Your Questions About How To Invest In Stocks

Helen asks…

Do you think investing in stock is good or bad?

I really want to invest in stock because i want to earn some money but i might lose some at the same time. What do you think i should do?

John answers:

Unless you really know what you’re doing and have some money that you can afford to lose, you should avoid the stock market. Put the money somewhere safe, like an FDIC insured CD.

Paul asks…

Good companies to invest stocks in at a young age?

Hello! I am 15 years old. I would like to invest in stocks. My math teacher told me that he has been investing in a company since he was my age, and by the time he’s 45 he will have at least half a million dollars. Now this idea is very interesting to me, I would like to invest in stocks that pay a good dividend. I was wondering if someone could help me out with by giving me stocks that are high and most likely will be high in the next few years, I would appreciate it. How would I do this ? Would i go to the bank and tell them I would like to invest in a certain stock? Thank you very much for your help!

John answers:

Im taking my MO and COP into retirement. Good luck to those folks who buy into those mutual funds

Lisa asks…

How much it is possible to earn on investing in stocks?

How much APR it is possible to earn on investing in stocks approximately?

John answers:

If you invest in diversified stocks over the next 40 years, you will probably average around 10%. However, the results will vary dramatically from year to year. Some real good years you may be up 40%, in a real bad year you may be down 30%. The 10% figure is only a long term average.

The stock market has averaged 9.9% since 1926. See the link below.

Betty asks…

How long does it take to get money when investing in stock?

Like when you invest in stock online…how does it work, like when your stock sells, when do you get your cash?

John answers:

To buy and sell stocks, you need to open an online account at a brokerage and deposit some of your money there. And then it takes up to 3 business days to settle the money in your account, each time you buy and sell stocks.

But if you open a margin account where you can borrow money from your brokerage. Then you can use borrowed money from your brokerage to continue buying and selling stocks, while you are waiting for your previous transactions to be settled.

And the thing to keep in mind is that buying and selling stocks isn’t free. You have to pay a fee to your brokerage every time you buy and sell stocks. And depending on the brokerage, you might have to pay a fee for taking cash out of your account too.

Which means that you need to trade stocks with a substantial amount of money. Or else the fees from your brokerage might be greater than your profits. And you can loose money this way.

Michael asks…

Is investing in stocks just gambling?

I have to repeat my question as I didnt get any good answer.

An investor in stocks doesnt have any real, practical stakes in the company. He cannot claim a divident, and his only profitability lies in the increase in the price of the stock, which again depends not on any stakes in the company, rather only the market sentiment. Moreover stock prices doesnt really reflect the company fundamentals, nor your money on stocks benefit the company either except in IPO, Rights issues etc. This might explain the wild swings in stock market without any rationale unlike in commodity prices. So is it that investing in stocks just a gambling?

I am not talking about the risks here. I mean practically what value a share has, except what the market sentiment, another word for gullibility of masses, thinks it has? This is different from say the value of gold, which is used for ornaments and like. Also what benefit a company get if you dont buy stocks from it directly but rather from an existing buyer?

Some may argue shares have book value which is ascertainable. BUt isnt this only of theoretical significance if you are not guaranteed that at any time? Doesnt the share price go even below book value during bad times? This shows that it has no intrinsic value, unlike gold which can at least be used as paper weight.

My question is what ethical basis or productive function does the stock exchanging deliver? Some body’s windfall is simply another body’s pension fund.

John answers:

Investing all your money on a single stock or day trading on many stocks is gambling. However, if you spread out your risk over time and across low-risk as well as high-risk shares, you are very likely to see a good return on your investment. You can’t say it’s risk free, but your risk is pretty low for the potential return.

The stock market provides a very open, egalitarian way for potential investors to find investments, as well as for companies to find capitalization – not only initially; most companies hold some stock in reserve and sell them in tough times to raise funds. Marketplaces are an essential component of Capitalism, as it requires open access to the markets in order to work.

In addition, by tracking trends in the market economists are able to make certain assertions about the relative health of the economy.

However, the draw back is that people get greedy and often make poor investments meant more to get rich quick than to establish a stable source of investment income. Some get rich, but many more lose their shirts over time.

It could be said, though, that this get rich quick thinking permeates all businesses in the US anyway. How many companies today would trade quick growth for a much more gradual albeit long term growth? How many individuals, too?

Powered by Yahoo! Answers

This entry was posted in Uncategorized. Bookmark the permalink.