Clueless, need some advice please!

S

someadvice89

Hi all.

I have roughly 15k saved up and want to invest some of it, rather than it sit in the bank & earn a measly interest.

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Now, one of my high-school friends works at a firm as a broker trading futures.

I was interested to start trading with him about a year ago but for whatever reason it didn't happen.

I am not looking to 'get rich quick' -I just want an investment to make some steady profit, with possibility of investing more down the road.

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Is it a good idea to invest with future brokers?

He told me $20,000 is the suggested starting amount. $10,000 is a lot more limited but is also a good place to start.

-I was thinking closer to $5000.

-I dont know, are futures brokers a good bet? OR Should I take a different route with my money?


-Essentially he is doing all the work, I am clueless and just trusting him. My input is only how cautious or aggressive I want to be.

Would I be kissing this money goodbye?

He says he is very good, at the start of the he posted this via FB saying if you were to have invested 20k a year ago you would now have 48k.

All sounds too good to be true.




Any pointers would be appreciated?

Thank you.
 
I would be hesitant to do this.

From the looks of it, you want to invest a moderate amount and have it grow slow and steady, as long as it provides a better return than it would at a bank account. You mentioned you prefer risking $5k, while your friend seems to want you to put up $10k, preferably 20k to start. So the starting requirement is already double the amount you are comfortable with, so this may not be a good idea just based on that fact.

Secondly, the results your friend claims to have- over 100% growth in a years time, usually to get those results, one would be using a fairly risky/aggressive trading style. So one would either win alot or lose alot based on that kind of style. You yourself said you are not looking to get rich quick, so your friend's trading style may not be suitable for your goals.

Lastly, if you do end up deciding to invest with your friend, you should do so after viewing some logs of his latest results. That way you can be more sure if the profit margins he claims are in fact real or if he is simply trying to make a sale.

Also, you should make sure you know their policies for closing accounts/funds withdrawal. You do not want to be stuck in a situation where you have occurred losses on the account and find out they will not let you close/withdraw funds until certain conditions are met.

So that's my two cents, hope it helped!
 
Run away!

Or put up 5k and be ok losing it while learning, then put up another 5k to lose, then maybe you might find a few things to work and you can put up the 10k later.
 
Trading futures is very very hard. Clearly you do not have the passion interest etc. to learn what amounts to a profession which requires the same dedication and tutelage as being a lawyer or a CPA (plus emotional intelligence). Moreover, YOU would need to decide on an acceptable drawdown. Honestly, if your friend told you in a month that your $5000 was now worth $3500, what would you do? Yank the cash? 30% drawdowns happen to even very good traders, routinely.

Take some good advice and run away. If you are ignorant (of what it takes to make money in any particular field), then diversify and buy and hold. If you are not ignorant, then become the best, become an expert -- pay those dues, and success is more likely. No shortcuts here I'm afraid. (Ignorant of how to make money in the futures market does not equal being stupid -- you need to know that you don't know how to make money in the futures market). Wish someone had shared this me long ago. :D
 
He's a freakn' broker! There is at least a 90% chance that he is clueless about making money trading (investing?) futures.

Run. Don't walk. He was not embarresed to pitch you do not be shy about how you shut this down.
 
Take 5k and go on a vacation. If you're "investing" wait for blood in the street and start buying s and p gradually. A very large percentage of money managers can't beat the s$p. Oh and don't take tips from anyone. so disregard everything I just said :)
 
Quote from someadvice89:

Hi all.

I have roughly 15k saved up and want to invest some of it, rather than it sit in the bank & earn a measly interest.

---------------------------------------------------------------------------------------

Now, one of my high-school friends works at a firm as a broker trading futures.

I was interested to start trading with him about a year ago but for whatever reason it didn't happen.

I am not looking to 'get rich quick' -I just want an investment to make some steady profit, with possibility of investing more down the road.

---------------------------------------------------------------------------------------

Is it a good idea to invest with future brokers?
More...
No.

First, I agree with all the replies above. Futures are risky.

Second, if your friend used the word 'investment', he is a scammer and no true friend of yours.

You can't invest in futures. You can invest in stocks that pay dividends but futures are a zero-sum game: for every winning trader, there is at least one and typically a half dozen losing traders.

Trading with scarce money during your learning phase is just asking to lose it. First you have to learn the basics of trading (read the forums here and go to the book section for recommended reading). Once you feel you have mastered the basics, then use a simulation account or paper-trade until you are comfortable with your results.

Remember: your "friend" is a broker. He gets paid whether you win or lose. The very fact that he wants you to commit money with no real trading knowledge tells you that he is looking out for his bottom line, not yours.

Trading is not a hobby unless you are doing it with monopoly money. With real money, it should always be treated as serious business. Especially futures and options trading.
 
I been trading futures since 1986, it is an incredible difficult instruments to learn and trade.

The worst thing you can do is hand over your money to anyone when you have no knowledge. It be like throwing a coin and hoping it lands on the edge to make profits. Most brokers trade poorly, if they traded well, they be trading full time and not have to mess with the public.

I advise you to learn about trading first before venturing into handing over your money to anyone. Have them produce monthly statements of their accounts for min of three years and not their client accounts, if they don't have their own money in the game, they never at risk.

In the beginning, stay with stocks that a solid companies that pay dividends like ConocoPhillips (COP), Realty Income (O), American Electric Power (AEP) , Verizon (VZ)

You look at products that you might use often, so even in sluggish economy times, they would continually make money. But the stock is near making new highs which would not be good time to invest, wait till market has had 20% decline so you end up buying at much lower prices and get more stocks.

Good Luck.
 
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