Your Questions About Investing Tips

Richard asks…

what is the first thing i should know about investing in stock market?

this is my first time ever investing and i need tips on how to get money

John answers:

There are four major items that one needs to properly and sucessfully invest and/or trade securities

1 – A written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself.
2 – Sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you trade/invest.
3 – A written money management program in place.
4 – A full and complete understanding of the rules & regulations of the industry.

Here are some books you could read
The first book you should read is Rich Dad Poor Dad by Robert Kiyosaki

Then try some of these
What Works on Wall Street by James O’Shaunessey
Beating the Street by Peter Lynch
One Up on Wall Street by Peter Lynch
The Warren Buffett Way by Robert Hagstrom
How to Make Money in Stocks” by William O’Neil

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why. This site has some basic information for beginners. If any site offers free information, take it.

Other website that can provide instructions and help with procedures and terminology are
Investopedia – http://www.investopedia.com/ Stock Charts – http://stockcharts.com/
http://www.investorshub.com/ http://www.1source4stocks.com/

Visit some of the more professional websites like Zacks – http://www.zacks.com/
Smart Money – http://www.smartmoney.com/ Schaeffer’s – http://www.schaeffersresearch.com/
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it..

The last thing you need to do is to open a brokerage account

Don’t take investment/trading advice from anyone who is not investing and/or trading

And don’t let anyone tell you not to invest.

Good luck, study hard and you’ll invest even better

Mary asks…

How to start investing exactly?

whenever i google ‘how to start investing‘, what usually comes out are kinda trivial information such tips and suggestions and basic lectures about what are stocks, mutual funds and bonds. these, i know are helpful of course, but what i’m looking for is are specific steps to start investing.. some information that I’m looking for are
where do i go to start investing?
who do i talk to?
how do i get a broker?
is there an age limit to be an investor?
where do i go to for these information?

John answers:

To Start Investing
It takes a long time to learn the stock market and it would help if you read some books from your library and information online. Before you start investing in the market the first thing you need to decide is what risk level you want to take. CDs backed up by the government has about 3-4% annual return for the long term with a low risk. Bonds or Bonds Funds has about 5-7% annual return for the long term with a medium risk. Stocks or Stock Mutual Funds has about 8-10% annual return for the long term with a high risk and are more volatile than Bonds. A person could make more than 10% annual return with the right investment. Usually the more risk you take, the more return you will have, but not always. To see the Risk vs Return go to my photo: http://i1142.photobucket.com/albums/n620/Chief-1/RiskvsReturn.jpg The stock market is basally made up of stocks and bonds. Investment managers pick a group of stocks to make a mutual fund or a group of bonds to make a bond fund. They even put a mixture of stocks and bonds together and call it a Growth & Income Fund.

1- MUTUAL FUNDS: Mutual funds have a group of stocks (could be around 100+) invested in different sectors, and manage by a professional. Managers have lots of schooling for investing in stocks, around 8 years. So I think managers can pick stocks better than I can. You can make a buy or sell order anytime of the day for mutual funds shares but it will not go in affect until the close of the day. There are lots of different kinds of mutual funds that does not charge any fees to buy it’s shares and they are called Noload Funds. There are also some funds called Load Funds that charge about 5% of your investment. Most funds has trading restriction and you may not be able to trade more than 4 times a year. That’s because it makes it hard for the fund to make a good return if there is to much trading in the fund, causing the fund manager to make more buys and sells and keep more cash on hand. Mutual funds are meant for long term investors.
2- STOCKS: Stocks is more volatile than funds unless you spread you money in about ten different sectors and know witch sector will do best. Stock trading restriction is only a few days, not like mutual funds. If you own stocks, you will need to keep up with all the company’s business so you don’t get stuck with a bad stock. That could take a lots of time. If a person buys just a few stocks he probably is hoping to make a bigger return but he may be taking more risk. If that’s the case, look at the leverage ETFs.
3- ETFs (Exchange Traded Funds): ETFs are like a mutual fund but trades like a stock and that is the main differences between ETFs and stocks and mutual funds. There are some ETFs that represents Index’s. An Index is like S&P or DOW. Index’s operate just like a mutual fund with a group of stocks in deferent sectors, manage by professionals. You can’t buy Index’s because they are not for sell. A company owns them. But you can buy a mutual funds or an ETF that has the same stocks as the Index they represent. There are a lots of different kinds of ETFs for someone to choose from. Some have 1x leverage, some have 2x leverage for aggressive investors, and some has 3x leverage for more aggressive investors. There are some that represent almost every kind of sector.

