how the hell do you buy stocks, do i have to sign up
You can register online with a broker. For longer term investing with over $5k, I like etrade a lot. The tools they provide are great. Not super accurate, but close enough where you don't have to calculate the SML by hand.
(They have a tool that shows your return compared to an index and shows how the risk of your portfolio and gains of your portfolio compare. I try to beat the S & P without having a significant amount more risk than the S & P. You can kind of divide it out...say for instance the S & P is gaining 10% with a risk grade of say 20. That means for every unit of risk you get .5% gain. I try to gain say 14% with a risk grade of 25. Here I get .56% return per unit of risk. I am a finance major and toured a couple brokers. I didn't meet a **** one try to explain to their clients the levels of risk vs. the reward in the funds they were selecting.
Another tool they have that is really great is a stock analysis tool. It shows you that if you choose to add a fund to your current portfolio if it includes the same stocks you already have. This ensures you are not overweighting any individual security.
To make this a little more clear:
For YTD; the S & P has a risk grade of 43 with a return of 6.3%
My portfolio has a risk grade of 50.9 with a return of 11.1%
6.3 / 43 = .1465
11.1 / 50.9 = .218
Therefore, on a risk-adjusted basis, I am beating the S&P. However, I bet mr. broker man doesn't go over that with his clients. Perhaps, they do not care)
If you want to make slow, steady investments without all the tools,
http://www.sharebuilder.com is a pretty good place. They have a $4 per trade, but you can only trade on Tuesdays with market orders. If you dollar cost average, that isn't an issue. You can trade options there with little in the bank. E*trade requires a $2,500 balance to sell ***** options whereas sharebuilder does not. Sharebuilder does cost more per trade (15.95 + $1.00 contract)
Why do people always call it/refer to it as a game?
It seems a little more than a game to me lol.
It is a game because you are competing with the best and brightest world wide. Especially in the shorts/options game. You try to predict what earnings will be and try to get in at the best price. I am not smart enough to go to Harvard, but every once in a while, I will make a better move than they. In the long game, not so much a game but a discipline.
