Expert: Paul Henneman - 6/6/2007

Question
Hello, Paul, I am a 15 year old sophmore in high school, starting early is really wise in becoming really rich later on, can I start getting into stocks now? how do I atcually GET INTO stocks? just go buy one and thats it? thanks.

Answer
Allan,
  Thank you for your question!
  Yes, you are absolutely right that the longer time period you have to invest, the more wealth you can build for later in life. I am not sure how old you have to be to open your own investment account, it is probably 17 or 18. But you could still open a joint account with a legal guardian.
  To begin investing, you will need to create an account. This can be done in person through a financial advisor (advisors charge fees so unless you have a significant amount to start with, not a good idea), or you can go online and open an account on any of online services. Some of the more popular ones are Etrade.com, Ameritrade.com, Scottrade.com   Foliofn.com is a smaller company, but has very low fees to buy and sell stocks.  
   Once your account is open, and you deposit some money to trade with, then all you have to do is buy stock. but this is much more difficult than it sounds. You should not simply buy any stock, or you will likely lose money rather than earn a good return. I would strongly recommend finding a copy of "Investing for Dummies", as this book will help you learn how to research what stocks or other types of investments are best for you. For example, Index mutual funds track the over market, and are a great place to start investing.  This book is available at most book stores, and online at amazon.com   I would suggest reading this, talking with your parents to see if they will open an account with you, then carefully begin to save and invest!
Most mutual funds and other investments do have a minimum amount you need to start with, perhaps one or two thousand dollars. If you already have that, great. If not, you could open a money market account at any major bank, or online at www.netbank.com for the best rates, and begin saving until you get enough together. Money market accounts pay a small amount of return on your savings, so it is a good place to park money while you are saving up or deciding exactly what to do.

I hope this helps! Please do not hesitate to follow up with me if I can be of any additional service,

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com