Best Approach to Entering the Stock Market with $2,000

When I was in university, I had a spare $3000 left over from some student loans.

I thought "Sweet! Ill make some aggressive trades, high risk, high reward! Ill double my money! Nothing can possibly go wrong!"

That $3k vanished within a month

In hindsight, simply buying a few shares in some well known names would have paid off huge over the next 4yrs.

Are you a student? Do you need money sooner or later?  Goals for the money?  Risk Tolerance?

 If its not an emergency than throw it into a couple different quality stocks.  But wait for the next pullback in prices. Stay patient.

If you really want to trade, practice for a couple months first with paper.  Stick with a few stocks and learn how to follow their movements. 

Get a good understanding of how the macro environment effects the market as well.

Once you get good with paper trading, start small and pick your spots carefully..  Stay patient and dont panic if things dont go exactly as planned..

Be careful with options but IMO is the only way you can grow your money quickly given 2000 in cash..

If u even had 20k id consider buying a house before investing in the market..  but thats a different story

Hope this was helpful, keep asking questions here.  Guys like Stock are very informative and id suggest paying attention to his posts and other veterans on here. 

I would buy a long term dividend stock and reinvest the dividends. Seriously.

How long does it take you to buy a car? You research and find the best bargain. Try doing that with stocks/companies.

I have my eye on MO aka altria. They make a cigarette for a penny and sell it for a dollar. the product is addictive and I know people will continue to smoke it forever. The company rewards the shareholders because they make so much cash with a healthy dividend

enroll in a DRIP program with that 2k and forget about it. Save another 2k and buy another dividend company. Repeat 2 more times.

Then save some money like $1000 and do a trade/options strat aka speculate.

Conclusion: know your priorities. Invest first , speculate second!

Get a job or 2nd job.  Earn extra money where you can and then invest it at the right time. 

Look into starting a Roth IRA.  a great way to save in the longterm.  Its never too early to start one.

But since you probably want access to the money before retirement you could just wait on that. 

Options take awhile to get the hang of and is an expensive learning curve. 

What companies or things are you currently looking at?

Have you started a list or laid out a financial plan?

Plan for the money? Car? House?..

Once you set goals it will be easier for you to stick to your plan. 

Yeah I always tell people that it would probably pay off more to work at mcdonalds than it would to spend time and potentially lose money to trade for most people. As much as I am a promoter of traders, the simple truth is trading is not for everyone and there are a lot of aspects to it that can't be taught. 

I agree with crank and epoch. Best to just invest and take a slow approach to it. With $2000 you are limited by capital and in my opinion that's only enough to enter 1 position rather than diversify. You limit your profits by entering multiple $500 positions due to commissions/small share count so take your time and always have a plan.

Don't forget about paper trading (practice trading with fake money) 

I like trading options.  There's a small learning curve but if they expire several months out and the premium is low over buying the stock, I think that's just sound money management.

Also, I think a very important aspect to investing/trading is saving.  They should be the yin and yang of any small investor.   You should not be risky without a discipline for saving.  If you save little you should invest little but if you learn to save a lot you can risk more.  

So, If I personally had only $2,000 to invest, I would save it for a year and add more to it.   Maybe put it in a brokerage account but not invest immediately.  The discipline of not spending your money or losing it in the markets will help develop a conservative foundation to long-term wealth accumulation.  

Just because he only has a small amount to start with really means nothing.

Small gains add up, so small accounts can do well in a month or years period, if managed well.

1) You must be totaly honest with yourself. If not, you'll only be screwing yourself.

2) Don't swing for the fence. Most people who go "all in" lose.This isn't "texas hold em", it's your hard earned money. Protect it.

3) Don't be afraid to ask a question. Just do it in the right thread. I am sure you've seen people get attacked in the "weekly" threads for asking a question.

I am sure there are others who will also list some thoughts. You've been asking some good questions so far. Don't get too eager to jump in with real cash. Make sure you are at least 7 out of 10 winning trades average ( see note 1 above ).

swing trading forex. Don't over leverage (trade the bare minimum). Don't over trade. 

it's basically like trading any other instrument. hit buy when you want to buy. 

+10,000 (minimum) lot using ToS is $245 if you traded EUR/USD. 

There are 5 major currency pairs to keep tabs on..instead of fumbling through 100's of stocks. 

Seeking advice on what to do with my money?

I have about 2000 saved up from my summer job and want to invest it in some stocks. Should I split into 1000 and invest it into two separate companies? I have been trying to decide what two to choose. I have had my eye on GE, MO, TGT, and AFL. I am open to any suggestions and am still a beginner by far. I want to use the money for a down payment on a house in a few years unless I don't need to then I would like to keep them longer. I also have some shares in T and MRK but are higher then what I bought in at. Also how do you guys decide when to buy in do you wait until the price starts to come down? I would prefer something with nice dividends I have seen some with ten percent plus but there seems to be something else going on or at least that is the way it feels. I noticed one stock back in march that was like that at $13 is now at $6 so I tend to stear clear of those is that a good rule of thumb?

Thanks,

Daniel