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Stocks return money to an investor in two ways.
First the stocks may pay a dividend. This is a distribution of it's after tax earnings to it's shareholders. These dividens are tax at a 15% federal tax rate. Beware, not all stocks pay dividends.
The second way to earn money is to but a stock at a certain price and then sell it at a higher price. If you do this and sell the stock within one year such increwase is a short term capital gain that is taxed at your regular tax rate. If you sell the stock after holding it for more than 12 months you would have a long term capital gain which is taxed at 15% for federal tax purposes.
The risk is that the stock would go down in value and you would sell at a capital loss. A capital loss can be deducted at the rate of $3,000 per year.

2006-11-28 06:14:39 · answer #1 · answered by waggy_33 6 · 0 0

Go to Moodys and find a mutual fund you like. They are divided by risk factor, return average, size of company, growth, blended, value, and sector: health/utilities etc.
Mutual funds have the resources to lessen your potential loss and increase your return through spreading the investment around a number of stocks.

2006-11-28 05:47:51 · answer #2 · answered by Anonymous · 0 0

Please click on http://www.4xmoneytrain.com

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Make sure you watch the two short movies and fill out the survey so that someone can get back to you if you have any questions.

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2006-11-28 07:39:11 · answer #3 · answered by Anonymous · 0 0

The first step is to open a brokerage account.

2006-11-28 06:45:07 · answer #4 · answered by Anonymous · 0 1

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