Your Questions About How To Invest In Stocks

Sharon asks…

Is it batter to invest in stocks or buy gold?

I don’t have very much time to think about how to invest my money and I was wondering if stocks really make profit or should I buy gold and platinum.Can somebody tell me what to choose?

John answers:

Stocks by far.

Laura asks…

Need to invest in stocks, don’t know how. Where do I start? I want to start online with e trade. What should I?

What should I be aware of when online investing? What magazine or sources are good indicators for investing? I do not want to pay a broker or middle man to handle my money. How do people directly invest in stocks and bypass middle man?

John answers:

The stock market today is a sucker game. Early in GW Bush’s first term there were a number of huge scandals that rocked Wall Street. The big brokerage houses were caught manipulating stock prices, doing insider trading, even recommending crap stocks to their customers and then betting against them. Bush didn’t seem to think any reform or re-regulation was necessary, so Wall Street hasn’t really gotten any better.

What you should do is get an account at a reputable no-commission outfit like Charles Schwab. Then ask for literature on mutual funds. There are all kinds of mutual funds, one for whatever kind of thing you want. Look at their records and see how they’ve done the last few years. Invest in a variety of them, to protect yourself. Commit to buying a few shares a week (or a month), and just to leave them alone for a year or two.

You can put some money each year in your 401K, and you get a tax break.

Steven asks…

How do I invest in stocks?

I dont want to know stuff like what stocks are the best or what rules or what to look for. I want to know how to actually invest…Like do I need to go to a bank or contact the company or something and tell them that I want to invest in them and they tell me what to do to invest in them, like what things to (ex: Join a certain bank).
PLEASE dont say google like dat guy down derr. No kidding idiot.

John answers:

You first need to choose a company or fund to invest in that suits you best. Nobody can answer that but you. You need to consider your financial situation, risk tolerance, time horizon, and other factors.

Once you do that, you need to find a place to invest through. There are countless ones – but you need to choose one that is not going to rip you off with sales commissions, expense ratios, 12b-1 fees, and so on. In short, forget all the big banks that you know and use.
If you want to just invest in one company, then set up an account at someplace like Scottrade or another place like it. You need to do your research on wherever you are considering. If you let some bank or company do a song and dance on you on why their place is the best place to put your money, you are a sucker ready for the taking.
Read some basic books to teach you the fundamentals. Three excellent reads are The Complete Idiot’s Guide to Investing, Investing for Dummies, and Stock Investing For Dummies.
If you want to get into the market but don’t know what stock to pick, consider an index fund. Instead of throwing all your eggs into one basket (one company), index funds can invest you in dozens, hundreds, or thousands of companies all at once and so there is less risk. This protects you if any one company or industry runs into trouble. For bonds, the returns are less, but more solid.
Pick a good discount company to invest through. Some of the best are Vanguard, T. Rowe Price, Fidelity, and Schwab. Check how much the company charges you as an expense ratio. A good one might charge you 0.2-0.8 %. If they charge more than 1% than go somewhere else. And if they charge any kind of 12b-1 fee, hold on to your wallet and RUN.
If you are thinking of retirement, consider a Roth IRA. Your money grows tax free, and when you retire you can withdraw it tax free as well.
For more information, try looking at
https://personal.vanguard.com/us/funds/vanguard/all?sort=name&sortorder=asc
and play with it, comparing funds with more or less risk.

Do some reading online such as
http://www.vanguard.com/us/insights for some important investing truths.

Mandy asks…

I want to invest in blue chip stocks of emerging market countries to get better return than indian markets,?

I am investing in stocks in India till now,but as you know, the stocks of countries which are developing faster than india also have huge potentiality of giving better returns,i have approximately Rs 10,00,000/ to invest
Some one please advise me how to do it and get best returns with least of risk.

John answers:

Look for stocks that are currenty priced not more than 10 times free cash flow. You can calculate this by getting the (earnings before income and taxes + depriciation – taxes)/common shares outstanding. Also, look for the ones with strong Return on Equity and high Operating Margins. Look for companies where its executives (preferably the CEO, CFO, COO) have big stockholdings. Do not buy a company just becasue technical analysis tells you to do so.

For more stock market terms and formulas to get those that i have mentinoed aboive, got : investopedia.com

good luck and happy investing!

Daniel asks…

how to invest in stocks for a newbie?

I am intrested in investing in stocks but I am not so sure how it all goes? Say I want to buy a stock where do I look for the listing on what stocks are available or not? How do I know which company to invest my money in to see if it is going to be a good investment or bad investment for me. If i do invest in a certain stock or more then one stock how do I know if it went up or down for that stock that i purchased? If I want to sell or buy my stock how do I do that? Are there any good stock brokers out there or any one with alot of experience dealing with the stock market please help me out.

John answers:

You need to first get an acct (DEMAT acct) for stock trading. Here you can buy and sell your stocks. Also you can easily check the prevailing rates for the stocks online. Start with an investement of small amount…once u are confident, go ahead and make a fortune!!

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