Can someone share the best way to enter the stock market for someone who is completely clueless on stocks in general yet wanted to dabble in them for quite some time?
This is what they call a Black Swan event and nobody's sure that we've seen the bottom yet.
Edit: If you want to see an example of how these drops can be deceiving and might not represent the true bottom, look at Citi's chart: http://finance.yahoo.com/echarts?s=C+Interactive#chart2:symb...
You don't want to be the guy who bought a large long position when the PPS was $20, thinking it would easily jump back up to 30 or 40.
If you don't know what you're doing, you can lose everything. When you talk with truly successful traders (I know one who makes a million a year or more), you learn to appreciate that doing it well is difficult and requires a discipline that few people have.
You win, you get commission. You lose, it's not your money.
You get a wage either way. If the bank profits you get a bonus too even if you lost your customers money. If you screw the bank up the gov bails you out and you still get a bonus.
http://blogmaverick.com/2008/11/13/the-hedge-fund-disconnect...
Also, are your 401k and IRA/Roth fully funded? Be sure to do that first. (Assuming USA resident here)
1.) Max out employer matching in 401k
2.) Max out roth IRA contribution (in most cases, sometimes you might want a normal IRA)
3.) Max out individual 401k contribution limit
4.) Invest in other things.
If you are not making $100k+, you are not going to have fuck-you money by 40. All the Facebook stock in the world still requires a liquidity event, which is unrealistic at the current valuation.
But that's in terms of general savings. For retirement more specifically, you should definitely start now if you can afford it, due to the effects of compound interest. Try playing around with an interest calculator[1] to see why. But perhaps the best reason is that once you're 40 and have had a few curve balls thrown at you, you'll appreciate that regardless of how things turned out, you'll have put yourself in a good place financially for the long-term.
For the record, I'm in my mid-20s myself, and across my Roth and my employer's SEP-IRA, around 20% of my income is going towards retirement (with other non-retirement savings on top of that). I've set up my direct deposit such that the Roth contributions are totally automatic. It just gets dumped into three index funds: US Stock, Intl Stock, and Bonds. I basically never need to think about the accounts except when rebalancing. It's nice.
[1] Here's one: http://www.dinkytown.net/java/WaitCost.html
I bought Atmel stock not too long ago, it has since doubled in price. I made my money and then some. I bought Jamba Juice when they were still below a dollar, they are now trading at around $2+.
I didn't put a whole lot in, means I can't lose a whole lot, and I definitely won't become a millionaire, but at least it gives me the security that I won't be screwed because I put my eggs in one basket without knowing what I was doing.
(by all means, trade stocks if you're serious, but if you're serious you wouldn't ask)