Your Questions About Investing Tips

Laura asks…

I’m interested to get into Investing, I Just Turned 18?

I’m 18 now and I’ve read up on some investing tips when getting into the Stock Market. Does anyone have any advice for a first-time investor as young as myself? I work part time at a grocery store and consider myself a financially smart person. I always have money in the bank and have never been in debt. I even have a debit and credit card and use them both wisely. I’m going to college next year and plan on keeping my job while there. I also want to invest in the stock market as well to have some more money flowing in. Can anyone give me some advice on some smart first time investments along with a suggested amount of money to start with?

Thank you

John answers:

First of all, the more you study and learn before entering the market the better off you will be.

Learn Fundamental Analysis and Technical Analysis. Read Market Strategy books and Study Economics. I know that sounds like a lot of big words but it really is very simple.

Practice. WallstreetSurvivor.com is a great place to learn and practice investing and its free. You can ask questions, discuss on forums and watch tutorials on how to trade. They will show you all sorts of different strategies. Also, you have to determine if you want to invest in small, medium, or large cap. Study the Exchanges and how they work.

Once you are ready, either find a broker or use an online brokerage. Make sure you have level 2 access to see the playing field. Don’t try to trade blind, that doesn’t work.

Get on Stock Forums and watch how stocks are being discussed, follow and watch momentum.

Hope this helps,

Richard asks…

I acquired 96K Im 18 want to invest it but dont know where to begin, thinking about gold any tips?

Its okay my grandma died and left me a share of her money!

John answers:

I don’t mean to be a hardnose, but the people denouncing gold are leaving out key points. For example, the person that said the one company that said Chase Global Digest ranked gold as the 2nd worst performing asset next to diamonds. It’s interesting that Chase Global digest said “28 years ago”. That’s because 28 years ago, gold reached it’s peak. For 22 years after that gold was in a brutal bear market. Yet, what the poster (and Chase Global) failed to tell you was that from 1971 to 1980 gold went from $35 per oz to $850 per oz – a return of 2,329%. Yet from 1966 to 1982, stocks were in one of the most brutal bear markets in history and for 16 years went no where and showed a loss of 22% during that time.

Yet, the poster also fails to mention that from 2000 to today, the Dow is up a whopping 120 points, a total return of 1% in the last 8 years. The S & P 500 is showing a LOSS of 15.4% during that same time period. Yet, from 2000 to now, gold went from $280/oz. To $886/oz as of today, a return of 216%. And when people say gold doesn’t pay a return/dividends, well, how many stocks pay dividends?

Also, people saying gold is trading near a 20 year peak are making a very erroneous analysis. In terms of “nominal prices”, yes, gold is above it’s all time high set in 1980, BUT you have to look at “real prices”. Adjusting for inflation, gold would have to trade somewhere north of $2500/oz. To equal it’s 1980 all time high. Silver would need to trade at $365/oz. Gold would have to go up another $1400 and silver over $340 to equal it’s 1980’s inflation adjusted high.

And what really baffles me is that gold has only been in a bull market for about 6 years now – after being in a secular bear market for 22 years, yet stocks have been in a bull market since 1982 (26 years) the longest bull run in history and no one even questions that. No asset goes up forever. All assets have cycles. In stocks, from 1949 to 1966 was a 17 year bull market, from 1966 to 1982 was a 16 year bear, and from 1982 to (really 2000) now has been a bull cycle.

Don’t get me wrong, I’m not anti-stocks. During the 80’s and 90’s, I was very pro stocks, but I also knew that stocks also run on a cycle and I saw that cycle ending in 2000. In 2002, precious metals bottomed (gold at $250/oz and silver at $4.50/oz).

Gold and commodities are reacting to the decline in the dollar and when the Fed lowered interest rates a few months ago, they telegraphed to the world that they were not going to defend the dollar. A devaluing dollar is inflationary. Think of it this way; from 2001 to 2008, crude oil is up 130% in Euro’s, 170% in Canadian Dollars, 135% in Australian Dollars – but up 305% in US Dollars. The world is losing faith in the dollar. The US Dollar index is now, just 2 points above it’s lowest level EVER.

