1) You've put money into an investment account per that article above
2) Now you need to actually BUY the stock/ETF
Here are some tips. As always, this is just my practical advice. I'm not a financial adviser. I have been an amateur investor since 1993.
Tip One: Buy in "large" chunks. I normally wait til I have about $1,000 and then invest. The main reason is that you pay about $10 for the trade, which is 1% of $1k and 2% of $500. So you get an extra 1% immediately if you buy a larger chunk.
There’s no real reason for the $1k except it’s a big number. If you put in more than that per month, you might consider doing a “buy” once per month.
As a rule, you want to make as few trades as possible because they cost money. One of the reasons I like the ETFs is that you just buy one big lump of the fund and it's their job to make sure it performs the same as the stock market. If you tried to do that yourself, you'd make all kinds of trades, buying and selling all day.
Lots of trades can add up and significantly affect your overall investment performance.
Tip Two: If you buy something that pays dividends, choose to have them distributed and not reinvested. The reason for this is simply to make your life easier. When you go to sell stocks, you have to declare which stocks you're selling so that the government knows the "buy" price and they can tax you accordingly.
If you buy and tell in lots of 10 or 20 or 100 shares, it's reasonably easy to keep track. But dividend distributions might be in tiny increments of .125 shares or .25 shares. Keeping track of that tiny stuff is not worth your time.
Two notes: You can also use an average buy price when selling, but you also have to track this for the feds. AND your investment firm may also track all of this in great detail and always assume that you are selling the oldest or most recently purchased stock.
As with everything in investing and taxation, this gets complicated fast. That why I just take the "cash" distributions and have them dump into your available cash for investment. Then, when you buy you can buy in larger lots.
Tip Three: Don't track your stocks TOO closely. Part of the fun of investing is watching your investments go up. But that's never a straight line. Remember, this investment is for the VERY long term. Let's assume you retire somewhere in the age range of 65-70 years old, you will be investing for a long time. If it makes your stomach nervous, check it once a month. If it excites you and you don't get nervous when it goes down, check it once a week.
Tip Four: Do not start "playing" the market. Do not start buying and selling, getting in and out and trying to time the market. That can wait until you've been watching this beast for a few years. When it's time to consider an "active" portfolio, you should seek the advice of a financial adviser.
In the meantime, start reading books, reading blogs and listening to financial radio shows. But don't think you can out-think the market.
Here's the deal on playing the market: When you have a massive education and twenty years experience, you might do better than flipping a coin. As a rule, the people who work on this 40 hours a week for twenty years can do better than the average investor. But you can't. You just can't.
Here's a great bit of information from http://www.jpost.com/Business/Commentary/Your-Investments-Stock-market-prognosticators-Better-to-flip-a-coin-339814
"... new research is out showing that you would be better off flipping a coin to make a market prediction than listen to a talking head. CXO Advisory Group collected more than 6,500 forecasts for the US stock market offered publicly by 68 experts, bulls and bears, employing technical, fundamental and sentiment indicators. They did this over a seven-year period starting in 2005. What they found was astonishing: 'Terminal accuracy is 46.9%, an aggregate value very steady since the end of 2006.' This means that only 47% of market predictions were accurate. Out of the 68 experts, only about 25 were successful at least 50% of the time. The top five were right in about two-thirds of their forecasts."
Advisers can help you avoid stupid mistakes. They can help you find some good, solid investments. But jumping in and out of the market all day trying to out-guess the market is rarely a good strategy. (And I'm being nice there because someone will tell story of how they made a fortune. The other seven billion people on earth will not have success with this approach.)
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Quote of the day: “The only function of economic forecasting is to make astrology look respectable.” - John Kenneth Galbraith
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