Your Questions About Great Money Making Stocks

Sharon asks…

How do I learn about my stocks, where do I start?

I have alot of money in stocks from my grandparents,How can I get into checking them and learning about them, is there any good learning sites or where should I start?

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 to plan a full proof budget?

Can you tell me what kind of methods you use to create a full proof budget. I make great money, I shouldn’t be broke and over drawn every month. But, it seems that I always am! I’ve been this way forever and I want to stop! It’s a cycle I can’t stop, so any advice would be appreciated.

John answers:

Budget in things that you do, don’t make your budget so tight that it is unreasonable to stick to it.

I always keep my receipts for everything. You will be shocked how much money you spend and don’t realize, like stopping at the gas station and getting a drink, do this only 3 times a week it cost like 10 dollars for the week. Instead stock up on energy drinks from the grocery store then you won’t be tempted to by candy bars and other things you don’t need, not to mention a lot of times it’s cheaper to by in bulk.

Go to the grocery store only once a week that way impulse buying will only happen once.

Pack your lunch, or if you go out, again keep your receipt the week adds up quickly, 5 dollars for lunch doesn’t seem like a lot but times it by 5 and you just went threw 25 dollars and don’t even have anything to show for it.

Just keep track of what you spend your money on and you will see how easy it is to cut back on things that don’t even matter.

Nancy asks…

What is the fastest way to make money?

Whats the fastest way to make money in the stock market?

John answers:

Look for value stocks. Thats how people like Warren Buffett made their fortunes. You need to do lots of research on the company to deteremine a valuation, then you have to buy the stock at a price that is below that valuation. The bigger the gap, the greater the return potential. The trick is to buy companies that are going to continue to perform, and not go under. Lots of people bought Enron on the way down, thinking it was a good value. You can look to sites like economicinvest.com to identify these types of investments. They provide great philosophy and investments that will grow your money quickly with minimal risk.

Robert asks…

I am a deployed soldier and looking for a way to invest. What do you think about investing in stocks?

I am trying to use money to make money but I’m trying to be smart about it. I am not wanting to look into CDs or putting my money into a savings account. From what I understand the more of the risk you have in losing the money the more of the chance you have in making more. Please if you can give me some insight it would be greatly appreciated.

John answers:

It depends on what interests you. Do you want to be actively involved with your investments or less active? You can easily put your money into mutual funds (via the TSP plan mentioned, especially if there’s a matching contribution to such a plan) or if you want to learn how to invest/trade there are some good books that can help you get started. Know that if you want to be hands on, learning how to trade/invest will take some time, but with good money/risk management knowledge (limiting downside potential) and commitment to learning you can do very well.

I recommend Stock Investing for Dummies (no offense). It’s good book for understanding the basics. I would also recommend How to Make Money in Stocks by William J. O’Neil. It’s also a good one because it tells you what kind of fundamentals to look for in a stock, a bit about how to look for patterns in stock charts and how to protect your capital. It’s the first book I read when I started my stock trading and a very good start for stock investing or trading. Any questions about terms or anything go to Investopedia online.

The great thing is that while you’re learning, you can “paper trade” as you begin to learn strategies. That’s basically where you keep a fake portfolio of your trades. This will give you time to really think about how you want to invest/trade stocks, control risk, position sizing, set goals, monitor your progress, etc.

If you decide to be hands on, I definitely recommend going ahead and opening an investing account to gain access to stock market information, watch lists (fake portfolios) and educational tools that you can use as you begin the stock investing process. You can also familiarize yourself with the broker’s trading platform so when you begin to trade, you’ll have familiarity with how a trade is placed and have access to any resources related to the beginner investor.

I’m a trend trader and am actively involved with my stock investments. So, I’m a big fan of being in direct charge of your money, but you have to have an interest. In 2008, when so many retirement accounts went south I was on the short side and ended the year in the black unlike so many others. If they would have been able to read what was happening with the market trend they could have at least, gotten into cash as the market began to tank.

…just another perspective.

Richard asks…

how to make great money during this financial crisis?

anything can help u make great money or any money at all? how?

John answers:

Buy stock–they’re having a sale!

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