Your Questions About Money Making Stocks

Donna asks…

how does a person make money from buying stocks ?

John answers:

You open an account with a broker like Scottrade. Then you buy stocks. If the stock prices goes up, you make money. If the stock prices go down, you lose money. Depending on when you sell, you may make or lose money.

Susan asks…

Investing money in the stock market?

If I invest $10,000 in Google and $10,000 in gold. In 3 months will I make a lot of money?

John answers:

Google is ridiculously expensive for an average person… To make money in stocks it’s not the amount of money, nor the stock its self that matters as much as volume of shares you own… $10,000 won’t buy you many shares in google, but if you invested in a $10.00 stock you’d be able to buy 1000 shares.

Buy a cheaper stock that is a well known company, that pays dividends and that is in a lower standard deviation. For example, if say McDonald’s has been trading at $100.00 for a while and then (for whatever reason) drops to $80.00 a share, that would be a good buying opportunity depending on the situation… Like a lawsuit of something….eventually McDonald’s would recover from that once all the commotion is settled, and shares would have a greater potential for growth in the long run.

For example look at historical charts of practically any stock… In 2008 when the crash happened all the stocks were dirt cheap compared to before the crash… And in almost every case, the companies have rebounded nicely, once all that “crisis” was settled. “Be opportunistic, when others are fearful”

I would look in to stocks that have had a hit lately… Although, indeed as with any investment there are greater risks involved when you buy a stock after it has crashed… But you must research in to the company… To see how much debt it has, it’s profit margins, it’s revenue… Has sales been down lately? Could they go back up in the future? Is it likely for the company to recover, or is there too many competitors? Like in the case of BlackBerry inc…. There isn’t a very good chance of recovery.
After research and analysis, then you can make a carefully contrived and calculated decision.

As with painting….90% of the work is preparation. Stocks are no different. Just like you wouldn’t start painting a room without first considering what color would complement the room the best, and all the rest…You can’t jump in to something to quickly, because disaster is much more likely.

I would say, investing is as risky as the investor makes it… If you are educated on the subject, it’s a good way to accumulate wealth…but it’s not perfect… You may encounter losses.

Education is key… I’m sure you’ve heard it your whole life.. Investing is risky…but then again, you look at the majority of people and they know nothing about investing, or stocks at all…How can you come to any conclusions without knowing anything about something….like if I were to tell you driving is risky…but then I knew nothing about it, and I didn’t teach you anything about it…. Of course it would be risky…. You wouldn’t know what you were doing. I’m not saying it isn’t risky…all I’m saying is it’s possible investing isn’t as bad as people portray it as, especially when people don’t even understand that you’re buying ownership in a company…it’s misunderstood, misinterpreted, and most people are ignorant to the subject… You must take the Liberty of learning about it yourself…

Like the founding fathers of the United States said “The price of Freedom is eternal diligence.”

As for Gold, that’s a good investment during times of prosperity when people aren’t worried about the economy…because that’s when gold is the cheapest…everyone is too busy buying cars, T.Vs and all kinds of other crap…but because gold is considered a safe haven in times of austerity, gold shoots up as people become fearful, they sell off their other assets, like stocks or bonds they might hold and move it in to gold…if you were smart and bought back when the economy was good and everyone was happy and indolent towards the economy gold was at $360/oz. In 2003, $680/oz in 2006 (2 years before the crash), $1220/oz by the end of 2009, and peaked at $1923.70/oz in sept. Of 2011….As you can see, gold is a good investment over the long-term, and especially good in times of prosperity when it is cheapest… 2003-2006 were considerably prosperous economic years.

Some say it’s better to buy physical gold, others advoate gold stocks… And ABX (Barrick Gold corporation) is low right now. You could consider it.

Lisa asks…

Does a company make any money when their stock goes up in price?

Or is it just the people who bought the stock that profit?

John answers:

No, when the stock goes up the company does not make money. Just the people who bought it will make money. Managers with stock options can also make money.
When a company goes into share repurchase (and buys back its stocks from shareholders), it cannot make money out of it. It would be nonsense since the company has insider information. It cant speculate on its own stocks.
Rather, the stocks bought would have to be re-issued (the process is much complicated). They will not be sold directly in the market so that the company cant speculate.

Maria asks…

How do you make money through the stock market?

Do you get paid though only dividend or are there other ways to make money

John answers:

There are several ways to make money. You’ve stated one. The most common way is to buy shares of a particular stock, ETF, or mutual fund and sell them later after they have gone up in price. You can also lose money here if you sell it later if the price has gone down so the motto is, “Buy low, sell high.”

You can also short a stock to make money but don’t worry about that right now.

John asks…

1. How to make money with penny stocks?

Is it really possible to make money with penny stocks.Can you refer me to a decent website that will show me how?

John answers:

Four ways:
1)Fundamental Analysis
2)Undervalued Stocks
3)Technical Analysis
4)Promotional Stocks

Read the detail here:
4 Ways to Pick Winning Penny Stock and Make Money

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