Your Questions About How To Invest In The Stock Market With Little Money
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Your Questions About How To Invest In The Stock Market With Little Money

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Your Questions About How To Invest In The Stock Market With Little Money Document Transcript

  • 1. Your Questions About How To Invest In The Stock MarketWith Little MoneySandy asks…How can a 15 year old with only £100 get started with investing inthe stock market, mutual funds etc.?I only have £100 from pocket money. I have always been a business-orientated person and Imbecoming more interested in stocks now. I want to get involved but the only thing is I dontknow how to get started. Plus I have little starting capital. With the little money andknowledge I have, how can I learn more and get started with investing? Thanks for your time.Steve Winston answers:Investing Tutorials - Basicshttp://www.investopedia.com/university/buildingblocks.asp#axzz1b0PGJiek 1 / 14
  • 2. Betty asks…College-age students in the stock market?I know this may sound like an uncommon question, but Im looking for input from someone moreknowledgeable than I. I am a college freshman, 19 years old, working towards a four-yearbiology degree with plans for graduate education, most likely medical or pharmaceutical school.I have a network of extended family that is comfortably retired from the financial industry afterdoing considerably well in it. To make a long story somewhat short, they were advising me onsaving for my education over Thanksgiving dinner today. In addition to the savings I haveaccumulated in various bank accounts, CDs and bonds, they have advised me to also invest aminor amount of money in the stock market and establish a portfolio at a young age. Im alittle apprehensive about this, especially given the volatility of the market today. I told them thatI didnt think investing in stock is appropriate at my age and that I should go for moreconservative options. However, their point was that is important to diversify my savings amongvarious sources, including stocks.What do you think about college students getting involved in the market, and how should I goabout doing it (if at all?)Steve Winston answers:Your safest bet is a Total Stock Market Index Fund or ETF. These funds literally own everystock in the market, so when times are good, they go up in value. When times are bad (likenow) they go down, but will regain their value when the economy eventually improves, as italways does. Theres no way their value can go all the way to zero, unless the stock market 2 / 14
  • 3. somehow ceases to exist, in which case you most likely have worse things to worry about thanyour savingsAlso, the dividends paid by the stocks in the fund are collected and divided equally amongmembers, so you will get dividend payments that you can spend or reinvest as you see fit.It is safer than trying to pick stocks in individual companies, which can permanently lose valueor go out of business all together. It is also cheaper than regular mutual funds, which chargehigher fees.Ask your family members with history in the finance industry about an index fund or etf thattracks the entire US stock market and see if they think it is a good choice for you.Sharon asks…Why did Jesus teach that the kingdom of Heaven and the stockmarket are alike?The one with 5 got 5 more. The one with 2 got 2 more. The one who didnt invest at all waspunished. Jesus is telling us that we must aim to get 100% return for our money or else well bepunished with poverty. The only way to do that is with the stock market. Jesus says thatinvesting in the Stock Market is like the kingdom of Heaven? If so, we should all invest in thestock market.I say, "Lets put our money aside for a moment and just be decent to one another. But Jesussays to always be investing and getting 100% return?Parable of the Three Servants14 “Again, the Kingdom of Heaven can be illustrated by the story of a man going on a long trip. 3 / 14
  • 4. He called together his servants and entrusted his money to them while he was gone. 15 Hegave five bags of silver to one, two bags of silver to another, and one bag of silver to thelast—dividing it in proportion to their abilities. He then left on his trip. 16 “The servant who received the five bags of silver began to invest the money and earnedfive more. 17 The servant with two bags of silver also went to work and earned two more. 18But the servant who received the one bag of silver dug a hole in the ground and hid themaster’s money. 19 “After a long time their master returned from his trip and called them to give an account ofhow they had used his money. 