Your Questions About Great Money Making Stocks

Susan asks…

What are some great stocks to buy?

What stocks should I buy that i can make aton of money off of and arent to expensive?

John answers:

First, take 6 months in learning about stocks and trying it out with fake money in a stimulation web site like Yahoo! Finance.

Www.finance.yahoo.com

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.

Mark asks…

Christians: what do you think of our business/money centered world, where stocks matter more than good will?

Stocks, business, making money, using people’s ideas and minds for advertising, science, greed, money,…how everything is about deadlines, budgets, work, money, trade, business, stocks, basically our whole reality at least in 1st world countries, America, etc?

I mean how does a Christian, a true Christian, live in a reality like that?

It’s a reality that many people, if not most people care about money first, success, business, sex, pleasure, self-gain, not exactly in that order, and then of course, the nature and tide of business (which is where the stock market comes in), and basically…how this whole reality is basically completely and totally godless, and it’s only purpose seems to be to get “rich” and what not. This mentallity, and this business/money reality is basically completely god-devoid, and all about itself,which makes people who are enslaved to the system basically 24/7/365 thinking only about money, profit, money, profit, business, and that stuff.

Modern society has already morphed into that. We’re too busy paying bills, buying things, getting cars, fixing up our cars, going to doctors,..and in the free time that we do have, we check out other people because we want to have sex, dine on delicious foods, watch movies, and all that other stuff, and have absolutely NO time leftover for anything else, such as perhaps QUESTIONING, even if you don’t believe, simply QUESTIONING this reality that we live in, questioning why we do the things we do, what we value, and all of that.

If you ask me, as I’ve questioned, I’ve realized that this world makes no logical sense, it’s like a whole huge world of craziness because most people are either too stupid or too morally deprived, to really care or understand or comphrehend that much of our world is a godless, greedy, and disguisting place.

:sigh:

Not to say that everyone is like that or what not, but most people eventually want to “get ahead” or have great lives for themselves and their family and they discover that the way to do that is to master the system, play the system, beat the system, run the system, marry into it, or whatever means they can……nothing to do with God by the way, and then many of them make excuses like “oh GOd would want me to be rich,” and all that other stuff, meanwhile they’re thinking and doing all sorts of ungodly acts and deeds to get to where they want to. Basically, total hypocrisy.

That’s our American society. Total hypocrisy. People flashing crucifixes and proclaiming to be godly, but yet truly aren’t and worship the dollar more.

How do you,and those who are truly Christian, really handle this world?

John answers:

God said if we love the world the love of the Father is not in us. I think rich people can be followers of Jesus too but not many of them. Some people God is money. It just depends on what we do with our money and how we earned it in the beginning. If it was through cheating others and greed and hurting others to get it, then it is sinful.

John asks…

What is a great stock to invest in for a short time to make a nice amount of money?

John answers:

You need to do some research, we don’t have the answer to that question…

Mandy asks…

how do i make money from stocks & bonds?

I don’t really understand them! Could someone possibly break it down for me and tell me the difference, and how to go about using them and reading them?

Or, if you could point me in the right direction, that’d be great!

I’ll owe ya one!

Thanks.

John answers:

When you buy stocks, you own a small piece of that company or that business.
When you buy bonds, you’re buying an I.O.U. That means you are just lending money to a company, like a bank, but with certain terms and conditions.
How stocks work? Back in 2003, apple was only about $3 a share. Today, it’s at $158. If you bought 100 shares back then, right now you would have made $15800 plus dividends.
Most people would tell you that stocks are risky, especially right now, with the market going down. That’s why I advise you to study and invest in stock options. You could make money with options when the market goes up, down, or even during a market crash. A great book to read about options is Understanding Options by Michael Sincere.

Robert asks…

Just how difficult is it to make a living selling and buying options?

I know “day-trading stocks for a living” is kind of a joke nowadays (although, yes, I’m sure 1 out of 50 daytraders are able to make a living out of it), but what about options trading?

I have a fairly solid background in financial markets, but I’ve never explored options. Can I, with no more than $20,000 really make great money selling and buying options?

The stock market alone could earn me 11% on average. What kind of year-end returns could I expect trading options?

Please no links to advertisements! Thank you!

John answers:

I’m actually a fan of selling options on stock I already own. Basically if you’re the guy selling the contract to buy 100 shares of x stock at y price, you:

1) Get cash up front.
2) Will make money beyond the cash you get up front if the option is actually excercised (assuming the strike price of the option you sell is greater than the current price of the stock your selling.)
3) Aren’t taking any big risks that you wouldn’t be taking anyway by holding the stock.

Of course you risk making less money that you’d otherwise make if you simply held the stock and it goes well above the strike price. But most options expire worthless, and quite a few of the ones that don’t probably still don’t make enough to cover the contract price (ie your still better off).

How much you can make doing this depends on the stocks you invest in and the manner in which you do it. Not shockingly people are willing to pay more for options on a hot growth stock like Apple (a Sept 140 call contract trades for $420, slightly more than a 3% yield) than they are for a value stock like Walmart (a Sept 45 trades at $45, a 1% yield). Also the closer the strike price is to the stock’s current price the more its worth but the more likely it is that the contract will be excercised (an Apple Sept 140 contract is worth $420, a 150 is worth $140, a 160 $45, etc). I generally sell contracts that are short term and fairly far out of the money (as far as I can go while still making a decent return).

Okay, that was a lot…

Buying calls or puts is obviously far riskier. My advice would be that you should only buy options rarely, if at all, and look for options that don’t expire for at least a year (more time is relatively cheap when buying options–the first month is the most expensive, as is the first year, etc).

And to answer your originial question– unless you are VERY lucky (and have taken a huge amount of risk) I doubt you could make a living in the short term off of options. But you should be able to augment your returns by selling calls and over the long term that can help the 20k grow.

Good luck.

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