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Show Page 7 AggielAte Wednesday, Feb. 6, 2008 Stocks: Just pick your favorite three or four-letter word Sound savings advice for students continued from page 5 secret clubs growing up - so every company has an abbreviated symbol of a few letters for their name. This got me to thinking about investing in stocks. As I watched the news and checked out potential companies to invest stock in, I realized I had no clue how stocks work, but I'll try to explain it as best as I can. Stocks are like "American Idol." Nobody really likes it but since there's nothing better to do, you may as well join in. The whole scene takes place in a crowded room in a jam-packed city, with millions of people around the country watching - though they don't really know what for. There is an announcer, though he doesn't look nearly as preppy as Ryan Seacrest, and somewhere - probably locked in a minuscule room in the back of some New York deli eating spicy meatball sandwiches and trying to avoid indigestion - are the judges of the stock market, mostly rejected economists and former secretaries of the Clinton administration. These are the gurus who decide which stocks are winning, and they assign arbitrary numbers and criticism to instill fear in all the contestants and fans out there. Every so often there's a vote to see which stock is winning. I think people even bust out their cell phones and start texting "I luv GEDU" to 666. Once the votes have been tallied up, the final stats are in, and the announcer closes the day by banging on a bell on some balcony while naif the people cheer and throw confetti and the other half sulk off to the bar to get drunk and slit their wrists. Morbid isn't it? At the end of each quarter, the show, so to speak, ends, and a winner is declared, which doesn't matter because starting the next day there is yet another contest, just like "American Idol." There's almost as many "American Idol" winners as there are " N O W That's What I Call Music" albums. Bottom line, nobody with any ounce of sanity really cares that much. But there are a lot of things about the stock market I don't get. Like, what's with the bell? Wouldn't it be more impressive if there were some giant sumo with a sledgehammer that would charge after a gong the size of a display screen on Times Square and smack it to end the trading day? There'd be nothing weak about our economy then. And what's with the whole bull market and bear market thing? I think it's a conspiracy by Chicagoans who are trying to infiltrate the New York sports teams by getting everyone to root for the Bears or the Bulls. You can always tell the economy is in trouble when either team is doing well. Despite how confusing the stock market is, I realize it's my way to get rich quick. I just have to choose the right three or four-letter combos to invest in. Not entirely sure which to choose, I thought about pulling random letters out of the Scrabble box and looking to see if that stock exists, or closing my eyes and pointing at a stock in the newspaper. No matter what I choose, anything has got to be better than what I have been doing. You see, up to this point, my portfolio has consisted of all the wrong three or four letter words: USU, IRS, COV, UTAH, DEMS (my stock plum- mets every time they get into office and raise taxes), BKG, REM and SNES. All of these seem to steal my money away. But I've got a plan to change it all. The way I figure is each year in April I submit my taxes, giving the government money, and thereby buying stock in the federal government. The idea of stock is to build up the company and assuredly there is nothing as big as the federal government. That being the case, my investment should have appreciated by now so I will cash out, earning millions of dollars, and retire to somewhere in the Caymans sipping a Kool-Aid and trying to avoid getting pinched by crabs. And with all this extra money sitting around, I'll have no more need to invest in the IRS stock, so I guess I won't have to pay taxes anymore. Talk about a killer tax return. Before considering investing,financialadvisers recommend having three to six months of living expenses saved to handle any crisis. Always put away a small amount of money into a savings account. For shorter term investments, consider a certificate of deposit from a bank. These usually have smaller returns, but are safe investments and are insured by the federal government. To get a slightly higher return on the investment, look at short-term bond funds. There is a slightly higher -risk associated with them. . If you can invest your money for several years, mutual funds provide a good way to get into the stock market while minimizing risk by putting the money in a wide variety of investments. Seth Hawkins is a senior majoring in public relations. He is about to write a book called "How to Survive on the Lam with the IRS on your Tail: A