20 The servant to whom he had entrusted the five bags ofsilver came forward with five more and said, ‘Master, you gave me five bags of silver to invest,and I have earned five more.’ 21 “The master was full of praise. ‘Well done, my good and faithful servant. You have beenfaithful in handling this small amount, so now I will give you many more responsibilities. Let’scelebrate together!’22 “The servant who had received the two bags of silver came forward and said, ‘Master, yougave me two bags of silver to invest, and I have earned two more.’ 23 “The master said, ‘Well done, my good and faithful servant. You have been faithful inhandling this small amount, so now I will give you many more responsibilities. Let’s celebratetogether!’24 “Then the servant with the one bag of silver came and said, ‘Master, I knew you were aharsh man, harvesting crops you didn’t plant and gathering crops you didn’t cultivate. 25 I wasafraid I would lose your money, so I hid it in the earth. Look, here is your money back.’26 “But the master replied, ‘You wicked and lazy servant! If you knew I harvested crops Ididn’t plant and gathered crops I didn’t cultivate, 27 why didn’t you deposit my money in thebank? At least I could have gotten some interest on it.’28 “Then he ordered, ‘Take the money from this servant, and give it to the one with the tenbags of silver. 29 To those who use well what they are given, even more will be given, and theywill have an abundance. But from those who do nothing, even what little they have will be takenaway. 30 Now throw this useless servant into outer darkness, where there will be weeping andgnashing of teeth.’ 4 / 14
  • 5. Steve Winston answers:In Aramaic, the idiom used to describe sin had economic implications. There was no way to talkabout sin except through the metaphor of debt. The way in which we talk about somethingobviously affects how we understand that thing, therefore, in Jesus time, the idea of sin wasinseparable from the idea of an economy, or of debt. It makes sense, then, that many of histeachings equate the two.Thomas asks…Investing in the Stock Market?Hi. Im 20 years old. I want to know all about how to invest in the stock market. Whats thebest website to start an account with, is there one that doesnt have a ridiculous account fee?HOW to I invest in stock? About how much profit do you make, a little or a whole lot? Theresso much information on it, I dont even know where to begin to look. I need to know basics,about how much you invest, and how much you get back from investing. Do you get moneyautomatically? Details please. I really would like as much help as I can get. Thanks! 5 / 14
  • 6. Steve Winston answers:Read Investing For Dummies - its for beginners, and you can get so many questions answeredthoughan easy to read and understand format.Carol asks…best way to buy stock with little money?i got around 1000 dollar and want to invest to the market. im looking for the best way how! imgoing to just spend the 1000 dollars and not put month playments in. fees and commsion andmin ARE all important!!! 6 / 14
  • 7. Steve Winston answers:Whatever you want to buy, timing is very important.You MUST get in the market at the right time and get out of it at the right time ( so you can buylow and sell high)To do so you could use the free services on http://www.mystocksignals.com/ that provide freebuy and sell stock signals. Subscribers also get full chart analysis on any stock market.Maria asks…How to Make a Little Money?Hey guys, I would like to make a little money... Not crazy money, but just some so I could goto the movies when Im offered. There are some things that I would like to set as guide lines.1. It shouldnt be something like a lemonade stand... (LOL)2. Id rather if you didnt tell me to " Invest in the stock market"3. It cant be a website. (This includes scams)4. I encourage that it is something I could do math with... Such as calculations and percents...When you are commenting please check and make sure that what you are offering is somethingyou would do if you were in my position.Thank you in advance! 7 / 14
  • 8. Steve Winston answers:Check out www.mauthor.wordpress.com, maybe you might get idea on how to make a littlemoney. Hope this will help you outKen asks…starting in the stock market?So i was interested in starting in the stock market. I am pretty young, 21, and dont really knowhow to go about it. Ive done a little work with stocks and stuff in my econ class in high schoolbut very minimal. i would only start with $100-$200 or something around there but i wanna get afeel of it b4 i invest anything more than that. I know the risks of losing it all and i would not putmore money in then i can afford to lose and not affect any other aspect of my life other than alittle disappointment. Now the part that confuses me is how to go about investing. Im guessingyou cant just invest in a certain stock without going thru a company and probably paying them.What would be the best option for me to pay the least amount to a company to get going. Iknow i dont have much money so id rather spend it actually investing then paying fees toinvest. Any help would be appreciated thank you 8 / 14
