Your Questions About Money Making Stocks To Buy

David asks…

im interested in leanring stocks and how to buy and make money can anyone help me?

John answers:

There is a great book called the Wealthy Barber. Look it up at the library.

Mark asks…

how much money do people make buying and selling stocks normally and how much would be alot to make in stocks?

John answers:

At the moment people in general are loosing money rather than making money. A lot? Maybe 5x your investment. In my book that would be a lot. 2x is really good. Overall maybe a 10% to 12% annual return. I would be happy with that.

Sandra asks…

when you buy some stocks, and later you want to make money, do you have to sell your stocks back to have money

or cash?what if you try to sell them later and no one wants to buy them?

John answers:

Stocks have value if the company they represent has any value. Only if a company closes is the value zero. Bankrupcy or high risk may may the company approach zero.

Stocks are only bought and sold through a broker, who records the transaction and gets certificate issued if you choose. You buy the stock at the value established by the market while the stock market that lists the company is open.

For example, if you bought Hewlett Packard stock last year (symbol HPQ on the New York Stock Exchange), you could have bought it for $25 a share. The commission fee to the broker would be under $100 usually…so you don;t usually buy just one.
If you wanted to sell it last Friday, when the stock was selling around $40/share (and the comission to the selling broker is under $100), then your would have made about $15/share. If you had 100 share, you would have made $1500 over the year.

Then again, the stock could have dropped and you could have lost money if you HAD to sell. But that is the trick to stocks…pick winners through analysis of where you believe the company will go. HPQ made money because their sales were up, costs were down and they made money. More people wanted the stock and demand rose as did the price.

YOU do not find buyers, there is always buyers at a price, else the price goes down. It is offered for sale by brokers (when you authorize the sale), buyers take it or leave it at the price offered. The broker just sells at the market price. .

Think of it this way. If Ford is selling a hot car, the price of the car goes up over time. If sales are down, the prices start to fall. Stock sales are the same. If you buy a car, your money is tied up in the car until you sell it…then you get money back. Stocks are usually a better investment, there is no depreciation like a car has, but sometimes the value does go down. .

Now, there is a way to lock in your price. You can tell the broker to sell at a limit price. Lets say I want $45 dollars per share for sale of HPQ stock. I could tell the broker that and when the price reaches that it gets sold; maybe next week, or next year.

Generally speaking, the longer a stock is held, the more likely you are make money on it. Some more than others. Many stocks also pay dividends. Since stock is a partial ownership of a company, you share the earnings through dividends; usually a few cents to a few dollars per share or more.

Hope this helps

Chris asks…

How to find best penny stock to buy?

I just start my work with TDAmeritrade with stocks.
I want to buy good penny stock to start making some money then buy other stock. There is any direction and how to do it

John answers:

My friend, please don’t ever buy a penny stock. In the stock market, you get what you pay for. Stocks that are very cheap are companies that normally are in bad financial shape. What good is it to buy lots of shares of something that isn’t any good. You would be much better off to buy as many shares of good companies than buying lots of shares of poor companies. And when those penny stocks go out of business your stock becomes worthless and your money is gone. It is hard enough to make money in the stock market when you own good stocks, forget the cheap ones, they are for suckers. Start buying the newpaper investors business daily and they help you find the good companies to invest in, and watch cnbc on tv all of the time, good luck to you

Maria asks…

When you trade stocks using options does it always work to make money if you buy low and sell high or buy….?

I am trying to learn more about stock options trading, and what I’d like to know is if it works that when if when you see a companies stock trend charts, if its trended downwords for, say, 1 month, could you be greedy when others are fearful, buy calls, and if the stock according to the chart has trended upwards for again, 1 month, could you be fearful when others are greedy and buy puts? Does this actually work? Is this the formulae for making money by trading options? Please help/advise.

Also, good, reasonable, understandable answers would be much appreciated. Thanks.

John answers:

It does not always work that way. Options unlike stocks have a finite life span. As they approach expiration they loose time value and eventually if they are not in the money become worthless. The time premium works against you. The longer the option the greater the premium. In many cases and most frequently most cases the time premium is more than the expected appreciation of the underlying security. If that were not the case no one would be willing to sell the option to begin with.

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