Memoir." Questions and comments can be sent to him at seth.h® aggiemail.usu.edu Before investing, do research and consider consulting with afinancialadvisor. Information compiled by Di Lewis. From www.askstudent.com. Check out our Web site wu/u/.utahstatesmanxom For more Features, news and sports Native American Student Council 2008-2009 Wall Street: Investing is a trade-off Miss Indian Utah State University Pageant [1 continued from page 5 what finance mistakes people make. The first mistake is not tracking where money goes. People seem to know exactly how much they earn, he said, but they don't know how much they spend every month. "This is a huge mistake," Shoaf said. "This is what causes people to live paycheck to paycheck." The second mistake is that many people don't utilize risk or leverage properly, he said. Risk means "putting money to work," and debt is often referred to as leverage because it dramatizes the effects of risk. An example of basic risk, he said, would be buying some stocks with your own money; leverage would involve borrowing money to buy those same stocks. Since the buyer would be using someone else's money, that immediately dramatize the effect of the buyer's risk or reward, he said. Failure to take advantage of risk comes both in never taking a risk in the first place and in taking stupid risks, like investing all of your money in one stock. Shoaf said failure to really make leverage work for you, instead of against you, is either a fear of incurring debt or being stupid with debt. "Ironically, the fear of failure causes the people to not use risk or leverage in the first place but that's like saying, 'I'm too afraid to drive because I don't want to get in an accident.' Surely, it would be stupid to get behind the wheel without first learning how to drive the car," he said. College students who are not investing today should begin, he said. Although investing can take some time and financial commitments, Shoaf said that, just like life, it's a trade-off. "Isn't one less hour of Guitar Hero every week a fine exchange for financial literacy and life-long prosperity?" Shoaf said. "Isn't one less date per month worth the ability to invest a few dollars?" Shoaf said if a student only invested $50 per month, they would have $3,000 by the time they graduated from college. Students should also invest, he said, because the sooner they invest, the faster their money grows. "Students are students because they want to learn, right?" he said. "Students should invest to learn how they individually react to risk and leverage (and) learning to 'stomach risk' is important, not only for investing, but for life in general." A mutual fund is the best investment vehicle for most students, he said. Stock picking, however, is generally a bad idea for most students. A great way to learn about investing is to set up an online brokerage account and execute your own trades, Shoaf said. But individual stocks, he said, should only be a small portion of a student's investment portfolio. Now, because Shoaf managed his finances well in the beginning, he said he can afford to do things most people his age can't, like traveling the world in 107 days, which is what he plans to do at the beginning of May. Try that on for size. brittny.jo@aggiemailMSU.edu THE DIAMOND GALLERY CELEBRATION Jne Diamond Nailery 30% OIF For USU students 9/otw Engagement $/ng iJ)ur/a//<rt 435.753.4870 • 45 North Main, Logan tist-M tn 1 Y N . H I I V K I ' L I . \J. , 1 a * 1 - i r i i i r i T i h - m i d i 1 ) Visit our other Locations In Pocatello, Idaho Falls, & Rexburg ID Application packets available n the Oflxe of MultkulturaS Student Services, T5C Room 309 U1ULJ ApplicaliOfl deadline Monday. Feb 11. 5pm to MuLbcultural Student Services. TSC. Room 309 Tht P«9*ant wilt takt pUc« during I American Week on Feb 25 - March 1. Minimum Qualifications: V United States Citizen 2, h4trst be of American Indian/Alaskan Native tnbal descent 3.0p«n to * l Nativ* American women (18-25 years of age) U. Must be in good academic slanting & a futt-tirre student 5. Must have a srgle profile *r For more information; Krystle Grant Pageant Coortinator. 1435*1764-7926 Sam Curley. Club Advisor. 797*1733 S p o n s o r s : the Native American Student Counci, Native American Task Force, the Women's Center and Mullicuttural Student Services, Do you want to make a difference in the quality of undergraduate education at USU? Many freshmen and senior students have received an email invitation from President Stan Aibrecht to participate in The National Survey of Student Engagement (NSSE). This survey is important to * USU faculty and administrators who can make changes to improve your educational experiences here at USU. They need to hear from the students who were randomly selected to participate in this important national survey. The survey takes less than 15 minutes to complete so be sure to fill yours out. USU wants your feedback! |