1. Your Questions About Two Ways To Make Money In The
Stock Market
William asks…
How can I make my money grow?
I have a small savings of a few thousand dollars. It is now sitting in an interest accruing
checking account as well as a money market savings account. The only way to experience any
returns on these two instruments is by waiting for a long time. It seems like i will have to wait at
least a year to see any substantial interest. Is their any other way that I can invest some of this
money in order to receive a quicker return? Im not interested in the stock market, or putting
the money in a long term bond or anything like that. I would say my risk tolerance is very low,
since this money is basically my life's savings. Im willing to except a lower return in lieu of
higher risk. Any pros out there can help? thanks!
Steve Winston answers:
There are several low risk mutual funds that you can try from
Vanguard, Fidelity, American Century. A company rep. Will be
glad to help you find what you want. If you are still working I would
strongly suggest you invest in the fund you choose, using a
Roth IRA for your retirement.
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2. Jenny asks…
how do I invest my lotto winnings in the stock market?
I have about two to four thousand dollars that I want to invest in stocks or mutal funds that will
double or even tripple when this recession ends. how do I go about making my money work for
me in this way?
Steve Winston answers:
A couple of things:
Don't worry about doubling or tripling your money. Worry about keeping it. Invest in a company
that you are 100% sure is not going to go under, like Disney, Wal-mart, GE, Exxon, or other big
name companies. They will pay dividends while you wait for the market to recoup its losses and
are not likely to go to Zero price.
Forex is the quickest way to not only lose all of your money, but to wind up owing more of it.
Avoid it.
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3. I would go with oil stock or other resource stocks.
Steven asks…
Does oil "exploration" include drilling?
This description says YES:
"Here's a way to make millions of dollars from the oil boom with little money down (and a
lesson in the economics of oil exploration). Step 1: Start an independent exploration company.
Raise $10 million with a listing on the Toronto Stock Exchange or London's Alternative
Investment Market (AIM).
Step 2: Negotiate an exploration license with a national government to DRILLS WELLS off the
Gulf of Mexico, in Papua New Guinea, or in another far-off locale. Governments are keen to
cash in on the high price of oil and lack the expertise to develop their reserves themselves, so
they are fond of royalty agreements or production-sharing agreements, which require them to
put no capital down, and encourage investment in exploration, in exchange for a share of
revenues once production is underway.
Step 3: DRILL four wells at a cost of $2.5 million each (the average cost of drilling a well in
2006).
Step 4: Suppose a 50% success rate for prospective WELL-DRILLING, which means you've got
two successful WELLS on your hands. In 2006, the average successful well DRILLED by
"independents" contained 160 mboe (million barrels of oil equivalent), so you've now got 320
mboe in reserves. These reserves are under the ground, without any equipment to extract them
or pipelines to distribute them.
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4. Step 5: Sell your WELLS to a "major" (e.g., Exxon Mobil (XOM), BP (BP), ChevronTexaco
(CVX), Royal Dutch Shell). The typical selling price, depending on location and degree of
certainty in reserves, is roughly $10 per boe of proven reserves. At 320 mboe, your two
successful WELLS are worth $320 million.
You've turned $10 million into $320 million in as little as a year!"
http://www.wikinvest.com/wiki/Oil_Exploration_and_Production
Steve Winston answers:
You're kidding, right ??
Donna asks…
Advice on the stock market?
17 years old teen in Indiana,
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5. I have been very curious about the stock market recently. In school I've learned that almost all
successful people did one of two things on their way to success. They either worked part-time
as a teenager (I've got that down), or they took money out of every single paycheck to invest,
or they did both.
I've come to realize that I have a better chance of becoming successful financially if I make
more money while I sleep. Investing. I want to start further researching the stock market, so
that I can better understand it when I actually do graduate college.
I have been tracking certain stocks for the past couple of weeks and I put them into a
spreadsheet. I gave myself 15,000 fake money, and bought stocks. over the last 5 weeks, my
predictions have been relatively accurate, bringing in about $400.00. however, I don't want to
risk real money just yet since all of my experience is self-taught and completely safe.
Where should i start researching more? i'm not looking to become a billionaire, i just want a
financially sound future. one where i will not have to worry about money as often as most do.
Steve Winston answers:
Congratulations on deciding to make your money work for you as well.
Start with some basic books to teach you the fundamentals. Two excellent reads are The
Complete Idiot's Guide to Investing and Investing for Dummies. You can probably borrow them
from your local
library.
You need to learn also some important concepts in investing, such as dollar-cost averaging and
compound interest - two of your best friends to make money for the future.
Then you need to answer why you are investing. Different people have different goals. Is it for
more income? For retirement? For your education? Plus how long do you want to invest? How
much risk are you willing to assume?
These are all very critical questions and they will determine what kind of investments are right
for you. Don't believe anyone who has a "one size fits all" kind of investment. For stocks
5 / 11

6. typically you are talking about at least a 5 year investment period. If less, consider getting into
bonds or a bond fund instead. Many people choose an appropriate mix of the two.
