RE: Difference between 401K/Roth and extra money
Posted on: December 27, 2011 at 22:01:10 CT
Mad Money is a show hosted by Jim Cramer every night on CNBC..he has also written great books an talks about stocks, etc, in a very entertaining way an makes investing a bit simpler an fun.
I completely agree with your thought process. My advice is to put in a savings account about $200/month (or more if you can)...let that build until you have a couple of thousand dollars and then start investing this....this should be done also after you have your cash flow emergency fund as well. be willing to lose it all....not that it will happen, but it should be that type of money that you do not need.
While you are doing that, watch his show or other shows on either CNBC or For Business Network...I watch CNBC every morning...they give great coverage overall...not really watche Fox, so unsure.
Then sort of keep a spreadsheet with stocks that you think will go up and keep track, and try to understand why you were right and why you were wrong.
I do various strategies....a few I have bought just because it was a very good stock that got taken down by the market and I think will snap back fast. Some are more of a longer term view. Many times I will buy a stock and if it goes up big, I will sell some of it off an take a profit and let the rest ride. I started investing in 2006, an I am averageing a 7% annulaize return since. By comparison, the market is basically flat in that point...but I have had some stocks triple, and some I have lost 70% or so.
The biggest thing I have noticed is the huge fluctuation and variation of individual stocks, and how the individual investor can take advantage of that, while the big mutual funds really can't.