Your Questions About Good Money Making Stocks

James asks…

What drives the price of stocks in a company?

I understand that the price of a stock is what someone is willing to pay through supply and demand. But what makes a stock worth paying for?

I suppose that if the company pays a dividend, that automatically makes the stock worth something since, in theory, that dividend would be paid out indefinitely.

Is it based on how much the company could sell for since the stock could be bought out? For example, if a stock is currently selling for $10 and the company is not issuing any dividends, does that mean that people think they would get about $10 out of the deal if the company were to be liquidated? That would explain why the stock prices rise and fall based on how the company is doing.

Thanks for any insight you might have!

John answers:

Its 100% supply and demand

If more people want to buy (for whatever reason) than sell then the stock price goes up

If more people want to sell than to buy then the price goes down

There are millions of reasons why people might want to buy and sell
eg. If the price collapse some people might want to sell so as not to lose all their money
others might want to hold on and hope the price recovers
others might buy cos they think it cant get any lower, so its bound to go up
others might buy cos they think the company is likely to be taken over
there are as many reasons as there are buyers and sellers.

In the final analysis the reasons dont matter a damn – the price is determined by supply and demand.
You think the stock will make money – you buy (or dont sell)
You think the stock will lose money – you sell (or dont buy)

Mary asks…

What is the best way to increase my money?

Hey guys
I’m 16 and i got $2,500 I want to save this money and make it increase
what is the best way to do so?
I know about saving accounts but i can’t make an acceptable amount of money out of that and the stock market is to risky

any ideas about any other safe way?

John answers:

At your age, I’d put it in an index fund or a no load mutual fund and sit on it for 20-40 years.

Mark asks…

can a teen invest in stocks or other stuff?

first of all, can a teen invest in stocks or other “money making schemes” or do you have to be over 18?
if a teen can invest, what is the first thing you should do? like what type of bank account do you need to open and stuff like that, stuff you need to get started with.
what could be some good investment for starters?

John answers:

Invest in stock require business knowledge. You need to know inside out of the company, how it is going, how they compete and what makes them so special.

Warren Buffet selling newspapers from doors to doors in his childhood. He know how difficult business is and what it takes to be successful. With his vast knowledge in business, he only use common sense in his investment decision.

I suggest you learn as much as possible about business too. Don’t easily get tempted to rush into stock market because many fail trying. And learn how Buffet invest in stock market.

Step-by-Step Stock Investing for Beginners
http://www.stock-investment-made-easy.com/
http://answers.yahoo.com/question/index;_ylt=As61UR4DWXZnVDIVK6se6XLty6IX?qid=20070717183111AAk8IIS&show=7#profile-info-kFApW5uJaa

Carol asks…

What is the exact % for taxes on the online stock?

I live in OK and I am ready to invest money into stock on-line. How do I know the exact % for the state and federal tax on the stock money I make? Is there a website or what should I do? Thanks !

John answers:

There is no exact %. Stock gain is called capital gain. Capital gain or loss is added or reduced from your gross income. So if you made $25k a year from your job and then made $5,000 a year from stocks, your gross salary would be $30k and you would be taxed according to the tax bracket of people who make 30k a year.

Laura asks…

Is buying and selling or trading stocks very difficult to handle,whats a good way?

to make money in the stock market i know a little bit about it already.

John answers:

Ifound it relatively easy but very boring, I made $200 the first month, by the end of 6 months I had made about $1500 and the first year I made enough money to buy a repossessed home by the sea for $65.000 which I just sold for a cool $90.000 it isn’t only the money but I spent the summer in it so that was a bonus, and I sold its furniture for an extra $15k but that’s got nothing to do with stock I guess, just to say that now that I have a little bit of cash I’ll be buying and selling houses, it is much more clear cut.
Yes I would say it isn’t very difficult but boring and the rest.

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