Any stock market advice for a high schooler?

Also I have another question, I am in a group with 5 people so any profit I make will be split between us. Unless SSRI makes leaps and bounds, it will probably make us a MAX of a few bucks. If I make enough to cover the transaction fees should I pull us out and just put it all in on penny stocks? Especially as the year comes to a close would it be a shot, since it's not even my money? Then again, maybe I should just take it one day at a time.

Minors can not open brokerage accounts.

It's his account, and besides 75% of us are 18. It's legal for minors to invest.

Also I should have made the guidelines we were given more clear. He does not want us to bother with commodities.

Yeah definitely wouldn't want to waste time on a commodity like gold that's up 17% in 5 weeks. Stick to the Down Jones and you can't go wrong.

Haha! Why not silver instead?

If this were real money you were talking about, I would tell you to wait until you had a job and then invest in a company 401k if available and if not open an IRA and put 15% of your income into that and make sure it is diversified.

BUT, for this exercise, I would put it in oil. Oil is so low right now that it is a bit crazy. Over time it will for sure go up, but if we're just talking the rest of your school year, that's not guaranteed.

Flagpole wrote:

Oil is so low right now that it is a bit crazy. Over time it will for sure go up

Yes it will likely go up again but nothing is "for sure".

I could see it go down even further to $20 or even $15.

Supply and demand. Right now we have much more supply than demand.

People are moving to the cities everywhere (US, Europe, Asia), that means less fuel consumption.

four thirty wrote:

My high school economics teacher is giving us each $20 to invest in stocks. Any advice?

Are you making real trades or is this all just hypothetical?

The best returns over long periods of time are actually found in tobacco stocks, if you can believe that. The two big players in the U.S. are Altria (MO) and Reynolds (RAI). MO has about 50% of the U.S. tobacco market and Reynolds has about 35% of the market. If you had invested $1000 in each of these as of the market close on 12/31/99 and reinvested all dividends, you would now own about $58k in RAI and close to $20k in MO if you held onto MO's spinoffs since then and also reinvested those dividends.

This exercise seems absurd as you have to limit yourself to stocks which trade for less than $20/share. So you are excluding the stocks of many good companies, most of which trade for more than $20/share.

I don't see how it's absurd. Sure we aren't able to invest in larger stocks that require larger sums of money to invest in, but do you really think a teacher can afford to give away a few grand over a project? I'm just happy he gave us $20! Sure, unless someone gets lucky with a penny stock none of us are going to get rich, maybe at most I will get my money back or make enough to go get lunch, but it is still a very fun project and has me very interested in investing now.

Yes these are real trades, and thanks for the advice.

I already made my investment and bought 3 shares of SSRI. Clearly I'm not going to get rich since I don't own enough shares, but it's a fun project.

However I may take your advice and spend some of my personal money on this as well. I have some money that I am interested in investing. I think I still need to learn more about the process though, so keep the advice coming!

Random dude bro wrote:

Flagpole wrote:

Oil is so low right now that it is a bit crazy. Over time it will for sure go up

Yes it will likely go up again but nothing is "for sure".

I could see it go down even further to $20 or even $15.

Supply and demand. Right now we have much more supply than demand.

People are moving to the cities everywhere (US, Europe, Asia), that means less fuel consumption.

Not likely. FOR SURE. I didn't say it wouldn't go down first...but it WILL go up FOR SURE ultimately, and very likely a whole lot. And actually it went up over 11% today. $27 a barrel was just WAY too low and artificially put there mostly by the actions of Saudi Arabia.

Flagpole wrote:

Oil is so low right now that it is a bit crazy. Over time it will for sure go up

Yes it will likely go up again but nothing is "for sure".

I could see it go down even further to $20 or even $15.

Supply and demand. Right now we have much more supply than demand.

People are moving to the cities everywhere (US, Europe, Asia), that means less fuel consumption.[/quote]

Not likely. FOR SURE. I didn't say it wouldn't go down first...but it WILL go up FOR SURE ultimately, and very likely a whole lot. And actually it went up over 11% today. $27 a barrel was just WAY too low and artificially put there mostly by the actions of Saudi Arabia.[/quote]

As you can see in the Down goes the Dow thread, I started shorting oil on 7/31/2015 at $48.77. The March contract touched 26.05 on Thursday. Since the price has fallen 50% in 6 months, who's to say it can't go down another 50% if it triggers a recession? I would not want to catch THIS falling knife no way, no how. There are projections to $16 out there, assuming a recession, and Goldman Sachs still has a projection of $20. Goldman is saying that things may not change for another 1-2 quarters. Unless there is an agreement on production cuts--and the Saudis have actually increased production in the last 6 months, because {u]they need the money--it is difficult to see what would change the trend.

First off I want to point out that you guys clearly know more than I do, so excuse this naive high shchooler question.

What is the risk behind buying oil at such a cheap price? Oil is so low and isn't it almost a certainty that it will eventually go up? I realize that it could continue to drop some more, but it seems that something such as oil will eventually go up if you sit on it long enough.

Is the biggest risk that the company you invest in will drop so low that it just goes out of business?

coach d wrote:

Flagpole wrote:

Oil is so low right now that it is a bit crazy. Over time it will for sure go up

Yes it will likely go up again but nothing is "for sure".

$27 oil going up is FOR SURE.It already has, so I was right.

Congrats kid, you had a 50-50 chance. Even a broken clock is right twice a day.

OP here. Just thought I would give an update, some might be interested.

I ended up buying 3 shares of Silver mining company (SSRI). They have gone up 140% since I bought the shares.

Sadly, I was only able to buy 3 shares for around $5 each, and the shares were just worth 9.39 as of yesterday. I wish I could have bought more, but our teacher just gave us $20 for this project. Looking back I should have just dumped it in a stock worth .01 and hoped for the best. Oh well.

four thirty wrote:

OP here. Just thought I would give an update, some might be interested.

I ended up buying 3 shares of Silver mining company (SSRI). They have gone up 140% since I bought the shares.

Sadly, I was only able to buy 3 shares for around $5 each, and the shares were just worth 9.39 as of yesterday. I wish I could have bought more, but our teacher just gave us $20 for this project. Looking back I should have just dumped it in a stock worth .01 and hoped for the best. Oh well.

Peter Schiff was right!