Your Questions About Money Making Stocks

Ruth asks…

What makes people keep making money on stocks in a Bearish/Falling Stock Market?

What techniques do they use to make profit even in a falling market ?

As a matter of fact, a Bearish market is a profitable market to some in terms of making money through such rough market times. How does Hedge Fund work and how does it impact the economy as it is always under the SEC radar. What must a new investor know about the market? … Give me your insight. Thanks.

John answers:

Some investment markets make it possible for you to make money when the markets are falling, such as Financial spread betting, CFDs, Options…etc

Steven asks…

Does anyone know anything about penny stocks making big money?

John answers:

Seriously?…. I assume (hope) you’re joking. Penny stocks are a great way for an amateur to lose most to all of their money.

Sandra asks…

If I am making money (in stocks), does that mean someone else is losing money?

I watch my stocks go up and I was wondering if I am making money does that mean someone else in the world is lost money?
Joey, the problem with that conclusion is that you are assuming your buy of 100 shares at $0.41 is going to show up as the close and therefore ACTUALLY show up for the rest of the world to see, changing the valuation of the company. That is very rare for that to happen, unless you’re trading a stock with a near zero moving volume.

Also for everyone else, yes, as long as the stock keeps increasing in value, nobody is losing money. However, a stock can’t just rise, it also has to fall or the market itself would crash as people would dump all their money into the guarantee gainer and take all their money out of the rest of the market, which devalues the other companies. That would cause the people who invested in the other companies, to lose money as they weren’t able to sell their holdings before it went below where they bought the other stock.

So therefore, you guys are technically wrong. I agree, however, with Tyrus’s assessment because most people have their money in thinks like fun

John answers:

The answer is categorically, completely, absolutely “NO” (as long as you are making money owning stocks). The best reason for a stock to go up in value is that the company is being very productive and providing goods and services that people want to buy. People are happy to buy their products, their retained earnings go up, and you make money. This is win-win, nobody loses.

An interesting thing to think about is that there might be 100M shares of a stock outstanding. If the current price is 45 and you want to buy quickly so you offer 46 for 100 shares, the stock price just went to 46. That means you spent an extra $100 but created $100,000,000 in value (maybe just for an instant, but you did it). How’s that for win-win?

Edit: You didn’t read my comment closely enough. I said nothing about the close. Anyway, your comment (I suppose) suggest that if one stock goes up there must be another that goes down. That’s just not true either. Purchases of stock are made from all kinds of sources of funds other than the sale of stock. Stock is purchased for retirement savings from income from work, from inheritances of non-equity assets, from sales of non-equity assets, etc..

I don’t think most of the answers here are wrong and my credentials for deciding that are better than yours.

Nancy asks…

how do you make money on stocks with all the brokerage fees?

how do you even make money on stocks with the steep fees charged by brokerages?
I understand that you cannot dive in with just a few dollars but at the same time I’m not throwing 5k on a whim for something. Everyone has to start somewhere and I was just curious about how you compensate for the brokerage fees.

John answers:

You need a good amount of money around $5000 because the transaction fee is around $15

Betty asks…

Can you make money on ten dollar stocks?

Can you make money on ten dollar stocks?
I’m new to the whole stock market deal. I want to know if i can make money on stocks under ten dollars?


John answers:

The problem with penny stocks is liquidity, the tendency for there to be manipulation of the stock and a lack of quantifiable information hence the term story stocks. Yes you can make money but if you’re new to investing you most likely won’t. It’s certainly not an area where you just buy a stock and hope the price rises although that probably could be said of any stock. I would say that if you do want to play with stocks less than $10, you still have to screen for reasonable fundamentals keeping in mind that sometimes the numbers don’t mean much cause the companies are so small and you should look for stocks with an active options market so you can limit your losses with options.

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