Your Questions About Good Money Making Stocks

Robert asks…

Can you make money buying a stock?

Ok so my dad told me about this and im Totally confused! I live in the USA so can somebody tell me about stocks and how you can make money buying one or something?!?!
Thanks!

John answers:

Stock represents the ownership of a company. If you buy stock in a company and the company becomes more valuable the price of the stock goes up, and you can sell it to make a profit. While you’re holding the stock, if the company makes a lot of money, the company will distribute some of the profit to the owners, the shareholders. This distribution is called a dividend.

Sounds great, right? After you buy a stock, the company could lose value, and then you’re holding a stock that is worth less than what you bought it for. If you think you will just hold it until it goes back up, you will very likely end up with a stock that is worth even less money.

On average, people who put money into companies make money from doing it. In the past, stocks have returned about 10% a year on average. Many experts think things are changing, and in the future we’ll see about 8% on average.

Within that average will be many large differences. Some years the markets go up, and some years the markets drop suddenly (we call this a market crash). Within the market, some stocks do better and some stocks do worse.

You can make more than 10% (or 8%, depending which experts you believe) by making riskier investments. These have a greater chance of going up a lot, but they also have a greater chance of going down a lot. (If they had a greater chance of going up a lot without a greater risk of going down, people would rush in to the investment, bidding up the price until the upside and downside were balanced.)

Donna asks…

how much money can you make off stocks?

i want to invest in stocks but have no idea what stocks are or how they work or how much money can be made by investing and trading them somebody please put in simpliest terms what stocks are and how much money can i make off them

John answers:

You can make as much money as you want in stocks the only thing that will hold you back in doing that is how much time you put into watching, perdicting the out come of it and knowing when to pull out. Stocks is investing some of your money into a company or companys so that company/companys can make there product or future product. Example apple inc. You put some money in so they can make there next product or more products, the stocks go up when more products sell and gos down when people are not intrested in that product any more, how the stocks go up and down is not to do by the people buying and selling but on how the bussiness dos. Also something to think about on stocks witch scare people is taxes on stocks. If you gain profit on stocks the goverment will take taxes from that profit but if you loss profit you can gain money from that loss, just some word of advice.

Steven asks…

What does it take to make money using the stock market?

I’m 16 years old and have about $150. I have always been interested in stocks but know that it can also be very risky. I haven’t yet decided if I want to be dedicated to trying to make money off of stocks but if I receive good advice and info here then that could change my mind. I don’t have a job but am pretty busy with school, varsity soccer, and club soccer. I feel like this could be a good idea to make some cash and would like some advice from people who are involved in this business. By the way I am in marketing 3 and DECA so I understand some basic things however when I asked my teacher about stocks she didn’t know much more than I did and could care less. Thank you in advance.

John answers:

There are many stock trading sites that have practice programs, so you can try your hand at no risk. As a minor some stock trading sites allow you to open an account with much lower margins than adults(with your parents permission of course). $150 is kind of low unless you are trading penny stocks which tend to be junk.

I would start with a couple of these practice programs (search Stock Trading Practice) and then see if your folks can bump up your investment with some seed money (i would say 300-500). Keep in mind a trade generates a fee from around 15-50 dollars but that is per trade so if you are just trading one or two shares the fees will eat up your capital.

George asks…

Is anyone making money with stock photography?

If so, do you have a link to your gallery so I can see what is working for you? Also, if you don’t care to share a rough estimate of what you make monthly that would be nice. Thanks!
I am not asking anyone to tell me the exact amount they make…just a ball park figure of what these sites are paying. Just give reasonable estimate of your earnings per month, not an exact dollar amount.

John answers:

Yes thanks, I make a reasonable amount from stock.
No, I won’t give you links – the best way to make money from stock is either to have unique marketable shots or follow the crowd and hope for the best. I try and stick with the former.

I make 5 figures a year on average but that has gone down quite a bit in the last few years for various reasons.

If you want some stock lessons then check out http://www.arcurs.com

David asks…

Stocks: How do people make money when prices decline?

My mother is a person who invests in stocks. She told me that she made a lot of money in the financial crisis cause prices were declining. She told me about how she makes money from a pessimistic market, and she basically is a ‘bear’.

What I don’t understand is how do you make money when prices drop?

John answers:

I believe there is a way to sell stocks before you buy them. Its called Short-Selling and is good in a failing market. When you short sell a stock, your broker will lend it to you. The stock will come from the brokerage’s own inventory, from another one of the firm’s customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. Sooner or later, you must “close” the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.

So basically to sum it up the market is crashing. You bet that it does so you sell stocks before you buy them. Then you buy them again at a lower price, giving you a profit.

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