Real Estate Brokerage & Property Management Blog

Here you will find the latest real estate endeavor stuff I engage in on a daily basis.

Thursday, June 25, 2009

Stocks/Index Funds/ETF's/Brokerage Accts

Hi Prospects & Friends,

I wanted to share another business experience with you all, that might help many of you who may have thinking abilities like me. Back in November of 2006 I had a friend shout out wow I just made $700 off of a stock in 1 day. Well with me at the time being naive about stock stuff, I went to her and said how did you make $700 off of a stock in 1 day? She said my stock broker actually made me the money, & I have know idea what he did. So she then said April don't you have stocks & I said no & don't know much about them. She said you should hire a stock broker and start investing into stocks and grow your wealth besides just having real estate. I left her office and started to think, she has a point & then I started to research stocks myself. I started with searching the word stock on the internet and came up with various stock websites, but none of them were helpful until I ran across Investopedia.com which helps you with stock terminology. As I furthered continuing to research stocks more websites started to appear that appealed to me like Marketwatch.com or Smartmoney.com or Morningstar.com. I realized after all the researching I was doing I wanted to go ahead & spend about a year analyzing stocks. So in all of 2007 I did all my researching, printed articles from various business websites and calculated the equations needed to analyze stocks and created a stock binder. In my stock binder was:

1. Lists of all the stock websites I found that would help me greatly
2. Articles from Forbes, Smartmoney, Marketwatch, etc. explaining stock analysis from different billionaires who have made money over the years.
3. Definitions of the basic terminology needed to understand stocks (alpha, beta, return on equity, gross profit, etc)
4. Line graph charts describing upward & downward trends (y intercept/slope)
5. Examples of stocks billionaires bought & printed them from the investment websites to see the analysis trend and match against the stocks I'm interested in buying.
6. The tax rules & regulations with concerns to stocks/index funds/etf's/annuities

I then after creating my stock binder decided to research Warren Buffet since he appealed to me the most and decided to add a section to my stock binder with his articles from various investing websites like Forbes, Bankrate.com, etc. I remember I came across a article on Bankrate.com quoting Warren Buffet mentioning if you don't know anything about stocks invest in index funds. So I realized I was ready to buy this stuff, but didn't have a stock broker. Well with all the fraud that was going on back in 2007 about stock brokers hiding the investment analysis data from their clients, I decided to research how to open an investment brokerage account myself. After analyzing information from various websites and calling Fidelity & Vanguard I decided to come to the conclusion to make Fidelity Investments my main brokerage account since it worked better for my stocks/etf's/index funds & make Vanguard my retirement account for only my fixed/variable annuities. So after all of the calling from Fidelity & Vanguard reps constantly and asking questions I came up with the conclusion:

1. I will do my own stock/index fund/etf/annuity purchasing
2. I will use Fidelity as the (stock broker since I don't have to pay them nothing) & I've called them various times with my stock data in front of me & asked them questions & they have helped me greatly. They only charge if they purchase stocks/etc for you, but in my case I do my research first then get a little more analysis from them, then purchase myself after they helped me understand.
3. Use my stock binder as a go by
4. Use Warren Buffets book Interpretation of Financial Statements, which I use every time since he uses equations for calculating gross profit, etc. See http://astore.amazon.com/acohaprll-20
So in conclusion it took me all of 2007 to be able to analyze my own stock purchasing and I was able to open my very own brokerage account in 2008 with Fidelity, Vanguard I opened in mid 2008. My point is I'm saving myself stock broker fees by just doing the analyzing myself and purchasing my own stocks/etf's/index funds/annuities. I make it mandatory to glance at my brokerage account once a day by getting online and looking (since Fidelity only sends the statements when activity occurs/quarterly) and also I put in about 10 hours monthly with the analyzing/researching/staying up to date. I like the fact since I manage my own brokerage accounts:

1. I can buy & sell as I please
2. I don't have to rely off of a stock broker to send me data just quarterly, because I want to see data everyday or when I feel like just seeing it randomly without paying extra.
3. I'm saving stock broker fees
4. It's not locked in a 401k or IRA where the control is still being stipulated by the employer
I know all this may sound like alot of work in the beginning, but if you want to avoid fraud in the stock business it's best you learn all the basics and work independently the rewards are greater.

FYI- My friend who earned the $700 in 1 day asked me awhile back so did you ever talk to a stock broker about opening up a broker account? I said no, I decided to do it all myself, & told her thanks for suggesting anyways. She then said April do you realize the risks of what your engaging in? I said what risks you mean where I can get full control of buying/selling my own stocks/etf's/index funds/annuities & not pay stock broker fees, that's not called risks in my vision but rather called entrepreneurial investment smarts. She then looked at me & said April you should get your stock broker license and open up a brokerage firm & manage funds & mind I will be you first client. I said at this time I don't want to go public with managing other peoples funds/broker accounts I like my hobby I've created for just handling for me, which is less risky. She then said April you've used risky different than way I used the word with what your doing for yourself., and that I have the ability to take something out of something someone else recommends & actually engage in carrying out the results to benefit me greatly. I said you really think so, because I had this same situation with my CPA friend see "Tax Forms/Service" article in my blog. I told her honestly I just like saving money & doing my business stuff myself if I can. She then said no April I don't think you realize your research/stock websites are actually an equation you've developed for yourself & that's more than an average person would think of doing just as a hobby. Will offer another article soon.
P.S.- I have so many stock websites I use for my research/investment analysis I couldn't list all of them in this article, so I only listed a couple.

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