Re: trade stocks online?
This is going to sound a little bit patronising and I'm certainly not doing it to discourage anyone from having a go but......
I closely work with a whole team of portfolio managers for one of the largest UK financial companies and all I do day in, day out is write, run and test models trying to predict future asset and stock pricing.
Every portfolio manager I know diversifies like you wouldn't believe.
They have literally 100 stocks in their portfolio at any one time, together with options, assets, futures, a selection of foreign currencies, government bonds, commodities, futures and options on commodities, junk bonds, etc, etc and here's the kicker.
Even though they hedge like mad AND the market grows a substantial amount annually, (contrary to popular belief investing in the stock market is not a zero sum game) any supply shock can cause even the savviest investors to lose money.
Hell, even anticipating a supply shock (as people did after September 11) or a mild commodity supply shock (as caused by Hurricane Katrina when it shut down a bunch of oil refineries in the gulf) leads to stagnated markets (all markets take a hit) which leads to loss.
Like I said, don't want to discourage anyone or anything but let me put it this way.
I have a Bloomberg terminal (Extranex really but it's the same thing + we do have the Bloomberg terminal service running on 2x50" screens) + 2 PCs running models on my "desk" and I write 10 investment reports a week.
I also have a mock portfolio management software running so I can test things and here's what I've learned.
Treat the stock market as a casino and only invest what you can afford to lose.
Don't play with money you don't have or money you can't afford to lose because it only takes something like the whole Silicon Valley over-investment fiasco or Enron accounting issues to come up and before you know it you're holding stock thats worth 1/3 of what you paid for it with no improvement in sight.
your mileage will vary
If you are still going to have a go, do this.
Pick 10 stocks and stick their current price in a spreadsheet.
Now give yourself a fund (10k, 100k, whatever but to keep it realistic do it with what you intend to invest, after all 5% growth on $2000 is only $100 but the same 5% could be a substantial payout on £100m) and pretend divide it between said stocks.
Monitor the daily price for a month and update the spreadsheet accordingly.
At the end of the month see if you've made any money.
Just want to add that this is in no way directed solely at Steve, just a general advice for all budding part time stock market traders out there.