I just read in stock investment for dummies that stock investment is not good for short term.?

Question

Short Term-- Less than and year
Intermediate Term-- 2 to 5 years.

Is that true that i can't just learn the market and start making money. that I would have to invest for 5 years if i want to see safe returns.

If not what is the best way to make money fast, I mean within reasonable time (don't post messages about stupid programs, trying to make me your refferal,, i will report you)

Answer 1

If you want a safe short-term investment you can invest in a money markets, CD's, savings accounts, or Treasury Bills. None of these are going to pay much higher than 5.5% at current interest rates. Safe short term investments are not going to be high paying. That's just how the investment world works. If some one tells you they have a safe high-paying investment, they are probably a scam artist

Answer 2

You could possibly make money in the short term, but the problem is that the market fluctuates enough that in the short term you could possibly loose money just as easy.

For instance, if you invest say $5000 and the market drops for a year or so and you want the money then, you have lost money. If you leave it alone for a few years, historically the market will go up and you will eventually make money on your investment.

That is why people say that the best way to make money investing in the market is to stay in for the long term.

The idea behind that is that the market will be up more than it's down.
Historically the market has been up more than down.

Answer 3

Most books on investing tend to look down on 'trading,' or 'speculating.' I won't bother commenting on that right now, just that you should know there is a definite 'buy and hold' bias to most investing books. But that's what 'investing' is all about, I suppose.

Here's one way of looking at it. Day trading offers the highest possible returns in the shortest amount of time, but it is probably the most difficult type of trading to master. It's almost a certainty that the majority of day traders end up loosing their money and getting out of the market all together. Swing trading (holding positions for a few days to a few weeks) offers nearly as good profit potential, but again is extremely tricky. Position trading (holding for several months to a couple of years) is much easier to learn, but the profit potential is less. And long-term investing is probably the easiest to learn but you must have the patience of years in order to see the real gains.

So it comes down to (1) your tolerance for risk, (2) your preference of being actively involved in the markets daily, or not wanting to devote too much time to your investments, and (3) your purpose for trading (make a living now, or save for retirement). Answer these questions first and then the decision to be a 'trader' or an 'investor' will be much easier.

Answer 4

There are two basic reasons why investing in stocks might not make sense in the short term. One, "investing" usually refers to making a long-term play on a company's stock because you believe the company is strong financially and has room to grow in the future. As mentioned by others, if you take this approach, you need to be able to weather short-term fluctuations that may cause stocks of good companies to go down, rather than straight up.

Two, the other issue with investing in stocks on a short-term basis is capital-gains tax. Selling stock holdings that you have owned for less than 12 months generally incurs a relatively steep short-term capital gains tax, while holding onto stock for more than a year, then selling it, will instead generally incur a less-severe long-term capital gains tax.

Answer 5

When you said, "i can't just learn the market", it reminded me of an old story. Several old guys were sitting at a table, shooting the breeze, and a young fellow came up, quite proud of himself. The young guy said, "I've just figured out women." The old guys just laughed and left him at the table.

The market is several million minds and several thousand computers. Each player has his own resources, purposes, and skills. The market is an aggregate of all of that.

As for investing, it is different from trading. An investment is planting a tree and watching it grow. Trading is more like chasing chickens around the chicken coup, hoping the one you catch will be dinner tonight. Both are potentially profitable. Both can be a painful waste of time and effort.

There are two basic ideas. One is that stock XYZ will make money and become more valuable in the future. The other is that XYZ stock will be interesting to people who may soon want to pay more to get it (or less if you are shorting the stock, making money as the price falls).

It is akin to guessing that women will want men with moustaches this year, so you grow one, or guessing whether that particular woman you are interested in wants you in a moustache. So you can, in this sense, hear that XYZ is interesting to others and buy it hoping that as more people are interested they will offer more to take your shares, which is trading. Or you could buy XYZ because they make money, and looks like they are likely to make still more money, so buying shares of it increases the value of those shares because of what XYZ intrinsicly does by making money.

Figure out which game you play, and sift through the stock listings and find out which looks like what you want to do.

Answer 6

There is no get rich quick program in the market. If you want to invest in short term investments you MUST understand the basics. Good company growth, profitability quarter after quarter. A product that shows potential for demand. Learn how to read the volume traded, when there is profit taking. If trading in penny stocks or pink sheet stocks You MUST be able to recognize scams to run up the price for the company holders to dump their holdings. It will take you months of reading & studying the markets for you to be ready to trade with any hope of beating the market. Good luck!

Answer 7

Generally for the average person, you should invest long-term in the stock market. Investing in the short-term is risky and takes a lot of time to research the company's performance, current market conditions, etc. Also, you must pay a commission for every trade you make (broker fees, etc.) so it can be rather costly.

Answer 8

there are just so mane methods you can participate in stock market. To name few,
1-buy low sell high
2-buy high sell higher
3-buy and hold till death (or till you achieve your financial goals)
4-sell high, buy low (shorting)
5-sell low, buy lower (shorting)
6-fundamental investing
7-value investing
8-technical analysis
9-speculative investing
10- etc..

up to you which one suit you risk appetide? it is true that the higher the gain, the higher the risk. but you can lower it with knowledge (expertise) and tools (maybe trading software).

Answer 9

Not for dummies.