do you think that investing in stock is a good way to make money?

Question

How does it work. I have seen websites were you can buy a share but I am not too familiar with it.Please help

Answer 1

For many beginning investors investing in stocks can be a very rude affair, especially for those who are trying to get rich quick. If you do not have any knowledge of investing, you need to remedy that situation before beginning. Go to your library or book store and obtain a copy of "Investing for Dummies", less than $20. It is a good basic book that will give you some of the knowledge you need.

For most beginning investors without a great deal of money to create a diversified portfolio, mutual funds offer a good vehicle. You can buy them directly from the mutual fund companies, but many have a somewhat high minimum investment amount, about $2000. Some mutual funds such as American Funds, which has a front end load, have much lower minimum investment amounts, about $250, and the ability to add to the investment in $25 increments.

There are also index funds and closed end funds that trade like stocks. You can buy them through Sharebuilder.com, the common source for investors who wish to invest a little bit periodically. Of course you can also invest in individual companies, but there is some greater amount of risk in doing so because some unexpected event may greatly effect the price of the company's shares.

Answer 2

Stocks can be the best way the lowly people can make money through investments. Generally real estate is the best, but I live in a place where the average house sells for $640,000 and the property is nothing special.

There is different strageties to getting the best stocks. The benchmark is SPY (the SP500) which 80% of the mutual funds can't beat over the long haul. It's companion is the Russel 2000 small stocks which can be tracked via IWO.

Most beginners that daytrade will go broke withing two years, but make money by buying an index like the SP 500 or Russel 2000 over the long term.

Answer 3

I think it is a good way to make money. But nothing is gauranteed in the stock market. You could lose money, just as easily as make it. To learn about investing I would suggest the book "The Little Book that Beats the Market". It clearly explains the principles of value investing. Then I would suggest that you see what the best investors are buying and selling. You can find this information at http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. There is also a charting feature , so you can see how your portfolio performs compared to the S&P 500.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

When you are ready to start trading with real money, I would suggest you open an account at Scottrade.com - they offer $7 online trades - that is a pretty good deal.

Good luck.

Answer 4

Investing in stock can make you (very good) money but you can also loose it all (risk vs. reward)!

Stock is a "share" of ownership in a real company. You can either trade (buy and sell) stock based on the up or down price and volume movements (this is called "technical trading") or you decide to invest in a particular company by buying their stock.

I prefer to invest into companies. If you trade (especially if you do it often) you have high expenses (broker fees) and more taxation issues to deal with. To invest successfully (i.e. make more money than you loose) means you should know the companies you buy - their business, their competitors and their "value" relative to their share price. Buy when the share price is lower than their "value" and sell when their price is higher than their "value". It is quite tricky to determine "value" because it involves a lot of estimates and guess work.

Some general advice:
- Never invest money that you can't afford to loose.
- Never invest money that you need in the mid-term future (say 5 years)
- Invest in things you know (if you are very familiar with fashion, invest in fashion retailers, if you are a doctor invest in pharma, etc)
- Buy shares through a discount broker and keep your expenses low (say less than 2% of the transaction - with 7$ per trade buy at least shares for 350$).

There is lots more you should know before investing in shares. I recommend the Motley Fool (www.fool.com) where you will get good and free advice. If you decide to join their service you have access to their discussion boards and this is where you will get very good suggestions about investing, companies and all things finance in general.

Good luck!

Answer 5

If you invest for the long haul it's a very good way to make money.
Some people do day trading but that can be risky.
A safer bet it to invest in mutual funds or index funds and always re-invest the dividends, I manage about a 22% return annually compared to a bank that pays may 4% return.

Answer 6

It's about timing. If you get in at the top, you're going to lose.

Learn about investing. Learn about timing. Buy and hold sucks. I never do it.

But I'm long stocks currently.

Answer 7

trading not inveting in stock is good way

use technical analysis 4 timly buy sell
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goodluck

Answer 8

1) Yes.
2) You buy at $10.00 USD and sell at $100.00 USD. It's not exactly rocket science.
3) Scottrade. ($500.00 USD)

If you need more detailed FREE help then just drop me a line.