Your Questions About How To Invest

George asks…

How do you invest in the stock market on your own without a broker?

How do you invest in the stock market on your own without a broker?I want to Invest but I don’t want to pay a broker.

John answers:

Investing is a risky undertaking. Remember, you’re giving your cash in return for a piece of paper that could easily turn out to be worthless or an empty promise.
For a small retail investor the cost of a discount broker is money well spent. Besides I don’t think that you could buy equities without going through a stockbroker. They are licenced to buy & sell stocks. Even when you deal with a broker you should find out exactly what you’ll be getting for your money to avoid disappointments later.
Doughboy talks about companies where you can invest directly; I think what these companies allow you to do is to reinvest dividends but I think you must do it through a broker. It’s called DRIP (Dividend Re Investing Plan)

Ken asks…

How do I invest in penny stocks or stocks on the Pink sheet?

I’m new to investing. I have a sharebuilder account. There are stocks I’ve been interested in but been unable to purchase because they are not offered from ShareBuilder. Specifically, NJMC and LLBO.

How can I invest in the penny stocks that aren’t offered by my broker?

John answers:

Don’t invest in penny stocks, that’s a waste of money. The chance of you hitting it big with a penny stock is the same as hitting a jackpot in a lottery. Invest in stocks of solid companies like Johnson&Johnson, CVS, Microsoft, Ebay, Google…

Make sure to diversify as well. You can use online broker like Scottrade.com or Etrade.com, etc… They give you lots of tools to do research and pick stocks that match your criteria and investment goals.

Good luck

Donna asks…

How do you know when and where to invest your money?

I’ve never invested money before and I’m wondering is there anything out there that can help me with it. Is there like a software which is connected to the stock market and is constantly updated that tells you when you should invest and what you should invest in?

John answers:

There is no sure thing in investing. You have to thouroughly research a company before buying shares, and there is no guarantee that the shares will rise. Even the experts cannot predict how the market will go. If you want to invest personally, try to pick good solid companies to buy, and then hold them for the long term, collecting the dividends. If you are not confident, invest in managed funds with a reputable managed fund company. It is sometimes helpful to get advise from a financial adviser

David asks…

How risky is it to invest in the stock market, in hoping to reap benefit?

I have a lump some of money that I want to invest into the stock market, but im a bit nervous about it. I want to invest and pretty much be sure im going to capitalize off of it, not loose it all and be vary upset.

John answers:

It depends entirely on your time horizon and your expectations. In general for investors investing for the long haul (10+ years) the stock market is almost always a winning investment, but it is volatile and its important to be aware of that and keep a level head. You will sometimes lose money in the short term, but remembering to see those blips are opportunities, or being cognizant of the big picture is important. Being a well read and informed investor is the key.

On the other hand investors who day trade or invest in penny stocks without being knowledgeable and not having access to sophisticated tools will lose money far more often then they win because they are essentially gambling. Investors who trade on emotion also fail because they tend to buy at the most inopportune times and sell into downturns. The Wall Street Journal has a great article on emotional investing today that’s an interesting read.
Http://online.wsj.com/article/SB10001424052970204313604574326223160094150.html

The key is to be informed, to stay informed, and if you can’t be then you should hire someone who is, whether that be by purchasing a mutual fund, or opening an account with a firm and using the tools and advice provided by firms like Schwab, Fidelity, and TDWaterhouse, or a full service financial planner.

Mary asks…

How do I start to invest in the stock exchange. Who should I invest with? I’m trying to get started?

I have a company in mind, but I don’t know what broker to use or how much to invest in a company.

John answers:

Many beginners start with mutual funds or one sort or another. They offer diversification that purchasing just one or a few stocks does not provide. However, they do not offer as much fun. But they are safer for beginning investors.

Before beginning you should consider making an investment in your education of investments. There are many books that have been published on the subject. Start with a basic book such as “Investing for Dummies” and “mutual funds for dummies”. Your library also most likely has a good selection.

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