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Hi all:

I am going to be brutally honest and start by saying that I have no idea about stocks or investing but would like to start investing some of my poker winnings... Before I do this I would like to take a few months and learn the "ins-and-outs" of it as much as I can before I commit any money... What are some websites where I can start to learn the basics about "penny" stocks which is where I'll probably start and then work my way up... Any help would be much appreciated... Just to re-iterate, I have no idea what I'm doing when it comes to this subject whatsoever...

Humbly yours,

JB

If anyone could point me in the right direction, it would be greatly appreciated... I would just like a few websites to begin to learn how to invest properly from the ground up... Thanks again...

[RocketManJames]

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I would just like a few websites to begin to learn how to invest properly from the ground up... Thanks again...

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Here's a start: Motley Fool Basics

[Ed Miller]

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Before I do this I would like to take a few months and learn the "ins-and-outs" of it as much as I can before I commit any money... What are some websites where I can start to learn the basics about "penny" stocks which is where I'll probably start and then work my way up...

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Stocks aren't like poker... penny stocks aren't "low risk" like penny poker is. Quite the opposite, stocks get to be worth pennies usually because the underlying business is headed for bankruptcy.

What you'll want to do is set up a tax-deferred retirement account, fund it from your poker winnings, and stick that money in an index fund until you learn more.

An example of a tax-deferred account is an IRA: you can put up to a certain amount of money in it each year ($4k for 2005) deduct that amount from your taxable income, and it grows tax free until you take it out after age 59 1/2.

An index fund is a type of mutual fund. A mutual fund is basically an organization that pools people's money and buys securities with it (stocks, bonds, real estate, etc.). An index fund is one that automatically buys all of the stocks on a major stock index (such as the S&P 500) so that the performance of the fund will almost completely mimic the performance of the index. The advantage to index funds are two-fold

1. The process is totally automated, so no one can screw up and over-invest in something stupid.

2. The process is totally automated, so you don't have to pay somebody lots of money who is going to over-invest in something stupid.

Vanguard offers lots of competitive index funds.

Thank you so much for the tips!! Any other suggestions??

[Shoe]

Ed gives some great advice. I would max out your retirement accounts in some good funds before you start buying any individual stocks on your own.

I thought you couldn't put money in a regular or roth IRA unless it was earned income(like from a job)? So a SEP-IRA would probably be the best option?

[Ed Miller]

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I thought you couldn't put money in a regular or roth IRA unless it was earned income(like from a job)? So a SEP-IRA would probably be the best option?

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That's correct. If you have no earned income at all (or poker is the lion's share of your income), then you'll probably be declaring as a professional, and all the poker income would become self-employment income, and a SEP is a good choice.

Here are some of my favorite stock market/money management books:

The ABC of Stock Speculation (Written in 1903)

How I Made 2,000,000 in the Stock Market by Nicolas Darvas


Stock Market Profits Without Forcasting by Leon Allen (Written in the 1930's)

Investment Survival by Gerald Loeb

The Richest Man in Babylon


Good Luck

P.S

Ed is 1000% right about penny stocks.

You guys are awesome, thanks again everyone, and keep 'em coming!!! [img]/images/graemlins/smile.gif[/img]