mcesar84

Buy a stable stock with a high dividend. T and MO are a couple of my favorites. Both pay about 5% annually. If you're up over 10% on the share price before 9 months, pull the money out. Opening an account with Ameritrade is free and it's 10 bucks to buy, 10 bucks to sell. $9k invested will yield about $110 a quarter in dividends.

magician

That's fine as long as the stock price doesn't decline (which, of course, it does every time the dividend is declared).

trapper

That could work. Both MO and T are currently selling at $35 and change.

As a rough example and for arguments sake say: $35.50/shr.

With $9,000 you could buy: 250 shrs x $35.50 = $8,875 + $10.00 commission = about $8,885 Total.

Both pay about $0.45/shr dividend each quarter.

If he bought now and held until May 2014 he would collect 3 quarters worth of dividends ; $0.45 x 3 = $1.35 / shr or: 250 shrs x $1.35 = about $340 total.

If held until May the shares could drop in price from the current value by about $1.35 /shr and he’s still have his $9000 in May 2014 …..no gain but no [real] pain either.

If the share price goes up from current levels he’ll make more by way of capital gains. By reinvesting the dividends he could buy a few more shares and get a few more bucks in dividends and [possible] capital gains. If the share price drops more than $1.35 you lose money but that’s the chance you take.

Of course he’ll have to pay taxes on the dividends and any capital gains which would cut his profit.

mcesar84

Its hard to buy a stock with a hard time frame to pull out. I bought some Ford stock in August 2011 at about 10.80 per share. By December, it had went up to 12.35, about a 15% gain in 4 months. Instead of pulling, I told myself the stock was destined for $15 in the next quarter. Instead, it headed down, below what I paid for it. It took until December of 2012 before I saw 12.35 again. I dumped it all right before the end of the year (to avoid new tax rates) at around 12.60. Today, its at nearly $17. I could have held the stock, but then I would have never had the opportunity to get my S (even though I could get an AP2 with what the share price is now, but lets not go there ). So at the end of the day, I have no regrets.

Long story short, discipline is key when dealing with stocks. Its very easy to get greedy, and very easy to kick yourself when you sell a stock too low.

asrautox

Agree with the above regarding restricting yourself to 9-months. The market isn't kind to that type of limitation. I am currently in a hold pattern with my 'play money' as analysts are predicting some market correction within the next month or so. My typical 'beginner' strategy is to select a handful of undervalued stocks, then research each and the sectors that they play in, then I'll narrow it down to 2-3 to invest in based on their share trend (near 52-week low) and potential upside. I just made a little over 15% in 3 months on TDC after solid quarterly earnings. I was lucky and sold right at the spike, which they have since retreated from..

sahtt

This thread was a bit painful to read. The money should stay in cash. Nothing 'safe' is worth the hassle of making $10 or whatever the interest would end up being.

s2000Junky

Agreed, if you want your money safe, put in your drawer next to your hand gun. The catch is you make no interest. There is no entity these days that is safe, which will also yield you any returns worth troubling yourself over in my humble assessment. Our financial institutions and/system overall is on very shaky ground these days, I have little faith in short term investing, let alone long term. Seems like every other day now there is a new banking CEO being caught in some form of corruption or illegal manipulations, and the hole keeps getting deeper and wider. The jig may be up. We have not done anything to safeguard our monetary system, nor clean out the major corruption that seems to permeate the culture. It’s got worse if anything.

Then you see information like this coming out and yeah it just warms your heart about investing in and supporting our broken financial system http://www.vice.com/en_uk/read/larry...-end-game-memo

I do wish you all good luck in your endeavors, and all I can recommend is really paying attention to how the game WAS ...and how it IS changing now.

SlowTeg

^What he said. Although, it's important to keep in mind that it's in their best interest to keep the game going, and how long it can go on for is anyone's guess. If you ask me, the only truly "safe" store of wealth (longer term) are precious metals. Currencies come and go (or are continually depreciated). The stock market is a government sanctioned casino like Vegas. Not that you shouldn't play, but don't be ignorant and think that it's a "fair" game. The dealer always has the edge.

Pinky

www.capitalone360.com it's now what was ING Direct. Savings and checking accounts paying right around 0.75% APR and it's liquid when ever you need it. Better than under your mattress and safer than the stock market.

s2000Junky

Shoot I remember when Emigrantdirect.com had a savings account at 4.75% to 6% and you could transfer funds back and forth when ever you wanted/needed like any bank. That was before 08. Now its 0.5%