Your Questions About How To Pick Stocks

Steven asks…

I just started a 401K and my first statement — I loose money. Is it possible to loose more than what you gain

This might seem obvious to you but I have not idea how to pick companie sfrom the list.
What do you recommend?

I wish schools would teach things like that instead of wasting time on classes that you would never need the knowledge for anything useful.

John answers:

I wish schools would teach this too. The best answer I can give is out of the bible and it isn’t a direct quote but wise king Solomom said to put your money into 7 types investments or even 8 because you can never know what tomorrow will bring.
So go to your 401k and spread your investments around, put some in bonds some in large, medium and small cap stock mutual funds some in foreign mutual funds and some in a simple money market account. Some of these are higher risk but have the best potential to make you a good return and some are medium to very conservative but if the market completely tanks they will either continue to grow slowly or at least not loose their value.

Joseph asks…

What website can tell me about how to get started in investing?

I’m young, I’m extremely ambitious, and I’m starting to want to know how to be an investor. What websites have good information about how to get started in investing, trading, etc.?

John answers:

Congratulations on getting started. It’ll help you more than you know!

Your first dollars should be spent on getting educated on investing. You don’t have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it’ll help you! So let’s start there.

You ask a very broad question, so be prepared for a pretty long answer. Just take it in chunks!

How to invest depends on what you already know. We’ll assume that you’re beginning since you say you’re new to this!

A good primer is How to Make Money in Stocks by William O’Neil. You can get it cheap just about anywhere. It’s widely available new or used.

Another good one is one of Jim Cramer’s books like Real Money (he’s got a few).

But books will only get you so far. At some point, you’ll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com

For free, you can start by visiting thestreet.com and investopedia.com. That’ll get you a pretty good primer so at least you’ll understand what the markets are and what a stock is, etc.

If you get a chance, watch Mad Money on CNBC. Don’t trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself.

Next, subscribe to something like Investorsbusiness daily or something like that that can help you identify good stocks.

Once you understand stocks, go to 888options.com. It’s a website that’ll help you understand options (what they do, how they work, etc). You don’t need to trade them, but the more you know, the more you’ll see how options can really be the safest way to invest (once you’re educated).

For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter

I know that’s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in.

As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling.

You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc). And yes, you can definitely deal easily online.

Start slow, then as you figure things out, you can buy more shares.

Congrats again on getting started. If you have any questions, please let me know.

Hope this helps!

Mary asks…

Who gives the best advice when picking stocks?

With the thousands of expert crystal ball experts out there, what website, magazine columnists, or whatever, gives the best advice when it comes to picking stocks. Basically, who’s the Oprah Winfrey of the financial markets – when this person makes their picks, the people who invest make good money.
I read Fortune, Forbes, Inc, Smart Money, Business Week, and many others, but would love to explore others to see who picks the best. Thanks in advance.

John answers:

Morningstar has consistantly given me some fantastic picks. They were also the first to get on the MLP train TPP, ETP. SUG, BPL

Here’s some recent Morningstar picks and my gains:

TMX 90%
LNG 43%
APOL 51%
TNE 46%

Maria asks…

Can you help me pick stocks for my fantasy league?

I’m in a fantasy stock market league with my friends, and i need help picking stocks. The league is four months long, so i’m looking for help on what stocks you think could make me the most money in that amount of time. Best advice get’s 10 pts!!!!

John answers:

Okay…the next few months start the ” driving season”..look at three little refiners…FTO, WNR and ALJ ( for an idea of what I’m saying look at the chart for these three months last year)
Also, just booming lately are agricultural stocks…MOS, AGU, POT, TRA, DE, AG, CF..or ” Chinese ag”: SEED, FEED, COIN
Last on the list…shipping: DRYS, TBSI, GNK, ( that TBSI goes on runs of 15 or 30 dollars sometimes…look for it to be below 31/32…then get in!

William asks…

What’s the stock picking website that let’s you charge a fee to invest people’s money for them?

What’s the website that lets you pick stocks and people can piggyback on your portfolio for a fee? Saw it in Kiplinger or Money Magazine recently but can’t remember what it was called.

John answers:

Scottrade.com

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