Your Questions About Investing Tips

Michael asks…

I am interested in finding out more about the stocks market and investing in general. Any tips on what to read

John answers:

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

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.

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. 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. 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.

*** Do a quick search (at the top of the page) on ROTH IRAs. You’ll want to put some money in there. ***

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).

As you get more advanced, you might want a technical analysis book like Murphy’s Visual Investor or A Technical Analysis Course by Meyer.

If it’s 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.

Since you’re starting with a smaller amount of money, you’ll probably want to save up at least a few dollars so you don’t get eaten up by commissions (around $10-15/trade). When you have say $200 or so, you can put it into an ETF or into a growth stock. Meanwhile, you can always papertrade to practice (highly recommended).

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!

Daniel asks…

Investing – Tips on how to learn more?

Hello.

I’m currently enrolled as a student at a University in Norway. It’s my first out of five years. My first semester I got good grades without doing too much, and I definately had time to read some more. I was thinking of reading a book or three extra every semester, depending on the difficulty of my courses.

I’m quite interested in investing. Which books are recommended to learn the basics? Gotta start somewhere.

In advance, thanks!

John answers:

Followings are the best books written ever on investing,
* The Intelligent Investor- Ben Graham
* One Up on Wall Street- Peter Lynch
* The Essays of Warren Buffett- Professor Lawrence Cunningham
* Common Stocks and Uncommon Profits & Other Writings- Philip Fisher
* Security Analy- Professor Benjamin Graham
* How to be a Billionaire- Martin S. Fridson CFA
* The Interpretation of Financial Statements- Benjamin Graham
* 9 Steps to Financial Freedom- Suze Orman
* Use the News- Maria Bartiromo
* Financial Shenanigans: How to Detect Accounting Gimmicks and Fraud- Howard Schilit

Donald asks…

What are some easy ways and tips to being well off in life? investing? successful business plans?

John answers:

Work Very Hard and importently Work Very Smart. Save for investment. Study investing and make it your hobby. Max out on a 401K plan at your employment (at least up to the amount of any matching they do). Do an IRA, even if its not deductable in your case. The real value of these vehicles is that your money grows without being taxed until you begin withdrawals. The tax deduction is just the frosting on the cake. You will enjoy the miracle of compound interest. Also, put some money into investment securities, but as i said above, study this process. Mutual funds are probably the best vehicle for this, because you get professional management of your investments. Stocks vs Bonds – – Do what you’re comfortable with, but remember the owners of a business (stockholders) will usually make more than those who lend to the business (bondholders). I hope this will give help get you off to a good start.

Donna asks…

Please give me some useful tips for investing in mutual fund for the first time.is it a secure investment ?

John answers:

Use no load fund families. Don’t pay a broker unless you know what you are doing. Diversify your holdings. Go to Vanguard Funds, Fidelity, TIAA-CREFF websites and learn the basics. Mutual funds are usually a lot more secure than individual stocks because of diversification.

Laura asks…

What is your best investing tip?

For someone who has never invested, doesn’t have a lot of money and wants it to grow fast? I’m young, so I’ve got time, but I want to get a savings going quickly!

John answers:

Best investing tip…

Don’t invest a penny until ALL your debt is paid off. You have no business investing at 5%, 8% or even 12% if you’re in credit card debt at 20+%.

Sorry, it’s not glamourous, but do the math.

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