How does one pick stocks?
April 25, 2006 4:40 PM Subscribe
I'm seeking advice on and a short term investment strategy that won't offend Grandad.
posted by godawful to work & money (41 answers total) 2 users marked this as a favorite
My Grandad has offered me some money to invest over a 12 month period. I can keep what I make in excess of interest. He's made it implicit that this venture carries no financial risks for me (I trust him fully). It's clear he mainly wants this to be a teaching and bonding experience for us.
So far, so good: this is a generous offer, I'm keen to have this experience with him, and the last thing I want to do is appear ungrateful. However, he has in mind that I should pick a few stocks and sink the money into them exclusively.
I plan on going along with him on this in spite of what I think I know of the market. I'm pretty sure I understand random walk theory, that short-term stock picking generally comes down to luck, but I know he believes and behaves otherwise. He's a restless investor, always going into this and out of that.
I don't plan on arguing with him over this after he's been so generous, so a sensible mix of funds/indices/bonds is out. With this limitation in place, how can I best promote my own gains and protect him from any loss?
How does a complete beginner pick a stock? He seemed to imply that he'd just give me the money and I should set up an account with a broker or something. Is that a sensible way to go about it?
I would be in the US, while he's in Belgium. Any implications from being in different markets?