Your Questions About Money Making Stocks To Buy

William asks…

How to start buying shares in the stock market?

Can I make money with the stock market by buying shares?

How do they work?

How do you lose and earn money in the stock market?

Also are there any other ways to make money off the stock market? I’m a kid so please explain everything (I’ve read other sites and I didn’t get everything they wrote).

John answers:

If you’re a rookie in investing or stocks, go to

www.finance.yahoo.com.

Open up a portfolio without using real money. You can give yourself as much or as little money to try out the market. The stocks you want to focus on is consumer staples, consumer discretionary, and healthcare. These are DEFENSIVE stocks that will survive through good and bad times. Most of my positions are in these stocks. Some names include 3M, Procter & Gamble, Kimberly Clark, Exxon Mobil, Walmart, Costco. Everybody’s got to eat and wipe their butts regardless of the state of economy. Many of these companies survived through the Great Depression.

That’s the benefits. You can sleep at night knowing your money is doing well. There are NO guarantees that you won’t lose money. It’s just that these stocks are the best. They pay good dividends too.

Then once you’re comfortable and test the waters of the market, you can finally put some real money in. Go to Scottrade.com. They’re excellent for beginners.

If you’re new to stocks, DON’T DAY TRADE. You’ll a rookie in a world of professionals. I tried day-trading with Citigroup and AIG when they were a little bit over $1. I had some luck at first, making about $30 a day but I was way over my head. My luck didn’t last long and I had to rethink my strategy.

Day trading involves A LOT of commissions to the broker. With all the commissions deducted from each trade, you’ll be lucky if you only lose half your money.

I would just day trade using Yahoo! Finance. Open a stimulation account, give yourself $100 worth of fake money and play it in the stimulation format. You’ll see what I mean by losing money every easily.

Good luck.

Carol asks…

How can a minor start investing?

I want to start buying shares of companies to earn some income. I’m a minor and I don’t have a paying job, but I’m really interested in investing. My parents are willing to help me out with contracts and legal stuff. I don’t have a credit card and I don’t have a whole lot of money to start investing and buying shares, but I do have some. I read that TD Ameritrade let’s you purchase shares for a minimum of 100$, is this true? How can I start making long and short term investments, so I can have some spending money and money to save? Thanks for the help! I know some of the basic terms and things, what I really want to know is how to start making money towards college and other future goals.
I also want a new phone LOL! Is there Anyway I can get some cash for that soon? ( ;

P.S. do you know of any companies that are share holder-friendly, you know like, they have stock buy back programs and such? Thanks!

John answers:

In North America you must be 18 to open a brokerage account, however a parent can open a custodian account for you using your social security number. When you turn 18 the assets in the account can be moved to an account in yur name.

I know where you’re at, I started investing when I was 11, and was trading when I was 16 and have spent over 45 years working in the securities industry, so here’s my advice to you from some one who’s been there.

Before you spend $0.01 on any investment, you must know what you’re doing, why you’re doing it and how to do it. Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Begin your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs. Start your education by reading “Investing or Dummies” by Eric Tyson.
To continue your education select some of the following
Beating the Street by Peter Lynch
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
From Riches to Rags, by I.C. Freeley
Millionaire Traders, Lein & Schlosberg
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Intelligent Investor, by Benjamin Graham
Common Stocks, Uncommon Profits, by Philip A. Fisher
One Up on Wall Street by Peter Lynch
Stocks for the Long Run, by Jeremy Siegel
Trading for a Living, by Alexander Elder
Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt.
What Works on Wall Street by James O’Shaunessey
You Can Be a Stock Market Genius by Joel Greenblatt
Your Money and Your Brain by Jason Zweig

Websites that can provide instructions and help with procedures and terminology are Investopedia – http://www.investopedia.com/ http://www.investorshub.com/ and 1 Source for Stocks – http://www.1source4stocks.com/info/stock-analyst-opinion.asp or Smart Money
http://www.smartmoney.com/
Visit some of the more professional websites like Zacks Research – http://www.zacks.com/ Investors Business Daily – http://www.investors.com/default.htm?fromad=1
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.

Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses. Try to get some fee information from The stocks exchanges they all have (had) free booklets, SIAC and some of the regulators (FINRA SEC MSRB CBOE) may provide some free literature.

And when you think you want to invest/trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/
and/or http://www.tradingsimulation.com/

You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest.

Good luck on journey, study hard and you’ll invest well.

Sandy asks…

How can a minor start investing?

I want to start buying shares of companies to earn some income. I’m a minor and I don’t have a paying job, but I’m really interested in investing. My parents are willing to help me out with contracts and legal stuff. I don’t have a credit card and I don’t have a whole lot of money to start investing and buying shares, but I do have some. I read that TD Ameritrade let’s you purchase shares for a minimum of 100$, is this true? How can I start making long and short term investments, so I can have some spending money and money to save? Thanks for the help! I know some of the basic terms and things, what I really want to know is how to start making money towards college and other future goals.
I also want a new phone LOL! Is there Anyway I can get some cash for that soon? ( ;

P.S. do you know of any companies that are share holder-friendly, you know like, they have stock buy back programs and such? Thanks!

John answers:

As a minor, you can ask one of your parents to open a trading account “in trust” for you. They can make the buys and sells that they, or you, want to do. They will be charged income tax on any profits that are made.

Each transaction, e.g., every buy and every sell, will cost you between $10-20. If your total transaction was for $100, you will need to make a profit of at least 20% before you receive a profit. There are very few stocks that quickly grow 20%. You would be fortunate to make any money as many stocks drop in value or remain relatively stable. Some pay a dividend, but that might be 2-4% per year.

I would suggest you take the $100 and buy several books, such as Investing for Dummies. Learn all that you can. If this is a strong interest for you, you might consider a future as an investment representative or financial adviser

Nancy asks…

How does one lose money in stock market?

Okay, I’m a newbie at stock market and I do not plan on being a long term investor. I am simply asking for the sake of the stock market game that one of my college class is taking part of. I understand that if I buy a stock at a low price, and sell it later on at a higher price I make money. However, would I lose money? Sure, I’m investing my money on stocks but can I end up having less money in the end? From my understanding, I would never really “lose” money because I would not sell the stocks that I bought for a lower price.

So what exactly do people mean when they lose money in stock market? If I’m starting out with $100k, could I end up with less?

John answers:

Lets assume that you buy 100 shares of a particular stock that is valued at a $1 per share. If stock price dips to 90¢ per share, then the value of the stock that you own is now only $90. I guess that it’s true to a certain extent that you’re not really losing money, because it always has a chance to go back up and hopefully far exceed the price of $1 per share. Ultimately, all that really matters is the difference between what you bought it for and what you sold it for.

Sandra asks…

How can a minor start investing?

I want to start buying shares of companies to earn some income. I’m a minor and I don’t have a paying job, but I’m really interested in investing. My parents are willing to help me out with contracts and legal stuff. I don’t have a credit card and I don’t have a whole lot of money to start investing and buying shares, but I do have some. I read that TD Ameritrade let’s you purchase shares for a minimum of 100$, is this true? How can I start making long and short term investments, so I can have some spending money and money to save? Thanks for the help! I know some of the basic terms and things, what I really want to know is how to start making money towards college and other future goals.
I also want a new phone LOL! Is there Anyway I can get some cash for that soon? ( ;

P.S. do you know of any companies that are share holder-friendly, you know like, they have stock buy back programs and such? Thanks!

John answers:

Here is an article may it will help you!
You know much of what you need to know by now: that you can turn a little money into a lot of money over time; that for most people, stocks are the best kinds of long-term investments; that mutual funds invest in stocks (and other things); and that index funds are a particularly appealing kind of mutual fund.

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