I personally began buying up silver when it was in the $4/$5 an oz. Range. It’s now trading near $17 an oz. I’ve seen my investment more than triple in 6 years. I saw the cycles in stock ending in 2000 and I shifted my focus. Remember, all investments have cycles, the pros know that and the pros always make money because they know when cycles are completing and act accordingly.

Also, if people tell you that gold is in a bubble, I beg to differ. Their rationale for a bubble is that price shot up. That’s not the true definition of a bubble. When a bubble exists in an asset, there is no fundamental reason supporting such a rapid price rise and there is an overhang of supply and the general public loses any common sense and buys so they don’t miss out. During the equity bubble, within the last 5 years, people were buying just because they could. Companies that had no revenues, no sales, no product saw their stocks skyrocket. People bought just because the company had a “.com” in their name. Every other day there was a new IPO – stocks were greatly out of sync with normal valuation models – and we saw what happened. The housing market was the same – people bidding $80,000 above list, people buying houses sight unseen, people believing that prices would keep rising forever, builders building at a rate of 2 million units per year, when the population was growing at a rate of 1.1 million a year (a huge overhang of supply) – and we are witnessing what happened – everybody was becoming a flipper or real estate investor.

But do we see that same mania in gold? No, most people are still shunning gold. Also, there are fundamentals that are driving the price of gold. The fed is pumping the money supply at an unprecedented rate (along with the major central banks). There is no overhang of supply, as a matter of fact, gold demand is vastly outpacing supply by millions of ounces a year. Remember, gold (precious metals) are sensitive to inflation as are commodities in general. We have seen the price of crude oil more than double in a very short period of time. Are commodities volatile? Sure they are. But to apply that solely to commodities is erroneous. Look at anyone that had stock in Bear Sterns. I do trade commodities, but I’m a true trader, I have no market bias. I will short a asset in a heart beat if I see indications that prices will fall and I will go long just as quickly if I see the signs of a rally. Most people have a market bias.

I personally can not tell you what you should do. What I see is the Fed taking a path that is leading to the destruction of the dollar and I’m investing accordingly. What you MUST do is not listen to me or anyone else in this forum. You’re 18 and asking very wise questions, so you have the mental acumen to make good decisions. Most 18 year olds would blow it on a car and junk, but you’re thinking with a very mature mind. Pay attention to what the fed and government is doing relative to the fiscal policy of this country. Then compare various investments and see how they react to such policies and then make your decision on what to do.

I personally am not investing in stocks or any “paper” assets because those assets are cashed in in Dollars. Why would I want to get paid in a currency that’s about to fall of the edge of a cliff?

During the Weimar Hyperinflation, the people the did well and prospered were the ones that had gold and silver. I see the U.S. Heading down that same path.

Daniel asks…

I want to know from where i can get indian stock market tips on my yahoo massenger?

I am small businessman i m doing trading partime i invested around 1 lakh i want to know how to add stock mkt analysyst & trend analysyst in your massenger i already added stock panditji in my massenger i want to know any other sources would like to share tips on stock of nifty please help to know this i am new to mkt

John answers:

Hi! I made Rs.50000 by following the trading tips given through yahoo messenger and also through SMS provided by http://stockmarkettips.biz/

James asks…

Is it a good time to buy a Sony stock? If so, from where?

I am interested in investing money and I think this would probably a good place to start. Can you also provide me some investing tips?

John answers:

I really see nothing exciting about this stock that is telling me to buy

Ruth asks…

is it worth investing in a biocube to?

set up salt water tank??? by the time I buy the accessories for a regular tank and everything is hanging on the outside??? also, any tips for a salt water tank as a new hobbist?? Can I use the fresh water carbon filter in a salt water tank?

John answers:

It really depends on what you are trying to achieve. If I were to set up a nano, I would remove all of the stock mechanical filters, and plumb in a sump/refugium. It makes your parameters more stable, and creates less maintenance. There may be other mods that you would want to make to get the nano where you want it too (say to the lights for example). I really don’t care for most of them out of the box though. Carbon can be used in both freshwater and saltwater aquariums.

If you want to set up a saltwater tank, I suggest doing a lot of research first. Check out a good on-line forum like www.reefcentral.com or forum.marinedepot.com to help get you started. You may also want to check out a good book or two. Robert Fenner, Anthony Calfo, and Julian Sprung all have published great books about the saltwater hobby.

Regards

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