what can you tell me about the stock market?

Question

i may be able to get 5K to put in to stocks, so should i save the 5K for some thing else or try the market?

i read a few books one called the magic formula and some others, one writen by warren buffet(i think thats his name) and it seemed good.

Answer 1

Several recomendations:

- Good decision. Its the most profitable investment option, in the long run

- Continue learning.
Visit
http://www.fool.com/
Its free. Its great. Study the different strategies proposed there.

- Invest money that you will not need in the next 5 years. That will give you time to recover from any bad year. At the end you could have made 12-15% annually.

- Simulate a portfolio for some months, to see how it works, to see if you have the stomach to buy again a good company that has dropped 30%, to see if you resist all the pressures of the hundreds of contradictory articles written every day. Invest after that period.

- Select a good discount broker. An operation at market price would cost only $ 5. I use E-Trade or Ameritrade

- Remember that the big gains come from buying when everybody is selling

- Buy for the long term, and something that you can understand. Remember that you are buying a share of a business, not a lottery.

- It does not matter what other think today about the stock. What is important what the value of the business will be in the future, compared to the price that the market is giving to it today.

- Make note of the reasons (that is your strategy) for buying a stock. Sell only when/if that reasons do not exist anymore. This is specially important after a drop in the price. if the reasosns are still there, it a moment to buy and not to sell at a loss.

- When to sell? that is the most dificult part.
I use the trick of asking myself if I would buy that stock today.
If I would buy it, why sell it?

- Patience. Money is not made buying and selling every day.
Day trading always lose, in the mid term.

I could continue, but I do not want to be boring.

Good luck!!

PD: Simulate first...

Answer 2

This is a difficult time for a new investor.

The Dow is within 200 pts of the all-time historical high set in Jan 2000. It will more than likely pause before or near this level, and may go into an outright decline. Or it could simply thrash around and go sideways for several months. But a case cannot be made for a raging new Bull Market from here. The time to invest new money is after a decline, not at the tail end of an old rally.

Your money would be better off in an interest bearing account until this market decides which way to go.

Answer 3

Something you might consider is setting aside some of that, about 2k, and open a self-directed IRA at a brokerage like Scottrade. You may also get a tax-deduction. I did that one year and got almost half that back in increased tax refund, a fluke in the figures for sure that won't necessarily compute that way for you, but worth a consideration.

You might consider some Exchange Traded Fund (ETF). There are the Ishares which has a very, very low cost for operations in most of them. Something like the (NY) New York Stock Exchange top 100 companies--you get a piece of the very biggest (market capitalization) companies which TEND to be on that list because they are exceptionally good and reliable at making the biggest profits. Getting a piece of the action for this blue-chip piece of action ($60-someodd dollars a share) is pretty cheap. That's just one of hundreds of possibilities. There is (DIA) Diamonds, buying into the Dow Jones Industrials. You will spend about $115.53 as of Friday's close, a familiar number in that it is real close to the Dow average close at 11,660 (100 shares at 115.53 is 11,553, which is exactly owning what the DJ Industrial average is based on--less a discount for some pessimism that buyers in DIA are assuming the Dow won't stay at 11660: interesting hint on how to read, and possibly profit, from the trends). That's just one of numerous examples.

So, with 2k in an IRA for your retirement, a possible tax benefit, and 3k in a separate account or kept in the bank for a rainy day or special opportunity. Sounds pretty good, eh? Good luck.

Answer 4

Many pay for lesson when they first start investing in stock market, you have to prepare for some lost in the beginning. Glad you did some readings before you start, even then, it may not be a 100% proof or assure of making lots of money. Try reading this book call the armchair millionaire. Personally, I like it as it is a lazy sure way of making lots of money.

Answer 5

buy stock in the electric company people will always need electricity even in recessions.use 3500 to purchase stock in the electric company then use the rest to buy 6 month cd.after you purchase stock then join the automatic invest program from the stock company and let the dividends buy you more stock the purchases will be fractional but they add up.When your cd matures use the interest to purchase addional shares in the electric company and this will be done without commissions through the share plan then in twenty years you will be able to take long vacations while all those babyboomer showoffs with there massive credit card debt are working part time at grocery store HAHAHAHA baby boomer showoffs are broke.

Answer 6

Well basically you invest in companies that look that they are going to still be here long down the road and are thriving. You might also look for start up companies that really meet a need in the society. Get in early and riches can be yours. There are no load mutual funds to check out too. Brokers can really eat you alive. Every sale and purchase requires a fee. I don't trust so-called money managers. They take a fee whether you gain a profit or lose. You might be wise to look at retirement plans, IRA's, Roths, etc.

Answer 7

These are some great websites for learning about the current market conditions.



http://champs-and-chumps.com/

http://biotech-news.org/

http://oil-profits.org/

http://gold-news.org/

http://mining-profits.org/

They all have good coverage of the major stock market sectors. That can really help you learn and choose companies to invest in.

Answer 8

put it into a CD while you decide. Buy all your stocks at one time to lower the transaction fee. Buy a wall street journal. they have 52 week highs and lows of all stocks.

Answer 9

LQMT.OB
LiquidMetal Technologies- its just a matter of time before this stock skyrockets.

Answer 10

put in the the safe investment while you learn

Yes you could learn invest by yourself. it is your money, you should know how to do with it. for starter check this site out.

http://www.pathtoinvesting.org/index_fla...
http://www.stockcharts.com
http://www.streettalklive.com section university. a lot amount of information. It will serve you well
I accumulate in good amount in 401k at the young age.I could share with you. when consider invest in stock market. you should consider basic 3 things:

fundamental analysis==(economic data,finincial health, management, business model, competetion)>>what to buy

technical analysis==(chart+indicator)>> when to buy

Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of your live

At the age of 32. my 401k is amassed 74,000.00 and 30000.00 in taxble account. by follow simple rule