Your Questions About Investing Tips

John asks…

Do you know any body who got rich by investing in stocks ? what tips or recommendations they gave you ?

John answers:

Buy Monsanto.

Sandra asks…

TIPS FOR WHEN INVESTING IN THE STOCK MARKET?

Hey, I really want to invest my 500 pounds into a business to make a profit but I don’t know much about the stock market and the ins and outs, can somebody fill me in and what to invest on and when? And any other secrets? Thank you very much guys. Daniel.

John answers:

Remember that you can make money and you can lose money. You’re hoping that by choosing a company with a good business model that hasn’t taken on too much risk, that the probability of a return will be higher and or the return will be greater but you still have to consider the possibility of a loss.

If you model the investment as a random act, say the flipping of a coin where if you win, you won twice your wager but if you lost, you lost your wager then you would have an opportunity that was in your favor, you would expect to gain $1.50 for every $1 lost. If you risk nothing by wagering nothing, you will gain nothing, the more you wager, the more you should gain but if you wager everything you have, you will lose everything with the first loss, so at some point, the increased risk is not warranted by the increase gain. With a coin toss, this can be calculated, any wager above 50% of the portfolio will lose money, a wager of 50% will break even, and a wager of 25% is the optimal for portfolio growth. Stocks aren’t so easy to figure out but what you know is that you shouldn’t put everything on one investment so long as there’s a chance the investment could lose and there’s always that chance.

Now if you could wager on two similar simultaneous coin tosses that are independent of each other, then the optimal would be 21% per toss which is a total of 42% of your portfolio. So with diversification, you can invest a greater proportion of your portfolio without exceeding reasonable risk.

It takes accurate estimates to minimize diversification and it’s safer to be over diversified than under. So long as there is a risk of loss on all investments then some portion of the portfolio should be kept relatively secure such as in bonds ( note that continual contributions from your paycheck is like holding a bond ).

Michael asks…

Young Teen Investing Tips?

I am looking into gold and silver coin investing. Could you give me tips for a beginner.

John answers:

This guide is for the novice or the seasoned investor, it should help you out…

Ruth asks…

Investing in Stocks, Any Tips?

what are some good stocks that are under 10 dollars a share. Also, stocks that pay good dividends. Any tips you have on stocks are appreciated.

John answers:

Tips? Just some tried and true fundamentals:

Have a goal – know what you are investing for, and choose the right investment to achieve it.

Choose the right amount of risk – neither too cautious nor too reckless.

Do your research – choose what’s right for you – not someone else, especially a sales rep.

Be diversified and allocate your investments properly.

Thank long term and avoid the Big Money Fast hype.

Don’t invest according to emotion – especially fear/panic.

Don’t just look at the investment – consider fees/taxes/commissions around it.

David asks…

Investing 5k-10k Tips?

I have 10k saved up & I probably wont be getting a check this size for a long time so I want to make the best of It. I’m not sure If I want to go and put my whole 10k In though because I want to have money incase Of something happening so I was thinking of just investing 5k and save the other 5k In the bank or should I just go all out? I hear gold investing & Walmart Investing Is the best way to go what are your thoughts? If I decide to invest In something how would I go about doing it?

John answers:

Yes you should put aside a sum of money in case you need it. The remainder you can use for investment.

As you are new to investment I suggest that you try to learn as much as possible even before you invest a single cent. There are lots of investment opportunities out there. But you will need to know what you are doing. I agree with one of the earlier post that says don’t ask for tips from forums and the internet. You will have to do the research yourself. So start investing in yourself first with an education in investment. You can surf the Internet to gain a basic understanding of investment and then move onto attending courses or seminars. Learning about investment is never ending so don’t stop learning.

Let me end with this proverb: Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. Good luck.

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