Your Questions About Good Money Making Stocks

Sharon asks…

I’m 13 and I want to start investing in stocks to earn some money. What are some good starting stocks?

I can spend around $100 but I want to be able to earn it back plus more. I want to go to Europe but I have to raise the money. I just want some lower priced stocks. If I make money in time. I will be able to spend some more.

John answers:

If you’re a rookie in investing or stocks, go to

www.finance.yahoo.com.

Open up a portfolio without using real money. You can give yourself as much or as little money to try out the market. The stocks you want to focus on is consumer staples, consumer discretionary, and healthcare. These are DEFENSIVE stocks that will survive through good and bad times. Most of my positions are in these stocks. Some names include 3M, Procter & Gamble, Kimberly Clark, Exxon Mobil, Walmart, Costco. Everybody’s got to eat and wipe their butts regardless of the state of economy. Many of these companies survived through the Great Depression.

That’s the benefits. You can sleep at night knowing your money is doing well. There are NO guarantees that you won’t lose money. It’s just that these stocks are the best. They pay good dividends too.

Then once you’re comfortable and test the waters of the market, you can finally put some real money in. Go to Scottrade.com. They’re excellent for beginners.

If you’re new to stocks, DON’T DAY TRADE. You’ll a rookie in a world of professionals. I tried day-trading with Citigroup and AIG when they were a little bit over $1. I had some luck at first, making about $30 a day but I was way over my head. My luck didn’t last long and I had to rethink my strategy.

Day trading involves A LOT of commissions to the broker. With all the commissions deducted from each trade, you’ll be lucky if you only lose half your money.

I would just day trade using Yahoo! Finance. Open a stimulation account, give yourself $100 worth of fake money and play it in the stimulation format. You’ll see what I mean by losing money every easily.

Good luck.

Mandy asks…

How long does it take stock brokers to start really making money?

Iam 14 years old and I want to be a stock broker when I grow up, but I want to know the average it takes for stock brokers to start making good money.

John answers:

You begin making money upon getting hired for a job! Keep in mind that your first job as a broker won’t be for yourself–you will be working for a firm. They usually stick the new hires in cold-calling positions and sales positions where you sell products for commissions. During this time, you may or may not make good money immediately, as it takes time to refine your skills and get the commissions going. But you’ll be working for experienced firms and have a mentor of sorts so it shouldn’t be too bad. After a couple years, you could probably apply for a different job such as financial planner or maybe go into another segment of the business. You will also spend a portion of your time studying for and obtaining your series 6, 7, 63 and other trading licenses.

Carol asks…

Are stock splits a good way to make money?

When a stock is split do people make good money most of the time?

John answers:

Yes and no. What stock splits do is give all the people who own shares in the company more shares after the split, but the stock price is supposed to go down so that the ending total value of the stock remains unchanged. For example, if you had 20 shares of stock and the stock was worth $50 per share your total value would be $1,000 (20 shares x $50 per share). The stock splits 2 for 1, you now have 40 shares, but the stock should be worth $25 per share, with your total value unchanged at $1,000 (40 shares x $25 per share). What a split does is make the stock cheaper so that more people feel that they can afford it, so that more people might be it. Plus also, the company may prefer that there are more shares out there so that it can be traded more easily, with less volitility of the stock from having fewer shares traded. The only stock that doesn’t believe in splitting is Berkshire Hathaway, which is run by Warren Buffett. The last I knew, Berkshire Hathaway was trading around $110,000 per share, and had not split at all since Buffett took over control of it in the early 1960’s.

There are also reverse stock splits, which would work the exact opposite. You start off with 100 shares and the company does a 1 for 10 reverse stock split, you end up with 10 shares, with the total value of the stock unchanged.

Ken asks…

Does anyone own Home Depot stock and are you making good money from it?

John answers:

Well, I own it, and we recommend it, but I wouldn’t say anyone has been making any earth-shattering money with it lately. It’s been relatively flat in recent years.

I still think it’s a good buy, though, as the company seems to remain on a good growth trend. The share price today is relatively low for this stock, and if/when it comes back into favor, it should provide some nice profits.

Chris asks…

Stock-good one to make money fast?

I am doing a project in my high school economics class and it is based on the Stock market game. It is a online game that uses real stocks and fake money to see if you can make money fast. We can invest up to 25,000 (per stock) and have to buy at least 100 shares of the stock. Does anyone know a stock that is low now (buy low, sell high) that I could make a lot of money (fake money) off of quickly. Or a good guess at one?

Thanks!

John answers:

Penny stock is one option, you will have to monitor the market and you have to be quick. Some stocks I have been watching are the following: Ford(F), SMP, PCS, PG, APPLE. All these stocks have reported gains in the last 6 months. Research the company from where you are buying the stocks and look at their history, they will show you a trend, base on that you can decide if you want to buy. Www.blackberrystocks.com is a good website.

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