Your Questions About Money Making Stocks To Buy

William asks…

How do people on make money trading stocks?

Do they trade stocks constantly? For example, buy 100 shares when the price is 20 in the morning, then sell them 2 hours later when the price is maybe $25? Then buy another 125 when the price goes to 20, or something lower. Please ignore the actual prices, its just the idea. If not, what problems are asociated with this system?

John answers:

There are actually four kinds of people who make transactions in stocks. They are traders, speculators, investors, and market makers. Traders actually take advantage of the spread. Speculators require momentum. Investors are in for the long-term and are usually interested in dividends or growth. Market makers maintain liquidity and take countering positions.

You have describe speculation, which requires price movement (momentum speculation). The biggest problems with that strategy are that anyone who is guessing will be wrong more often that right, broker commissions will eat your bankroll (whether you profit or lose), and everyone else is trying it too, usually faster than you.

Maria asks…

Can someone tell me all about stocks? Is it a good way to make money? How do I invest or buy stock? what are t?

he best companies to invest stock in right now? can you invest in forgien stock?

John answers:

Stock are basicaly a percantge or share of ownership right in company depdnding on how many u have it cAN BE a good way to make money if u know wat ur doin one week somthing can do god not somuch the next depnds on how the market is doin and the current demand and exxoonomic conditions some stocks can sit still and go nowhere for years only to make you rich 10 years later the key is to pick the right one and dont sell it when everyone else panicks and wiat it outto buy stock u will need a stock broker there are several like scottrade etrade jus google brokers itl come up with alist of em go to their site open an account you will have to fil out some forms first to get approved then transfer the money to the account and type the company u want hit trade specify how many shares uwant to buy or sell as far as good stocks i would pick blue chips or high dividend growing stocks such as mcd or wmt but buy companies u know too

Nancy asks…

Whats the best stock to buy and make good money?

I’m in 12 grade doing a stock market games for my Economic class and I just want to know good stocks to buy. I buy some from Apple.

John answers:

Gold &
petroleum, banks

Ruth asks…

what is the likely hood of making lots of money on 4 stocks at 1.58 each if they go up?

and how far are we talking to be able to make a nice chunk of change ? do i sell them or do i trade them and what is the diffrence ? i bought four stocks from GWBU for 1.58 each and it goes up and down like a pair of panties what is the likelyhood i can make any kind of money should i sell and transfer the funds if it goes way up and then do the same with another stock or just hold them ?

John answers:

Those are called penny stocks. They are cheap for a reason. They are probably not good companies. You are not likley to lose your money. I would never buy those kinds of stocks.

Lisa asks…

How Do You Make Money Off Of Stocks That Don’t Pay Dividends?

I am confused about how people make money off of stocks that do not pay any dividends. This is the way I think of it.

Buying a stock is really buying a part of a company. So let’s say there are 100 stocks of a company that makes 1 million a year in profit. Now let’s suppose I purchase 10 out of the 100 available stocks, which is 10% of the company.

Okay so from that initial investment, you would suppose that I would be entitled to 10% of the profit – seeing as how I own 10% of the company. Of course some of the profit has to be reinvested into growth.

But… What I don’t understand is how anyone makes money off of companies that don’t pay out any money. Its like I own 10% of a company that never gives me a return on investment and the only way to profit is to sell it to some poor shmuck who will buy it for a higher price.

How do I make money off of buying stock in a company that never gives me a return on my investment except through selling it to some other poor sucker?

John answers:

Yes, if the stock doesn’t pay a dividend, then the only way that it pays to own the stock is to sell it for more than you paid for it. But why does that make the buyer a sucker?

If the company is small and growing — and of course as a stockholder you want it to grow — it’s perfectly reasonable for it to retain 100% of the earnings for growth and pay 0% dividends…for now.

However, I will agree with you to this limited extent: There are mature, stable, slow-growing companies that make a healthy profit that really should be paying dividends, and don’t. If they did, their stock price would probably rise.

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