Your Questions About Money Making Stocks

Chris asks…

How to make money in the stock market?

I need extra money and I feel like stocks are the way to go please give advice

John answers:

Never being in the stock market it is impossible to feel that stocks are the way to go,
If you “feel” stocks are the way to go, you should then know how to make money in the market.

Before you spend $0.01 in any investment you must know what you’re doing, why you’re doing, how to do it and the rules that govern what you’re trying to do. Having feelings is not reality, you must have an understanding of the market, the products traded in the market and how the market works.

Unless you fully understand where you’re trying to go, you will never make money in the market, it is not as easy as it looks. I know, Ive been in the market for over 60 years and worked on wall street for over 40 years.

Susan asks…

Can anyone help me in some money making ideas?

Can anyone help me in some money making ideas?
im 21 years old..studyin in a local college in malaysia..i need some money making idea…but i dont have much cash to start off with
please… maybe any plans to consider as well

John answers:

You could make money by doing things like car washes or going out to stores and restaurants and apply just until you get a good amount of money to strat you off then you could invest some of it in the stock market

David asks…

Can i make money from stocks?

Online

John answers:

It depends if you know what you’re doing, why you’re doing it, how to do it and the rules governing what you’re doing Yes you can make money from stocks.

BUT, if you do not understand the market and the products traded in the market you’ll never make money.

John asks…

I’m 15 and could somebody please explain what stocks are and how you make money investing off them ?

everyone i know says investing is the way to go if you want to make money but i don’t know what is actually is what does it mean investing or buying stocks ?

John answers:

A stock is an ownership share in a corporation. Each of these shares denotes a part ownership for a shareowner, stockholder, or shareholder, of that company.

When a company releases an IPO (initial public offering, when a company offers shares to the public), investors can purchase these shares and will be part of owning the company.

There are two types of investors, value and growth investors.

Growth Investors:
Look for smaller companies with high growth potential.
Do not look for companies that pay dividends (a portion of profit paid to the shareholder); they would rather see that cash kept and used productively by the company.
Look for high P/E ratios, a measure of stock price compared to net earnings per share.
Have speculation; generally more risky.

Value Investors:
Look for larger, established companies with long history of stable earnings, good reputation.
Look for dividends!
Look to buy shares that are currently selling at a price below their intrinsic value.
Look for low P/E ratios.
Generally less risky, “buy and hold” mentality of long-term investing.
Like to invest in large-cap stocks (Facebook, Apple, etc.)

You make capital gains (money) by purchasing stocks, and if the demand for the stock(s) you invest in goes up, so does the price. Therefore the market value of your stock(s) go up, and you can sell this, therefore liquidating your assets.

For example, if you purchased a stock from Tesla Motors on January 13th, 2013 for $22.79. You decide to sell it today, January 16th, 2014 for $170.97. The capital gain is made from $170.97 minus $22.79, = $148.18 minus transaction fees from your stock broker.

Another way of making capital gains is if you short-sell.
It is the practice of selling shares of stock that have been borrowed from a third party in exchange for a fee, with the intent of buying these shares back on a future date to return the lender.

Short-sellers believe that the market price of a stock is going to drop and so they borrow stock and sell it now at the current price before a pre-arranged future date to return shares to the lender.
Short-sellers make a profit if they speculate correctly and the stock price falls, but they lose money if the stock price increases because they are forced to buy back these shares at a higher price so they can return them to the lender.
A short seller’s profit is the difference between what they sell the borrowed shares for and what they are forced to pay in the market to buy back these shares for the lender; minus fees, commissions paid to the broker/lender.

Carol asks…

How did people make money from microsoft stock?

i looked at the price of their stock when it came out in 1986 and it was at $28 at the end of the day. now the stock is at $32 a share, how did people make such a killing? i used to think it started off low and went high but now im confused, dividends arent enough either so explain please.

John answers:

Do some research on Msft’s past stock performance. Back in the 90’s their stock split over and over and over. People went from owning 200 shares to 400 to 800 to 1600..etc.

Lets say a person owned 50 shares @$25.00ps for a value was $1250.00. The stock split, now the person owned 100 shares but @$12.50ps still with a $1250.00 value. The stock price climbed back to $25.00ps and the person still owned their 100 shares but now at a $2500.00 value. The stock split again so now the person owns 200 shares at $12.50ps for a $2500.00 value. The stock now climbs to $40.00ps putting the 200 shares at a $8000.00 value. You can see where this is going.

People made money hand over fist on the stock splits alone without purchasing additional shares. Those days are long behind us.

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