Having a pro do the work for you?

[Ann Ahl]

Last night I was out with a friend of mine and then we started talking about money and work until we mentioned stocks. He don't know a single thing about stocks except it can make someone very rich.
So when he heard I was interested in stocks and heard I don't have much money to start off with he wanted to make a sort of partnership with me.

He would give me all the money I need to do my stock investing/trading etc.
Then we split the income.
So if he give me 3000$ (I understand he don't feel like giving more than that before he sees I make some profits) then I turn it into 10,000$. Then I would give him 6500$ back and keep the rest. I splitted the income (7000) which is 3500$ and added the money he gave me which was 3000$ Which equals 6500$ That's his money. The 3500$ that is rest becomes mine for doing all the work.

We haven't started this yet we just thought of the idea and I would think about if I can do this because I really don't want to loose my friends money. That's worse than loosing my own. I'm a fair man.

Now I thought that what if I asked a proffesional stock trader someone like Dan Zanger for example. I give him money to work with and we share the profit.

From my view I can't see a downside why a pro wouldn't accept this deal because who wouldn't mind making some extra money? He would have to do all the investigating in stocks anyway for his own portfolio. So I don't think it would be much extra work for that extra money.

I just want to hear if this would be a good idea or if I'm out of my mind
Also if anyone would like to do this for me I would like to see how good you are first.

[Fredledingue]

Answer is no and no.

First never put your money toghether with a friend or even a close relative: That's the best reciept for the worse relationship problems.
If he loses money it will be your fault.

Second, stocks don't make poeple very rich, it makes them very poor too, in the best case, like me, you barely break even.
If you don't know in stock, then it's like playing roulette or scratch-lotery bills.

Third, you can start trading with little amounts, like $2000.
For example, you buy 2 stocks for 700$ and keep $600 in cash. Wait until you make a profit and sell, then buy another stock etc.
For that you need a low commission fee brokerage but it's feasable.
You won't make much money but will learn for the time you will have more money.

Finaly, if you want a "pro" to manage your money, invest in a fund (that can be in the form of stocks too). Funds are managed by pro and are relatively safe.
You still can lose money with funds, but rarely the 50% you can lose with stocks that issue a bad piece of news one week after you bought.

HTH

[Ann Ahl]

Hmm, funds huh
I've heard that word before but haven't got a clue what it is except for what you just told me.
I'm just a week old in this stock market business and I can only read one thing at a time, so much info out there for reading gives me a bit of panic hehe. Hard to choose what to read next. I'm almost done reading through all Airelons blogg. Also read most of the tutorial at a brokerage website that I can't remember the name of. and I have at least 10 more websites bookmarked that has more info for reading.

Also I don't want you to get wrong impression of me.
I do find the stock market interesting. I think it could be a lot of fun once I know how everything works etc.
It's like learning a language; You won't enjoy speaking it before you have learned talking it fluently.
I just wanted to see if there was a way to make some extra money meanwhile I'm learning because it could take some time to become good at it.

So thanks for the tip about funds

[Fredledingue]

Indeed, there are two ways to look at it:

1/ You want to learn about stocks because you like learning new things, make your neurones work and do something exiting.

2/ You want to find a way to increase your capital.

In the 1st case, don't think too much about earning money. You learn a lot when you lose. You learn very little or at all when you win. So if you earn money you ill learn less than if you lose money. That's because in face of failure you will tend to try to know why.

In the 2d case, finding a good fund can do it with minimum hassel.
Either your local bank have already fund portfolio products which fit your profile and personal target. Or you can trade fund stocks, like company stocks, on a brokerage account. The latter can give better return.

For example your bank will offer you a "package" with a calculated risk and an expected albeit non guaranted return of 15~20% a year.

Or you can open an account at a broker and buy one or two Berkshire Hattaway (BRK-a), wait 3 years and eventualy make more than 20% a year.

[EvaluatingStocks]

Hi Ann - no doubt about it - the stock market can enrich but for beginners it is a dangerous place. Even for the most seasoned pros it is extremely hard to beat the market. In fact, Wall Street makes most of its money charging average investors like ourselves fees for trades, services, etc.

Take a look at John Bogle's book The Little Book of Common Sense
Investing (Bogle founded one of the biggest mutual fund companies ever -> Vanguard). He has some excellent points for novice investors.