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How do I start investing stocks? I have around 50 bucks I want to start buying stocks the problem I don't want pay a commission fee and the second problem is I live in Europe which means I don't have access to apps like Robinhood so if you guys know any alternatives it would be really helpful!

marked as duplicate by Nathan L, Chris W. Rea, Michael, JohnFx Aug 30 '17 at 21:59

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    Earn. Fifty dollars is meaningless in the stock market, as well as a couple of thousand. Earn more money then seek to invest. Once you earn some more you may want to look into DRIPS. – Pete B. Aug 30 '17 at 17:33
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    Do you absolutely want to get into individual stock picking, or are you simply looking to invest in the stock market? – a CVn Aug 30 '17 at 17:57
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    @PeteB. I'm in Europe, and I've been investing for some time, and I've never heard of DRIPS. If you're going to acronym-drop, please at least tell us what you are talking about. Are you referring to a dividend reinvestment plan? – a CVn Aug 30 '17 at 17:59
  • @MichaelKjörling do you have google? Dividend Reinvestment Plan == DRIP. After establishing an account, one can typically buy fractional shares with little or no commission. Typically dividends are reinvested to purchase more shares. You will be forced to pick individual stocks and only those with such plans that are favorable. – Pete B. Aug 30 '17 at 18:51
  • Just get in to gambling instead, it's safer. – Fattie Aug 30 '17 at 20:05
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50 (dollars, Euros?) is a very small amount to invest. The first time I ever bought stock I picked a winner. It went up by about 40% in the first few months. I sold it and lost money. How? I only bought 10 shares at $7.50 each. The profit was less than the two commissions for buying and selling (about $17 a piece). If you are thinking of buying individual stocks, You simply need to save up more money before it will be practical.

If you are not trying to beat the market, which is probably not something an amateur like you or I should attempt, then you should consider low cost index funds. I have money in mutual funds, some of which, have as low as a $100 minimum investment.

I have moved entirely away from picking stocks. It was a good experience and I could afford to lose the money, but as a long term strategy, it just was not working for me.

Note: This is coming from an American. If this somehow does not apply in Europe...

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    Ah, yes. I remember that from when I started out investing in the stock market. (Well, "investing" might not be the best word for what I really did, but baby steps and all that...) I bought three (yes, three!) shares of an IT consultant company at what would today be about $40 each. The commission was something like $15 per trade. Then the IT stock bubble burst. Call it lesson learned? – a CVn Aug 30 '17 at 17:55
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Spend your first 50 euros on research materials.

Warren Buffett got started as a boy by reading every book in the Library of Congress on investing and stock market analysis. You can research the company filings for Canadian companies at http://www.sedar.com, U.S companies at http://www.edgar.com, and European companies at https://www.gov.uk/government/organisations/companies-house. Find conflicting arguments and strategies and decide for yourself which ones are right.

The Motley Fool http://www.fool.ca offers articles on good stocks to add to your portfolio and why, as well as why not. They provide a balanced judgement instead of just hype. They also sell advice through their newsletter.

In Canada the Globe & Mail runs a daily column on screening stocks. Every day they present a different stock-picking strategy and the filters used to reach their end list. They then show how much that portfolio would have increased or decreased as well as talking about some of the good & bad points of the stocks in the list. It's interesting to see over time a very few stocks show up on multiple lists for different strategies. These ones in my opinion are the stocks to be investing in. While the Globe's stock picks focus on Canadian and US exchanges, you might find the strategies worthwhile. You can subscribe to the digital version at http://www.theglobeandmail.com

Once you have your analytical tools ready, pick any bank or stock house that offers a free practice account. Use that account and their screening tools to try out your strategies and see if you can make money picking stocks.

My personal stock-picking strategy is to look for companies with: - a long uninterrupted history of paying dividends, - that are regularly increased, - and do not exceed the net profit per share of the company - and whose share price has a long history of increasing

These are called unicorn companies, because there are so very few of them.

Another great read is, "Do Stocks Outperform Treasury Bills?" by Hendrik Bessembinder. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447

In this paper the author looks at the entire history of the U.S. stock universe and finds that less than 4% of stocks are responsible for 100% of the wealth creation in the U.S. stock market. He discusses his strategies for picking the winners, but it also suggests that if you don't want to do any research, you could pick pretty much any stock at random, short it, and wait.

I avoid mutual funds because they are a winner only for the fellas selling them. A great description on why the mutual fund industry is skewed against the investor can be found in a book called "The RRSP Secret" by Greg Habstritt. "Unshakeable" by Tony Robbins also discusses why mutual funds are not the best way to invest in stocks. The investor puts up 100% of the money, takes 100% of the risk, and gets at best 30% of the return. Rich people don't invest like that.

  • thanks for this, this was illuminating for me. I'm in a lot of debt at the moment but wish to start investing after I clear those. How do I find out if company X has had a long and uninterrupted history of paying dividends? – J86 Aug 31 '17 at 13:29
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    If you visit www.google.ca/finance and look up an individual stock, you can see tags in the stock chart indicating when a dividend was paid and how much it was. There are a number of other freebie stock screeners out there to choose from that will work in a similar way. You can also screen on a whole lot of different metrics with Google Finance so you can slice & dice your search any way you want. – Jerry Penner Aug 31 '17 at 18:44
  • Note that Google's finance tool has been moved to finance.google.ca/finance – Jerry Penner Feb 22 '18 at 12:40
  • Now that Google Finance is dead, Yahoo Finance or www.tmxmoney.com are good choices. Both will show a stock's historical performance over years. The charts have flags indicating dividend payouts. Hovering over them shows the payout data. Missing flags indicates a missed payout. – Jerry Penner Sep 26 '18 at 18:40
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Everything that I'm saying presumes that you're young, and won't need your money back for 20+ years, and that you're going to invest additional money in the future.

Your first investments should never be individual stocks. That is far too risky until you have a LOT more experience in the market. (Once you absolutely can't resist, keep it to under 5% of your total investments. That lets you experiment without damaging your returns too much.) Instead you would want to invest in one or more mutual funds of some sort, which spreads out your investment across MANY companies.

With only $50, avoiding a trading commission is paramount. If you were in the US, I would recommend opening a free online brokerage account and then purchasing a no-load commission-free mutual fund. TD Ameritrade, for example, publishes a list of the funds that you can purchase without commission. The lists generally include the type of fund (index, growth, value, etc.) and its record of return.

I don't know if Europe has the same kind of discount brokerages / mutual funds the US has, but I'd be a little surprised if it didn't. You may or may not be able to invest until you first scrape together a $500 minimum, but the brokerages often have special programs/accounts for people just starting out. It should be possible to ask.

One more thing on picking a fund: most charge about a 1% annual expense ratio. (That means that a $100 investment that had a 100% gain after one year would net you $198 instead of $200, because 1% of the value of your asset ($200) is $2. The math is much more complicated, and depends on the value of your investment at every given point during the year, but that's the basic idea.) HOWEVER, there are index funds that track "the market" automatically, and they can have MUCH lower expense fees (0.05%, vs 1%) for the same quality of performance. Over 40 years, the expense ratio can have a surprisingly large impact on your net return, even 20% or more! You'll want to google separately about the right way to pick a low-expense index fund. Your online brokerage may also be able to help.

Finally, ask friends or family what mutual funds they've invested in, how they chose those funds, and what their experience has been. The point is not to have them tell you what to do, but for you to learn from the mistakes and successes of other experienced investors with whom you can follow up.

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