Your Questions About Money Making Stocks To Buy

Nancy asks…

Why does The FED encourage people to borrow money from banks to go into debt? leave a response.?

The Fed prints new money (making each dollar you have worth less) and buys US Treasury bonds (in QE1 and QE2) or (in QE3) mortgage-backed securities. Extra available money in the economy is supposed to force interest rates lower. That, in theory, should increase home sales. It is also designed to “encourage” people to move their money out of investments that pay interest and into the stock market, where the returns might be higher. More investment in stocks makes stock prices rise. Corporations should then hire more employees and investors should feel richer, hopefully spending more.
What part of any of that make since?

John answers:

Fractional reserve banking is one reason

major reason is that they know if interest rates went up, the entire phony economy implodes. So the Fed will buy everything up for cheap (low rates), help their buddies, while everyone else struggles to pay bills as the inflation tax hits them big.

Sharon asks…

For a person that knows nothing about stocks, where would they start to get information?

I have a little extra money and thought I might make some small investments in stocks…hoping I can buy low right now. Can you suggest any reading material..ie magazine, online articles etc. that could give me some help. Something for the real novice please. Thanks

John answers:

Go to www.investors.com which is Investor’s Business Daily online.

At their homepage locate the “How To Invest” section on the left side of the screen.
Click on “Investor’s Corner”.
Once that screen comes up click on “View Archive”.
The archive contains lots of informative articles that will help you understand the stock market, trading stocks, etc.

Some good books on the subject:
1) How To Buy Stocks by Louis Engel and Henry R. Hecht.
ISBN: 0-316-35380-9
2) Straight Talk About Stock Investing by John Slatter.
ISBN: 0-07-058142-8

Daniel asks…

Does anyone know what makes the stock market go up and down anymore?

In this day and age of computerized trading programs and algorithms, how do we even know what makes the stock market go up or down anymore? All of the computerized programs are different and we are never sure what exactly triggers a sell or a buy (or a hold, for that matter). When the human element is taken out of trading, it’s hard to say what triggers a rise or a fall. Do you agree?

John answers:

Not necessarily. For instance the computerized programs at least used by financial firms are highly technical and a layman w/ no economic knowledge can’t use it. In fact the human element is exactly the reason why it’s hard to see what causes stock to go up and down.

1. Herding Behavior
2. Fads

These are caused by the human element. B/c not all ppl trading stocks are rational investors, if a majority of stock traders trade b/c of fads (remember Tulips and the Dotcom) and the rest follow b/c of herding behavior, then a stock may go up even though the company isn’t really making any money. However, a rational investor will at least attempt to ignore the fad and analyze w/ computer tools to see if the company can make profits or not.

However, note that even if everyone in the stock market are rational investors. There is still random elements b/c of expectations. No one can tell the future precisely and accurately. Who knows one day a disaster could strike Silicon valley thus lowering the value of every stock in IT?

Laura asks…

How do I buy a home based internet business?

Hey guys,I really need some good advice on this one..Im 23,and I inherited a little over three hundred thousand dollars.I would like to use my money to make more money,but I don’t know where to begin.I am VERY interested in buying an online business though.I would like to be able to work at home from anywhere.Who could I speak with and get help to start that kind of process?

John answers:

You can send me a check or give me your online account info and I will take care of it for you haha. In all seriousness, online business are created by individuals. It’s not like you can go online and look to buy these like you can with cars or how you look online to find a job. Most of the time, these people find something they are passionate about and start from there. Obviously, it’s not an over night success story. Any sort of business takes a lot of research, hard work and time, to become successful if at all.

My advice to you, is to avoid this route. You sound as if you would lose every dime of that money. If you truly have that money, invest it into some low risk stocks.

David asks…

How do I go about finding a good stockbroker?

I am looking for one who wont charge me for the advice given or the stocks I buy but for the money I make from the advice and stocks i.e a 10% cut. I see this as an incentive on their part to not be a slacker…

Any ideas on good companies within the UK??

John answers:

Good luck with that, lol.
I don’t think you can make the rules, they get paid whether you make or lose money.
In the US you can just look them up in the phone book, also most banks will sell securities. Just ask them all to send you a list of fees for trading, I think youd do better with an online acct like etrade.

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