Newbie Advice?

Discussion in 'Professional Trading' started by Pacridge, Mar 17, 2007.

  1. Pacridge


    If this isn't the right forum/place for this my apologies. As the title suggest, I'm new at this.

    So, here's the short list of info I'd like to get some feed back on:

    I'm 43. I've been contributing to my 401k through work for about 15 years. In the beginning I started by putting in 5%. As I've paid off loans and CC's I have slowly increase it over the years to where now I'm putting the most in they allow, 25%.

    This year I thought about buying a new vehicle but in the end decided the old one runs fine, why spend the cash? So I have some cash to invest. A friend was telling me about Jim Cramer and suggested I watch his show. So I Tivo'ed it a few times. I don't know, the guy might be giving brilliant advice but I can't get past the way he delivers it. Seems pretty clown like to me.

    I started a Sogo account, might be a dumb-ass move, don't know. They just seemed to have really low trade fees. I've only added a very small % of what I have availble. I moved the rest of my cash out of my credit union savings account and out it in a HSBC on-line account because the CU was paying 1.4% and HSBC pays 5.05%. I'm not sure I understand the term "day trader" but don't think I have the time to do that. I wouldn't mind putting more of my cash in the market. I could see having some long term (years) and short term (months) stock, I can't see myself buying stocks with the idea of selling them later that day or even the next.

    So that's my situation, here's my questions:

    Should I continue putting 25% in my 401K? It's with Merrill Lynch and I have it in 5 different funds so it's diversified. Last year I got 28%, this year so far it's been flat. Now that I've built up a balance in there should I lower my contribute rate and start putting some of my cash elsewhere? If so where?

    Was/is Sogo a dumb move? Should I just go with a full service broker and let them handle it? Should I have gone with a different self service provider?

    How about HSBC? I thought 5.05% wasn't bad for a completely liquid situation. But the other day a lady told me they suck and I'd get out of there fast. I never got the chance to ask why? I mean they pay over 5% and I have a ATM card to access it anytime I want, what's wrong with that? My thought is to keep 10K on hand just in case.

    If I decide I want to manage my cash where's a good source to get basic market knowledge? A book, any advice on which one? A web site, even if I had to pay a little to join, as long as I got honest basic info. Or maybe some where on a forum such as this. Somewhere that I can get some of the "basics." Up until a couple months ago I didn't even understand basic terms such as P/E. I read through the posts on here and don't understand at least 75% of the terms you guys are using.

    Any advice would be welcome.
  2. Put it up your employer's match then look at a ROTH if you qualify. When you start pulling from that 401k, depending on your tax bracket, you could be facing a huge tax bill in your retirement. You'r employer's contribution can help offset the tax burden in the future.
    Keep the minimum equivelent of 3 months of your salary in a readilly accessible account in the event you have an emergency. This isn't, "Gee, I can afford that new Bernidelli Over Under shotgun" money; but money you will need to survive in the event you lose your job, a transmission goes out on the car, etc. HSBC may suck as an institution (her words, not mine) so find a better place to keep your money if you share her opinion. Remember, this isn't investment "I want to be rich in the future" money, it's "I just had a catastrophe and don't want the sherriff to take my house" money.
    No insult intended but the Idiot's Guide to Investing may be a good place to get some basic terminology.

    Happy Green Beer Day!

    Drink wisely, and if you have a few, don't drive.
  3. Pacridge


    Not insulted, I'll try to find that book. Informing myself sounds like a good place to start. I spent about 3 mos. trading on paper before putting anything actually in the market. Of course the min. I did it drops 600 pts. Guess you can all thank me for that.

    So you're saying it might be beneficial to have a reg. 401K and a Roth? I'll look into that, my employer stopped matching any couple years back. Said the health beny was costing too much so instead of charging more for that (co-pays etc..) they stopped matching the 401K. Sucked for guys like me, didn't do anything to those not saving.

    Did you have an opinion on HSBC? I agree with your thoughts on cash savings. I just had it in my CU account and was earning basically nothing. Moved it to HSBC and they've been paying me $50 a month for the 10K. Is there some reason I should not like them? Anyone? I'd hate to find out one day I'm screwed and everyone (but me) knew they sucked.

    What about on-line traders? As I said I'm using Sogo. I got thinking about this when, in my 401k statement from ML, I found an offer to start trading through them. They wanted 24.95 a trade and I think an account start up fee. Looking around I found Sogo, they want $3 a trade. What is ML doing that Sogo isn't? Anyone?

    Thanks for your response.