Your Questions About How To Pick Stocks

Sandra asks…

Is it better to buy and hold stocks or sell when I make a profit?

I have been doing well picking stocks but dont know if I should be holding the stocks that go up or selling them when I make a profit.

John answers:

Your question is a good one and I can’t give you the answer, but what I can do is help you make the decision yourself.

First, do you spend a lot of time watching the market and your stocks? If so then you could potentially call yourself a trader, in which case you can sell when you make a profit and then pick the stock back up on a dip.

On the other hand, if you happen to watch your stocks once a week just to see how they’re doing, then your of the buy and hold category.

The second thing you need to ask yourself is how are you choosing which stocks you buy?

If your using fundamentals such as debt ratios, P/E ratios and other long term measures, the you are definitely in the buy and hold category.

If you use charting techniques and measures of volatility, and stochastic charts, then you typically are a short term investor who takes profits and buys on dips.

You need to decide for yourself how confident you are in the stocks which you buy. The more confident you are the longer you should be willing to hold the stock.

I suggest that every time you get into a long position (buy a stock) you look at the price history (charts) of the stock to determine where you think would be a reasonable place to sell.

Maria asks…

Where i learn about stocks and shares?

Where can i learn about stocks and costs and how to invest.
And also Is there sites where i can just pick stock and learn?

John answers:

I highly recommend investopedia. It’s a great resource of information about investing concepts and terms, It also has a stock simulator which allows you to create your own portfolio (with fake money) to see how it performs on the actual market.

James asks…

Which stocks are the best stocks to pick?

For Government class, we’re doing a stock market game. We pick two stocks to invest and by the end of the year, whoever has the most money wins. So, your suggestions, plus ticker symbols if possible. Thanks.

John answers:

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.

Donald asks…

What is the best informational forum concerning stocks and good ideas about investing?

I am looking to invest in the near future and always like to hear what others have to say (their personal stock picks) upcoming stock picks ect…i currently check motley fool but was looking for something better!! any suggestions would be great thanks!

John answers:

I’ve subscribed to Investors Business Daily (of IBD) you can read their paper on your laptop, or get the print version.

Yes, it does cost money but theres a few alternatives, you can just get the monday special, or other forms that are cheaper, but can still get all the stocklists they publish.

A little information:

The founder (William J. O’neil) of the paper did a study in the 70’s of the greatest performing stocks that date way back, and found certian charecteristics that each stock had before they made really big advances, the study’s based on supply/demand laws, and sentiment, NOT personal opinions… A cousin of mine who’s actually worked on wall street recommended this to me.

*You can go to their website and still click on and read some of the articles posted on the site, etc, that you won’t need a membership for!

Good luck

Donna asks…

Is it ok to invest with a friend by forming a general partnership and getting a partnership account together?

We signed a partnership agreement and plan on picking stocks together.

John answers:

I wouldn’t recommend it. You are liable for any decisions he/she makes. Like a proprietorship you have unlimited liability. Partnerships are one of the easiest ways to ruin a friendship.

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