him well about not dicking around with it and checking in every 5 minutes to see what went up and what went down. He's not going to learn about investing doing that, he's going to trick himself into thinking that he's got some formula or something. Hell, it was hard as hell to not fall into that trap when I started investing and I was closer to 30. If I was 18 now, with computers the way they are? It would be like a freaking arcade game. Considering the money is basically a gift from you, I think you could lay down some ground rules. Like he's got to explain why he wants to buy X and what his plans are for it. Is it a long term deal? What will he do if it goes up 25% or more? This isn't to say you'd overrule any of his picks, but he might feel more pressure to take it seriously if he's got to explain his rationale. Quote Link to comment Share on other sites More sharing options...
Sunday Couch Potatoe Posted February 21, 2011 Share Posted February 21, 2011 Daytrading can be as addictive and useful as playing Call of Duty, so advise him well about not dicking around with it and checking in every 5 minutes to see what went up and what went down. He's not going to learn about investing doing that, he's going to trick himself into thinking that he's got some formula or something. Hell, it was hard as hell to not fall into that trap when I started investing and I was closer to 30. If I was 18 now, with computers the way they are? It would be like a freaking arcade game. Considering the money is basically a gift from you, I think you could lay down some ground rules. Like he's got to explain why he wants to buy X and what his plans are for it. Is it a long term deal? What will he do if it goes up 25% or more? This isn't to say you'd overrule any of his picks, but he might feel more pressure to take it seriously if he's got to explain his rationale. this is pretty spot on.. And I use Scotttrade and it can be very addicting at times gotta learn to just walk away after so long of punching around. Started with about 3 grand a few years ago and am floating around 25 grand still in play and 10 grand at my disposal to take out or reinvest. Have done pretty small low risk type buy and sells but have taken the occasion big shot in the dark and a few have panned out very nicely! Good Luck to your son DMD just tell him to roll into it slowly and not all guns blazing! Quote Link to comment Share on other sites More sharing options...
DMD Posted February 21, 2011 Author Share Posted February 21, 2011 Thanks, these were just what I was hoping to hear. Setting some rules for him is a good idea. Quote Link to comment Share on other sites More sharing options...
rocknrobn26 Posted February 21, 2011 Share Posted February 21, 2011 I've been using "Buy and Hold" for about 8 years. Easy interface, $6.99 fee allows for 2 transactions/month. They will allow partial shares and auto-invest dividends. Never cashed any in, nor have I traded...just kinda watch them. Quote Link to comment Share on other sites More sharing options...
Brentastic Posted February 21, 2011 Share Posted February 21, 2011 (edited) I use TDAmeritrade for some of my investments and they have a new trading platform called Think or Swim that I hear is excellent. A lot of professional traders use TDAmeritrade and I've used them for 9 years now. Can't speak for the other companies but I can give a positive endorsement for TDAmer. E2A: You should also encourage your son to read the book "Market Wizards". Successful trading requires immense discipline, patience and strict rules on money management. For instance, you should never risk more than 3% - 5% of your portfolio on a given trade and being a newbie, I'd lean toward 3%. So for instance, let's say you start with $3k and would like to make a trade. 3% of $3k is $90 and you must figure in your trading cost as well ($9.99 per trade - full round turn will cost $19.98) - you're left with a margin of error of $70 after trading costs. So let's say your son buys 35 shares of company X at $10 per share - he would need to set a stop loss limit at $8 per share. So if the trade goes against his long position, he automatically gets out at his 3% loss. It's extremely important to be very strict in your rules and discipline. It's similar to baseball - being successful doesn't mean you have to be right most of the time - you can be successful if you only make money on 33% of your trades AS LONG AS YOU ARE STRICT WITH YOUR MONEY MANAGEMENT. Edited February 21, 2011 by Brentastic Quote Link to comment Share on other sites More sharing options...
detlef Posted February 21, 2011 Share Posted February 21, 2011 I've been using "Buy and Hold" for about 8 years. Easy interface, $6.99 fee allows for 2 transactions/month. They will allow partial shares and auto-invest dividends. Never cashed any in, nor have I traded...just kinda watch them. Gee, that sounds a whole lot like one of those evil, civil liberties-denying savings accounts that some are getting all worked up about. You should be able to sign up for an on-line brokerage account who's cost structure is specifically designed around inactive traders and then be able to day-trade to your heart's content with no penalty. I mean, what sort of country is this? Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted February 21, 2011 Share Posted February 21, 2011 I use ETRADE. Works fine. Quote Link to comment Share on other sites More sharing options...
MrTed46 Posted February 21, 2011 Share Posted February 21, 2011 I've used ETRade and was very easy to learn/use. My friends rave about Ameritrade too Quote Link to comment Share on other sites More sharing options...
muck Posted February 21, 2011 Share Posted February 21, 2011 Also, Interactive Brokers has won quite afew awards for their stuff, but it may be more geared to the institutional investor as it has very little research ... it's nearly exclusively an execution platform (at least that I'm aware of). Also, the advice to read a book or two is a good idea ... Maybe, DMD, you could require him to read and study (say) two very different types of investment books ... and Market Wizards' would be a good one to include as it is (essentially) mini-biographies on people who have been very successful in investing in a wide variety of markets (fixed income, stocks, commodities, etc.) ... and, only after studying them with you, does he get $$$ ... maybe $1000 / book? Quote Link to comment Share on other sites More sharing options...
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