Young guy, questions new to the game
$5000 is a great start, and if you have done your research as you say, you could get a good footing in the market off this. Do not put all $5000 into one stock, buy a few shares of 5-6 different companies and slowly build the positions in the shares that are doing well.
The best thing for you to do is to stick to companies that you know, lets say AAPL.
Start following the stock price, press releases, news items etc.
Soon you will find that your universe of stocks will expand as you start to follow more and more companies.
There are plenty of educational resources in this section or just click the wikis link at the top of the page, that should guide you through it all.
I wouldn't start with $5000, but with $500. Do you research and start with the $500 in the markets. The chance is pretty high you start losing money because you don't really now when to take profits and losses etc. You will learn this by learning from your own mistakes. After a month or 2 you put $4500 more in the markets and start with the knowledge you have gained in the past months.
I think everybody here lost money when they start, so it would be a shame to lose an amount like $5000.
I have to disagree, I think you need a larger sum to really start and get the hang of it. In my opinion it is difficult to start with anything less. At $500 you're really just going all in, absolutely no money management, nothing. You're limited to what you can buy and what you can't, can't even buy 1 share of AAPL or GOOG. I agree with SJ-e, you need a manageable start up otherwise you limit/hinder your learning experience.
If i were you id put the majority of the 125k towards US property. If you find a good property it might only be a 10% down payment. If rental yield pays for house payments then you can own half the house in 5-10 years. Nows a good time to buy in certain parts of US. Banks are still trying to get properties off their books so they are selling for 40-50% retail..dirt f'n cheap. look for auctions. talk to bankers. real estate agents often have the heads up as well on cheap properties if they havent bought it themselves. develop relationships.
I know little about Canada market besides Alberta area. Look around, your sis may be savy to buy your share of townhouse.
As for the stock side. SJE always has solid advice.
Or come to Shanghai and I can set u up with a great portfolio. only 1% per annum fees. cant get much cheaper than that. :)
So, be smart and learn to make bank in the stock market but also have the real estate to fall back on when things make a turn for the worse.
I know where you're coming from. I started trading stocks when I was 18, (19 currently, turning 20 next year) and have had some success.
I think $5,000 is an alright number to start out with, I started out with $1,000 and ran into the problems of commissions cutting into my profits. As they say, it was "death by a thousand cuts". I had to change my strategy to open only one or two positions at a time, so that the $10 buy, $10 sell commissions wouldn't cut into my net gain. Though I would say $1,000 to $5,000 is a good amount to start yourself off with.
If there's any advice (for what it's worth) I can give to a fellow young pup: Persist. Keep educating yourself, learning from your mistakes, etc.
As far as the other $130,000...
Good luck, if you want to take luck out here are some great threads: (take it for granted you follow Stockjock and Rando)
http://www.hotstockmarket.com/t/166656/marks-trading-log (this guy works hard for a living)
Itchi,Mr.Oldfart,07media,Chan,Mjoke to name but a few - the site is littered with quality and nice people you can get a good feel for the market here.
Never be fully invested always have some cash aside so you can stay in the game.
I would keep it simple. KISS.
25% of all stocks (on average) move against the markets. So if the markets go up, 1/4 of stocks are going down and vice versa. There's no guarantee you will have a winning stock.
A few years back, ETF's came out and offered investors a sure thing no matter which way the markets move. UPRO will always rise when the markets go up, and SPXU will always rise when the markets go down.
So instead of going through 8,500+ stocks for a winner, and trying to figure out technicals and fundamentals, or which signals are the best.. simply take the same time you would spend learning how to pick stocks and put it towards learning how to time the market.
Once you learn that you will never go hungry, as you simply buy UPRO when markets rise and SPXU on the downside (or any other combinations of ETF's available) and you will always profit, provided you are correct about the market direction.
I gave up stocks two years ago and do this only. In the past two years I've done 39 trades. I buy UPRO on the way up and then when the market corrects I sell it and buy SPXU each time compounding my return. Over the last two years I've had 11 losers (average loss of 7.36%). 28 winners (average gain is 21.34%) for a net gain of over 670% in last two years. Average holding time is 2.66 weeks before switching positions (about two trades a month).
Risk is lessened due to the fact you are investing in the 500 companies on the S&P 500. It can never go to $0 overnight like a stock can because the company behind it went bankrupt.
My best advice would be to first learn how different people in the street value stocks and each perspective. Know that there are value investors who hold long term as well as technical analysts who just trade stocks depending on the direction of the trend. Once you have a good footing of both of those and you start correctly predicting where price is going by using both techniques (value investing to know whats good to buy, technical analysis to know when to buy) you can make a decent amount of money from that amount by using options trading. If you think AAPL (Apple) is going to go up 200 points next year then you can look into LEAPS (long term options) that expire on 2014 and control 100 shares for almost that same amount. Options offer a lot of leverage allowing you to control a stocks price movement without getting fully invested in it however they do have their risks.
Did you decided what is intentions? How are going to invest your money?