  • 9. Steve Winston answers:I dont think you are going to do anything. You are still in the "wonder if I could," or "wonder if Ishould" phase, rather than actually taking the first step, or trying to actually learn something.Instead, youre trying to get around the system on the cheap, asking the wrong questions.It is possible to buy stock directly from some companies, for those few that are set up to do that,but you wont get the market price, it will take numerous phone calls and mailings and severalweeks, and generally is a big hassle not worth the time.You cant access the NYSE to trade without a membership, or a contract with a member(broker). Currently, a membership (seat) is about $850,000.Brokers fees are so small right now, less than $10, its really the only way to go; online that is.But even then, you would start out with a 5% loss.Even if you had more money, what you should be doing is getting books from the library andstudying. It is a fascinating subject. Then you can develop a plan, and eventually a system totrade.Then you could trade free on a simulator for several months at Investopedia.com, and when youstart making "virtual" money, you can risk your own.Or you can jump right in there and blow your $200. Ill sure take it from you, and theres a wholesystem out there designed to do just that."Which Is Better, Buy-and-Hold or Market Timing?""Do You Have What It Takes to Be a Market TimerThe Beginners Bible in Technical Analysis is:Edwards & McGee"Tech. Anal. Of Stock Trends"Droke, ClifTechnical Analysis SimplifiedKahn, Michael N.Tech. Anal. Plain & SimpleKamich, Bruce M.How Technical Analysis WorksLefevre, EdwinReminiscences of a Stock Operator 9 / 14
  • 10. Lofton, ToddGetting Started in FuturesLowenstein, RogerBuffet (Warren)-The Making of a CapitalistONeil, William J.How to Make Money in StocksOz, TonyHow to Make Money From Wall StreetRotella, Robert P.Elements of Successful Trading, TheSchwager, JackStock Market WizardsYou need to do the work first, learn a few terms, read a few books, which you will have to doanyway. Go to the library, and browse through the row upon row of the subject. All of thesequestions will be answered as soon as you take the first step and read a beginners guide toinvesting.Try to determine your time horizon. Short-term, long-term?Take a look at charting and Technical Analysis for following trends in the markets. Why wouldyou own a stock that is in an obvious decline?Realize right away there are two sides to the market, not just the upside. What goes up,eventually comes down at least part way.Learn how to analyze risk, and make this your primary approach, not by compounding profitsand erroneously analyzing how much money you can make. For example, most traders dontmake any money at all; more than 80% blow out.Learn about money management techniques, and maybe youll stick around awhile.Try to find these books:They say "Buy and Hold" for the long term is better, but that depends on when you get in, andwhat your definition of "long term" is. The phrase "Buy low and sell high" infers that you buyafter a decline; but how much of a decline? If you had bought after a 1000 pt decline in the Dowin 2000, you would still be waiting to get back to even, six years later in most stocks.How to start trading online:http://www.bernanke.cn/stock-trade/...Http://www.stock-trading.jims-info.com/....Http://money.howstuffworks.com/......Http://www.investopedia.com/ 10 / 14
  • 11. http://sharebuilder.com/www.stockcharts.comCharles asks…Why does a Stock Market downturn affect Corporate Layoffs?Every time I hear about the Stock Market plunging, I start hearing about mass layoffs andeveryone starts working about their jobs. But why? If a corporation makes its money on sales,what difference should it make that their stock has dropped? The two seem unrelated.The only cause-effect I can trace, with what little I understand about the economy, is thatstock investors sell their stocks when they see stock values plunging, but also stop buyingthings. They stop buying things, companies stop making as much revenue, and when they stopmaking revenue they lay off employees. But is it really that fast? Are there really that manystock-investors supporting the revenue streams of that many companies? A majority of thepeople I know dont invest in stock at all. The only stock I have is indirectly through my IRA or401-k, and they just sit out there going up and going down and going up and