Investing in Microsoft with Halo 3 Release

[Luke*]

Recently my dad got me into the stock market and he has given me $1000 to spend, now, I know halo 3 is coming out next week and I know it will be a huge hit, but is it worth buying into? I know that microsoft are the developers so I would have to invest into them, but with the fine they got etc lately will halo 3 effect theyre stocks? Please help.

 

[Art]

Revenue from Halo 3 would be such an insignificant proportion of MS's income it would have as much impact on their share price as a bug hitting a windshield of a 10 ton truck.

If you don't know much about investing in shares then buy an index tracker stock which as the name suggests tracks a market index for example QQQQ for the Nasdaq, SPY for the S&P or if you'd like to gamble on China continuing her rapid economic growth then you could buy FXI.

 

[JasonRox]

Revenue from Halo 3 would be such an insignificant proportion of MS's income it would have as much impact on their share price as a bug hitting a windshield of a 10 ton truck.

If you don't know much about investing in shares then buy an index tracker stock which as the name suggests tracks a market index for example QQQQ for the Nasdaq, SPY for the S&P or if you'd like to gamble on China continuing her rapid economic growth then you could buy FXI.

Instead of taking that $1000 and doing on kinds of weird things that an inexperienced investor can do, why not actually invest that $1000 into something that will teach you to invest.

For example, I'm taking a Theory of Financial Mathematics course, and I'm already learning quite a bit. I would just take an actual Finance course and do that. (Not one that is sponsored by a bank, or the NYSE, or anything dumb like that.) Go to a night course at a local university or something.

That way you're going to learn a lot and be capable of applying it as you please rather than pay constant fees for some banker to "figure" it out for you.

 

[Luke*]

I can't do that, he's putting in $1000 to just let me have a mess around, get a feel of things etc. Hes putting it straight onto the firsttrade account, I live in a different coutnry to my father at the moment so that's why he's letting me.

 

[Luke*]

If that's the case about halo, I am guessing a company like Electronic Arts would be effected by a game since they solely depend on games? Eg when crysis is released their stocks will raise?

 

[Greg Bernhardt]

I'd hold on to that cash right now IMO. The market is very shakey from the mortgage crash.

Although this could be a good time to get into EA and hold through xmas.

 

[EnumaElish]

I partly agree with Greg, but part of me is asking "is there a better time to learn?"

For ex., today the Fed has just cut the rate by 0.5 point and the market is "up." What does that tell you about people's expectations about what the Fed was going to do?

 

[Art]

I'd hold on to that cash right now IMO. The market is very shakey from the mortgage crash.

Although this could be a good time to get into EA and hold through xmas.

Putting all of your eggs in one basket is a very risky approach to investing whilst spreading a small investment like $1000 over several stocks means a sizable chunk gets eaten up in transaction costs.

Buying a tracker stock such as SPY one could over the long term confidently expect annualized returns of 14% (based on stock market returns over the last 100 years) As this return is compounded your money would double every ~5 years. In 50 years you'd have a million dollars. Not a bad retirement sum for a one off transaction and with none of the hassle involved in learning how to analyse company accounts, judge market trends, deciding when to buy and sell etc.

You would also have the satisfaction of knowing you are doing better than the 80% of professional fund managers who fail to do as well as the market averages.

If however you insist on the 'excitement' of managing your own portfolio a good way to begin would be to check out what the best players on Motley Fool - My Caps are doing and follow their lead. Stats are presented in a number of useful ways. http://caps.fool.com/?ref=topnav&VSTest=CapsTopNav_Unit2

 

[JasonRox]

It's $1000. You can't learn much by playing around with $1000.

Putting all your eggs in one basket? It's $1000! You can't really diversify such a small portfolio.

If you really want to learn, then work, save and invest.

 

[russ_watters]

When I was in elementary school, my parents bought some stocks in my and my sisters' names - we got to pick them. The point of the exercise isn't so much how much you can make but actually making the choice and watching the stock yourself. It was a good learning experience.

 

[Moonbear]

I agree with Russ that this is a good learning experience, and the point isn't necessarily to make money (that's probably why he's being given fairly limited funds...his father is okay with him losing it all just for the learning experience), but more likely to just get over the fear of investing. Even if it's just a couple shares here and there, you have a vested interest in tracking those stocks and learning something about how they perform over time.

 

[Mk]

Man, take that thousand dollars and buy a few books on real estate investment and spend the rest on Apple stock at strategic times while you watch appleinsider.com: same thing that I've been saying for ten years.

 

[Astronuc]

One could invest in Treasuries or CD/fixed income with little risk, or one could invest in riskier (but potentially higher yield) securities. As GB mentioned, there is a lot of volatility in the market at the moment.

The markets took a jump yesterday in reponse to the Fed's cutting the federal fund and discount rates by 0.5% from 5.25 ot 4.75%. It was more than expected (0.25%), and both rates were cut as opposed to either. That will help in the short term, but unfortunately raises the expectation that it will happen again (if necessary), which would seem to enourage the continuation of speculative or risky investment. Thus I don't see this as helpful in the long term.

If one buys a stock, one must do one's homework in terms of looking at the whole market and the particular sector represented by the stock, and then at the particular company. One has to look at debt, cash flow, return on investment and even at the Executive committee and management to see if they have exercised sound judgement. Otherwise, one is simply gambling with (or against) the vagaries of the market.

 

[glondor]

Put it in a cash account in Firsttrade, Just park it in an account there with what ever interest they will give you. Take a year and study stock trading. Once you have an idea of what you are doing, make some choices and buy. I always prefer low priced stocks in the 5 dollar or less price range for someone with $1000 or less. Do not just buy anything however. Buy what you know, what you like, Buy 100 shares of a 4ish dollar stock, that way you get a round lot.(100shares). Emerging energy (oil) and oil services are the way to go right now. Do your homework, Find a few good small companies. Invest wisely. Good luck. P.s you could turn that $1000 into a hundred grand in 5 years with care, I know of what i speak.

 

[Luke*]

well, I decided to invest 3/4 of it into a solar company, SPWR, and 1/4 into ANX, the ANX is still pending so I mite cancel and put into something else, but I am keeping the stocks in SPWR. Seems sensible to me. With advice from my Dad of course.