To buy stocks or funds, you need a broker account. You can open an account online and it is free. You can find several good brokers that charge $8.00 and under per stock trade and no fee on Noload Funds. Most broker websites have good research tools. Some popular broker websites are Fidelity, TD Ameritrade, E-trade, Scottrade and others. I think you need a min. Of $500 (some sites $2,500) to open a broker account and need to be at lease 18 years old. If you not 18, you might could get your Dad to open an account for you.

If you want more info, click my picture and read About Me.

Laura asks…

Does anyone have any tips on how to invest in Binary Options?

Have you had any luck with these investments? What should I look for?

John answers:

First off, binary options are highly related to regular options. The simplest expression of the relationship between the two is that a binary option is the (mathematical) derivative of a plain vanilla call so buying a binary option is buying delta of a vanilla call. That means you should never be just trading binary options – you should be trading either vanilla options or binaries and since vanilla options are more liquid, you should almost always be trading vanilla options instead.

Since you probably have no idea what that last paragraph means, it means you shouldn’t be trading these at all. Start with vanilla options. When you get good at those, add binaries. Binaries are easier to explain to people (which is why so many idiots trade them) but they are harder to analyze because the greeks all just go one (mathematical) derivative notch higher, ie. Price for binary = delta for vanilla, delta for binary = gamma for vanilla, etc..

Anyway, the notion that binary options are “investments” makes me chuckle.

Lisa asks…

Hi, I am 20 years old and looking to start investing. Anyone have any suggestions or tips?

I should be making 675 a week (pre-tax) and I was thinking that I would divide my earnings into a Roth IRA and a Stock Index Mutual Fund. I was wondering how this idea sounded to investment savvy individuals? Would you recommend me putting more in the Roth, or Mutual fund? I was also considering investing in some agressive bonds.

Furthermore, how would you recommend getting started setting up an account for any of the three aforementioned items? I am very new to the investing game, so any information on how to get started would be extremely helpful.

If you are bored, and I mean really bored, and want to make a schedule for how you think I should divide my savings, feel free to do so. I should be getting 675 a week (pre-tax) and I would like to save 100 (after-tax) and I should only be making the 7500 or so this summer for my annual total.

Thanks in advance anyone, if you could suggest any websites or books to help my situation, I would be grateful.

John answers:

Hi friend , you just log onto http://www.way2victory.com there you can get lot of information on life insurance, mutual funds ,etc., i think it will surely help you

David asks…

What are some good books to read about investing?

I’m 19 and have about 20-25k to invest and I would also like to do this for a living so any type of knowledge would help. Or just any tips you might have.

John answers:

I have read “Investing for Dummies”, and agree that it is a very good book.

Another excellent book is Stan Weinstein’s “Secrets for Profiting in Bull or Bear Markets”. I think this book does an excellent job in indentifying trends and stages of a stock.

You must decide on your investing time frame. I don’t recommend day trading, but position trading and swing trading are far less stressful and probably just as profitable.

I do recommend that you go ahead and open an account, but just don’t begin trading yet. If you open an account with Scottrade, you can get free access to their Scottrade Elite platform, which provides some pretty good charting tools.

Regardless of what broker you use, you need to begin virtual trading before you begin trading live. Virtual trading acts just like a regular trading account, except the money is not real. You execute buy and sell orders, and can track gains and losses. Scottrade Elite has virtual trading, as do some of the other account providers. With $25K, you should be able to get access to some pretty decent trading tools.

Regardless of which trading style you choose, you have to follow good money management rules. – – You need to own multiple stocks, so your account isn’t wiped out by one bad stock.
– You need to use stop losses to minimize your losses.
– You should not risk any more than 10% of your portfolio on any one stock
– In general, let your winners run and cut your losses short
– You are playing against professionals with far more knowledge and research capabilities than you have. Keep that in mind when you see big volume move the price one way or another.
– The main advantage you have is that the big money professionals have to move a lot of money in or out of a stock. That takes time, otherwise they can sink the stock, which cuts into their profits. You have the advantage of being able to get in and out of the market in a moments notice.

The first thing you have to do is establish the trend of the market. Right now, the market is somewhat indeterminate with a down-side bias. The uptrend since March 2009 has been broken. It’s too early to call it as clearly a downtrend, so it could turn into a sideways consolidation. In my opinion, there is a lot of risk in the market right now.

Learn to play the short side.

For a beginner, I recommend becoming comfortable trading ETFs before you move to individual stocks.

But above all, know the trend and know yourself. You must learn to go against the grain, relying only on what the charts tell you.

Powered by Yahoo! Answers

This entry was posted in Uncategorized. Bookmark the permalink.