going down like atide, having no influence on my buying of consumer products and services.All these corporate layoffs seem to have begun almost immediately after Lehman Brothersbankrupted. Why should unrelated corporations care that a bank went bankrupt? Arent theymaking their own revenues selling their own wares / services? If they are laying off "unneeded"workers, gosh, isnt that something they should have done before? Or golly gee, maybe theyshouldnt have hired "unneeded" workers in the first place? Seems a lousy way to run yourbusiness to suddenly "trim fat" when you shouldnt have had any fat to begin with.The auto makers are suddenly in all this trouble because people are buying less cars this year? 11 / 14
  • 12. So what? Why do we have to reach into our taxes to help them?I also understand the reciprocal affect: reports of mass layoffs could cause stock market todrop because the stock market is affected by perception. Because it is based on perception,the news media actually makes the stock market worse by reporting how bad everything is,and everything gets bad when the stock market gets worse. Its like a psychosomatic tailspincaused by this tango between the news and the stock market, and the news will certainly notown up to having any part in this.But I do not see the reverse: why would the stock market drop cause sudden mass layoffs?Sorry this was a bunch of questions, but maybe someone can set me straight categorically.(While were at it, why would the price of oil drop so drastically at the same time? Is there a linkwith this particular economic downturn or is that coincidence?)Steve Winston answers:The two are related - but you seem to have missed the relationship.Stock prices go down because the profits of the publicly traded companies are expected todecline. Company have lay offs when their profits are declining to cut costs.The stock market tries (and sometimes succeeds) at predicting future profitability, whilecompanies often respond to profit shortfalls after the fact. 12 / 14
  • 13. Michael asks…Need help with E*trade and the stock market, New to it.?Im really interested on investing in the stock market, long-term. Im planning on just buyingone share to start with and seeing what happens from there. Can someone tell me how to useE*Trade? How much I have to start with? When I do earn money what I can do with it? Is themoney for me to keep? Am I locked in to trading or do I just sell my shares and I free from thestock market? If the stock I own fails do I have to pay anything. Im new to this and I have anaccount with E*Trade with no money or even started anything yet, I just got the account to getfamiliar with the links and view of it. I know how the stock market works a little but not tomuch. Any info will be helpful.Steve Winston answers:Okay, when you put some money in the account it will stay in your " cash" portion until you buysome stock.... Then the value of your stock will rise and/or fall during each trading day.... Whenit rises and you look at your "portfolio" , your account will be worth more...now anytime after thatyou can sell your stock and that amount goes back into your cash... ( you cannot buy again withTHAT money for three days ... If the amount left in your account after that first buy is enough tobuy more stock you can use that portion... " day-trading" is NOT for small accounts )You can withdraw from your account whenever you like...as long as you maintain a certainbalance Id guess about $500./ $600.If your stock loses money...you are " out" that much...rarely does anyone " loseeverything"...and you do not owe any more money..its just that some of the money you used tobuy the stock is ..poof!...gone. Same as with a gain, you can sell your stock and " take the loss" 13 / 14
  • 14. and what money is left will go back into cash...for you to buy something else..in three days ..after the transaction is " settled. Does it sound complicated...it really isnt...but if you log in to: http://www.top10traders.com/ ...you can open a phony account to learn a little about buying and selling,,, I hope you figure it out.... I think wayyyy back in some of my answers I told someone more about how to actually buy and sell on E*trade, stuff like market orders, limit orders, etc. Maybe you can look back to find it.... Figure to start with about $ 500. If theyll let you...and youll be looking to buy maybe 10 or 15 shares of something in the 9.00 to $20.00 range.... Do you know how to use finance/yahoo to get quotes, etc? If you do look up some of these : ICO...HTE..XSI...TITN..BZP..SGIC..SNS.. They are " in" all different things, but all pretty decent, with a low share price right now. Couple more: QCOR..FINL...TSYS Powered by Yahoo! Answers Read More… 14 / 14Powered by TCPDF (www.tcpdf.org)