I'd like to invest in a business, but have no idea where to start. What do I need to do in order to invest?

2016-12-04T19:39:50-05:00

Response by MCPO Roger Collins made Dec 4 at 2016 7:47 PM

2016-12-04T19:47:32-05:00

A novice should not invest in a single business. Best to go with a good S&P 500 index fund. Neverhave all your eggs in one basket. Put as much as you in the fund, while learning about investing. If you track performance of index funds to all others, they are competitive and have low to no fees.

Response by MSgt John McGowan made Dec 4 at 2016 8:14 PM

2016-12-04T20:14:19-05:00

PO2. George, go to Yahoo Finance and read and read everyday. The Morley Fool gives good tips and usually list the good stocks. It also depends on if you are looking for dividends or growth. But by all means talk to a broker, but you still have to be careful. The more trades he makes to more it cost you. I have one I would recommend, but it a little on the high side. It would be AFLAC insurance. Look at dividend history and growth. Look where the company stands in ranking. If it ever splits I will take about 10 k and buy more. Also USAA and Vanguard or good. My 401k has been with Vanguard and I did't lose any when things went south. Just be care and I know when I have reached my limit. There are people in RP that make a living doing this stuff.

Response by SPC Erich Guenther made Dec 5 at 2016 2:01 AM

2016-12-05T02:01:08-05:00

High risk you say? I use my Emergency Funds to dabble in high risk / high return stocks. Overall it has paid off big time but I keep a stop loss order on the stock 20-25% below the value I purchased it at to be safe. Every once in a while I get burned but overall I make decent money.

Two businesses I am keeping an eye on. SUNRUN Solar...........no idea why this company is valued so low because it's sales and installation performance is fairly high but I am invested in it currently for about $10,000 - 1750 shares. Fear on Wall Street, somewhat unfounded that Trump will abandon Solar tax credits and subsidies I think is keeping valuation low. Can't beat the price or upside (NYSE:RUN) read up on it and make your own decision.

Stock #2 NYSE:TCS or The Container Store, valuation punished heavily because financial performance took a dive. They have a recovery plan in place and if the recovery plan is successful they also have a large upside potential increase in valuation. Read up on it. Between the two if I had to guess TCS possibly shorter term climb higher than SUNRUN. SUNRUN looks like it might take a year to produce results due to uncertainty on how Mr. Trump will handle solar but also seems to me that SUNRUN is less risky between the two with a Bullish Stock Analyst rating currently (that can change overnight so be careful with that). Also remember that you can lose a significant chunk of change with either stock if you do not monitor them closely and do not have a floor price established at which you will sell.

Extremely high risk stock but if you catch it on the downside you can double your money. NYSE: TOPS, for Tops shipping lines, I believe it is an Asian carrier but it's valuation bounced between $2 and change and $6 a share if you catch it on a upturn. No idea what is causing this. Look at it's historical valuation chart but beware because Asian stocks that bounce around like this you can lose everything if your not careful. Perfect for the Las Vegas type investor. For the life of me I cannot figure this stock out with it's peaks and valleys but it's volitility is an opportunity for a patient investor that covers the floor and projected cieiling with programmed sell orders.

All three stocks are cheap and should be well within your range of investment. Once again though be prepared to lose money on high risks stocks, if your careful and follow your gut instinct you will make money most of the time but there are the times when you get trounced as well.

Good Luck! Oh and I found out about the first two via my subscription to Kiplingers Personal Finance Magazine, every 2-3 months they bring up 5 stocks an investor should look at most are priced above $20 and are relatively safe but every so often they cover a $5-7 a share stock they think might recover.

Response by SPC(P) Private RallyPoint Member made Dec 5 at 2016 10:48 AM

2016-12-05T10:48:04-05:00

Are you curious about public or private equity?

Response by CWO3 Private RallyPoint Member made Dec 5 at 2016 12:01 PM

2016-12-05T12:01:20-05:00

Whether you're considering starting a business or just investing in one, you're in the right place. Plenty of people here have a a wealth of knowledge. I'm sure there are lots of sites that can break it down step by step but many here have actually done it. There's no substitute for experience with things like this and they can likely shed light on the right courses of action. Unless you have a ton of money then investing in a business is not the best idea. Consider buying financial instruments instead because the venture capitalists have tons of money and it's hard to compete with that. When you buy shares or bonds you are buying part of a business anyway. If you're looking at starting a business, capitalization is always important. If you're going to have to borrow you'll have to provide a business plan that shows you have done your homework. It's good to actually know the product and demographics also, because a hunch is a lot different than actual figures. Much of the rest is admin/legal, infrastructure and logistics but they are important also. It's a big step but plenty have done it and made good. Depending on the scope and size of your idea it might be money well spent to hire consultant(s). Regardless, make sure you separate your personal finances from the business by forming a LLC or similar. If it fails you will at least not be totally wiped out. Good luck.