I want to learn how to invest in stocks but i haven't have a clue about anything?
Answers: Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfolio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low -expense funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.
If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.
I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.
If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.
Believing advice you get on runeye.com can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.
Sources:
http://www.vanguard.com/VGApp/hnw/planni...
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetalloca...
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin...
http://finance.yahoo.com/funds/basics
Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://personal.vanguard.com/VGApp/hnw/...
https://ais2.tiaa-cref.org/cgi-bin/WebOb...
http://www.ifa.com/SurveyNET/index.aspx
Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)
529 plans: http://www.savingforcollege.com
Here are some sites that should help you get started. don't pay for any of these services, of course, (unless you decide you want to), but you can use their free features.
DON'T INVEST until you've saved up some cash, and you are reasonably out of debt. A mortgage would be fine, but don't stick your money in the market if you have 5000 on credit card debt and 8000 on your SUV.
One thing about investing in the stock market - you really have to watch your investments, otherwise you may lose money when you want to make money.
I owned stocks for several years that brokers advised me to buy, and I lost money. I sold most of my individual stocks and put them in a money market account, through a brokerage agency, at least I know I wont LOSE money.
I also own a few mutual funds.
Read the following books:
"Wall Street: The Other Las Vegas" by Nicolas Darvas. This describes how Wall Street works. It's doesn't sugar coat it like most other books. It also describes Darvas' trading method.
"The Trading Rule that can make you rich" by Edward Dobson. This describes the 50% retracement rule, which is the simplest and most reliable trading rule.
Reading the first book will teach you an important lesson about being skeptical to news reports, tips, rumors and fundamental information regarding stocks. Historically, the first groups of people to buy stocks are insiders and professionals who stand the most chance of making money. By the time the public gets around to it, the stock price stands the best chancing of DROPPING.
I know someone who works in the Quant group at Goldman Sachs who says the following:
"By the time you buy, the smart money has already sold."
Keep that in mind.
Reading the second book will prepare you for timing your entry into the market.
My personal recommendation is to pay very little attention to what other people, including professionals, tell you. You can do all the research you want into a company's portfolio and a company's news ... you can place your buy ... and you can very easily see your money go down the drain. It's not because of anything you do wrong - it's because Wall Street is a "money game" and there are people out there who are substantially more prepared than you.
And even some of them LOSE.
On the other hand, don't give up. If you're truly interested in trading, start reading those books.
If you want someone else to manage your money, tell them you are interested in buying into a "BEAR FUND." This will make you money during a recession.
Why is EFII's stock price dropping?
Any ideas?Answers: The souk is in a correction at the moment, proceeds and revenue growth are projected down year over year, and Bank of America downgraded the stock.
Looks fully valued at $12-13 per share.
The markets are up then down..uncovered problems continue to surface.does the market make you edgy?
Answers: Sure, if losing your money doesn't make you nervous you're not right. However, there are ways to accept the roller coaster of the stock market. One way as you've been told is to divide your investment into different portions and types of investing. Another thing to remember, even though the stocks keep going up and down, over the long term they have always gone up. Invest for the long term, when prices drop, BUY. That's when the stock prices are at their lowest.
no not at all.
when it goes down i buy more stock.
when it goes up i sell more stock.
Not really. I actively invest in the market, but I also have a portion of my investment $ invested elsewhere.
People obviously use various investment stategies. I hedge most every stock position I establish with and option position so that I have a little protection in a volitile market.
It doesn't make you edgy if you control your risk.
Ways of controlling risk include:
- stop losses to get out of a trade with a small loss
- hedging instruments such as buying or selling options or forward month contracts
If you don't understand these terms, learn about them.
Markets have always fluctuated, why should this make anyone edgy? the market falls, the government and smart investors come to the rescue, stocks rise, everyone feels confident, investment rises, return to step a.
Free enterprise aside, the only thing that makes me edgy is our failing monopoly on strategic interests across the world.