Investing in the Stock Market?

Question

I am a single parent raising two kids (both in high school). So i need a little extra cash to keep things working. Do you think investing in the stock market is a good idea? Why or why not?

Any advice for investing in the stock market?

Answer 1

It doesn't sound like a good idea for you if you want it to generate a little extra cash to keep things working.

"Investing" in the stock market is a long term thing, over time the average return of the "market" is between 8% and 11%.

Short term plays in the market is "speculating" and while it can be profitable, you shouldn't do it with monies that you can't afford to lose.

Answer 2

Not for getting a little extra cash. The stock market is for the long term affect.
You really need to invest in the stock market in order to stay ahead of inflation and to make a profit over the long run.
If you need extra money that stock market (stocks only) is not the place to speculate for the short term.
Currently however CD's are paying a better return around 5% with no risk. You can start laddering those for 6 to 9 months then out to 1 year etc. Studying that practice you may find out this will work for you- work with your local bank after studying about this concept.

Answer 3

I wouldn't jump right in to it. Research the issues first and be certain that any money invested is money that you can afford to lose. Remember, all investments in the market are not winners. Some lose big time. First hand, you should have 3-6 months of funds available in an accessible account for emergency funds. Don't ever go without this if you're going to invest in the market as that rainy day could be just around the corner. Literature from brokerage houses or the NYSE could be a place to start learning.

Answer 4

When investing in the stock market there is always a chance of losing money. The market is particularly nervous right now. You might want to try investing "play" money to start with, and then when you are comfortable, try your hand with the real stuff. Check out 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 read posts on investing from the best traders, as well as share your own investing ideas. There is a charting feature, so you can see how your portfolio performs compared to the S&P 500. Also, you can create your own "group" so that you can see how you are doing compared to your friends.

Here are this month's best traders:

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

Good luck.

Answer 5

The market is in a correction, so this is a good time to open an account and begin to look for potential buys. I recommend subscribing to Investor's Business Daily, as this paper has very useful tools in addition to merely providing price quotes. If you go to investors.com you can get more information on IBD, the philosophy of it's founder (VERY successful investor who started with little money) and learn which indicators are important and which are merely distractions.

I implore you, whatever you do, NOT to listen to ANY financial advisor/broker (they are used-car salesman with an MBA and without the class) and to ignore what you may read in your local paper or hear on television about the market. You can be successful if you are willing to treat it like a full time job and not a lark. Good Luck.

Answer 6

If you are looking for returns which can augment your income and you do not have sufficient time to dedicate to research, then you should not do it.

If you are looking for a place to put money away for an extended period of time, and generate a reasonable, tax-deferred return, then index funds are the way to go.

I do not recommend trying to invest directly in stocks if you do not have sufficient time to dedicate to research. Beyond time constraints, knowing what to look for can be challenging. For example, many people talk about PE ratios, but if you don't know which PE ratio matters most and what may cause these to be different, then your work may not prove as effective as you hoped. (By which PE ratio, I mean which earnings number to use... TTM: Trailing Twelve Months, NTM: Next 12 Mos, This year's, Next year's, etc.) BTW, I used PE ratio because it is the most recognizable, there are dozens of valuation metrics, and most have a place depending on the situation.

It is a lot of work and it can feel quite frustrating because there is a great deal of bad information out there.

If you choose to try it I wish you the best of luck

Answer 7

1) Yes.
2) Because Harvard is expensive.
3) Open a brokerage account at Zecco and invest in the ETF DIA.

Answer 8

if you have more than you need, you then invest it. but if u will need to use the money in the short-run, i will not advice you to invest it. i aint saying investing is not good. what i mean is that you should invest the excess of what you have and not what you know you will need.

Answer 9

For the purpose of a little extra cash, I would say no. Check your budget and see if you can cut back.

Answer 10

only invest if you can afford to do so