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pedrotn · 11-07-2006, 05:22 PM

I guess I should start off by saying that this is my business. I am a RIA (register investment advisor). My job is to build portfolio's for my clients and help them manage their investments.

Assuming you are going to play the stock market with $3,000.00 there are number of ways to go that might give you a better return than what you are going for.

So far you have placed a 2k order to buy GE as your safe play. You would be much better off with a 2k large cap value blend fund. Buy it and forget it type thing. This will give you the diversification of not being tied simply to GE. GE will be held in the mutual fund you pick most likely. This also gives you the advantage of having a investment vehicle that will move. GE is a lumbering giant that takes alot of effort to move on a consistant basis. Since 2004 it has been stuck in a 32-36 range and it is near the top of that range now. Where as a fund like Mairs & Power Growth Fund "MPGFX" ( this is a no load fund) has had the following returns:

YTD 7.24%
3 yr 11.46% (annualized)
5yr 10.35% (annualized)

thats just an example, there are other funds as good or better but it comes to mind quickly

Then for your play money of 1k. I would not make $100.00 purchases. Ameritrade is charging you at least 7.99 per trade. thats 7% in the hole already before you start. You would be better off choosing one or perhaps 2 stocks and playing with those. Personally I would do one, as you would have a great return potential (and of course greater risk).

Also when dealing with stocks that cost under $10.00 it is extremely important to do you research first. Just because something is at the bottom of its current range doesn't mean it has to go back up. Tuesday Morning is a good example "TUES". It has a 52 week range of 28 - 12. However its been mostly a down hill ride so for awhile there everyday was a new low. I know alot of people who bought it at 20 because it was at the low of the range and now look at them. It has just in the last few days gotten back to 16.

I hope this advise helps. Please remember that it comes with no understanding of your current financial situation and I can neither recommend the above strategy or not recommend it without knowing more about you.

Peter

11-07-2006, 05:22 PM	#16 (permalink)
pedrotn Junior Member Join Date: Nov 2006 Posts: 12	Some advise I guess I should start off by saying that this is my business. I am a RIA (register investment advisor). My job is to build portfolio's for my clients and help them manage their investments. Assuming you are going to play the stock market with $3,000.00 there are number of ways to go that might give you a better return than what you are going for. So far you have placed a 2k order to buy GE as your safe play. You would be much better off with a 2k large cap value blend fund. Buy it and forget it type thing. This will give you the diversification of not being tied simply to GE. GE will be held in the mutual fund you pick most likely. This also gives you the advantage of having a investment vehicle that will move. GE is a lumbering giant that takes alot of effort to move on a consistant basis. Since 2004 it has been stuck in a 32-36 range and it is near the top of that range now. Where as a fund like Mairs & Power Growth Fund "MPGFX" ( this is a no load fund) has had the following returns: YTD 7.24% 3 yr 11.46% (annualized) 5yr 10.35% (annualized) thats just an example, there are other funds as good or better but it comes to mind quickly Then for your play money of 1k. I would not make $100.00 purchases. Ameritrade is charging you at least 7.99 per trade. thats 7% in the hole already before you start. You would be better off choosing one or perhaps 2 stocks and playing with those. Personally I would do one, as you would have a great return potential (and of course greater risk). Also when dealing with stocks that cost under $10.00 it is extremely important to do you research first. Just because something is at the bottom of its current range doesn't mean it has to go back up. Tuesday Morning is a good example "TUES". It has a 52 week range of 28 - 12. However its been mostly a down hill ride so for awhile there everyday was a new low. I know alot of people who bought it at 20 because it was at the low of the range and now look at them. It has just in the last few days gotten back to 16. I hope this advise helps. Please remember that it comes with no understanding of your current financial situation and I can neither recommend the above strategy or not recommend it without knowing more about you. Peter