If you want to get into the market but don't know what stock to pick, consider an index fund or
ETF. Instead of throwing all your eggs into one basket (one company), index funds can invest
you in dozens, hundreds, or thousands of companies all at once and so there is less risk. This
protects you if any one company or industry runs into trouble. For bonds, the returns are less,
but more solid.
If you are thinking of retirement, consider a Roth IRA. Your money grows tax free, and when
you retire you can withdraw it tax free as well. At your age if you invest wisely you can save up a
fortune.
And with people living longer, you will need one too.
You first need to pick a company to invest through. Some of the best are Vanguard, T. Rowe
Price, Fidelity, and Schwab. Avoid the big banks like the plague. Don't let them rip you off with
loads (sales charges) and fees. Check how much the company charges you as an expense
ratio. A good one might charge you 0.2-0.8 %. If they charge more than 1% than go somewhere
else. And if they charge any kind of 12b-1 fee, hold on to your wallet and RUN.
For more information, try looking at
https://personal.vanguard.com/us/funds/vanguard/all?sort=name&sortorder=asc
and play with it, comparing funds with more or less risk.
Do some reading online such as
http://www.vanguard.com/us/insights for some important investing truths.
Mandy asks…
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7. Has anyone seen the connection between stock market declines
and Obamanomics?
After two years of campaigning talking down the economy, and eight years of fighting
republican attempts to get Fannie Mae and Freddie Mac under control, (Ron Paul warned over
ten years ago, no one listened) the democrats are now calling anyone who says negative things
about the economy unpatriotic. Sure giving banks more money and forcing them to make more
risky loans will somehow work better this time than last? Thats like creating peace in the Middle
East by importing thousands more Hamas supporters, more people to dance in the streets if we
suffer another 911? When Uhbama won, the market hit record lows, clawed back, he unveils
his economic team, and his plan, and now the market has hit the skids. Time will tell, but
paying off half the deficit (unless Uhbama just means the "inherited" deficit, not his new
spending) is impossible without taxation, market manipulation and confiscation never seen
before in our country. I will glady, over joyously, like to be wrong. Since we first heard of
Uhbama my IRA has gone downhill. But I'm just bitter because I didn't get a loan to buy a house
I can't afford. But this way the Hamas supporters will have some place to live, on taxpayer
support of course.
Steve Winston answers:
There is none.
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8. Laura asks…
how do i successfully research stocks for myself?
I wish to start testing the stock market waters because I know being a young investor can be
beneficial.
At this point, I'm only slightly familiar with 'volume', the three types of stocks (penny, growth,
blue chip), and the two general methods of making money (dividends and stock prices rising).
But everything else -- especially detailed researching is extremely foreign to me. I'm tempted to
just take internet advice, but I know that is not the most secure way to decide where to place
my money.
Yet besides reading opinion articles, I don't know which pieces of information about the
company to search for, and furthermore, I have no idea about how to put these pieces of
information together to form a comprehensive opinion about a stock.
Any tips about researching stocks -- especially how company history etc-- plays into the mix are
welcome.
Thank you all in advance!
Steve Winston answers:
I hate to bring you the bad news but, it is very hard to SUCCESSFULLY research stocks by
yourself. Unless you have a degree in finance; like I do. The best thing you can do is to invest
your money in a DIVERSIFIED PORTFOLIO. Don't try to buy one stock because you've heard
some news of it and it seemed interesting, or if the stock was recently upgraded by big name
investment banking firms like Goldman Sachs, Morgan Stanley, or Bear Sterns.
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9. The fact of the matter is that it is VERY RISKY to do that. You can lose a lot of money that way.
It's too risky and not worth it. Imagine how you would feel if you invested $5000 in a stock and
then it drops down to $2500 in a week.
Best thing to do is to build a portfolio of stocks (using several industries) which are diversified
and carry a very low risk. There should be at least 14 stocks in your portfolio. Ideally, there
should be 30, but not many people can have enough money to buy 30 different stocks.
However, if you really want to learn how to research stocks, then I suggest studying applied
equity valuation methods such as the EP or the DCF models.
Linda asks…
When my lease is up should I work two jobs and use my my car
and van for a home over the road.?
I already have a job from 530pm to 1100pm and I get paid 220 a week off that after tax. Another
job for 8hrs a day would only make a total of 13hrs of work a day 5 days a week. I could use
the gyms to shave and shower. I could change cloths and sleep about 7hrs a day in my van
and use my car for driving to work and back to my van and for leaving the city over the
weekends. I could spend my weekends hiking and fishing at the national forest trails for free. I
could save 1500 a month after tax pretty easy right now. I could save up to 50,000 this way in
two years with a little luck in the stock market which I have always been very successful in. I
could save that kind of money in two years and buy a place to live first instead of paying rent
and then go to college full time with the money I have for that about 30,000 that I can use for
another 9yrs without penalty for waiting.
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10. Steve Winston answers:
Maybe you could just live in a van down by the river!
Maria asks…
Investing 20k in todays market and economy?
I have saved 20k in the last 2 years. My money is sitting in the bank in Cd at 3.4% interest for
1 year. I have read few other similar questions but they are 2 years old and the economy has
changed on the past two years. I wanted to know what other ways are out there to make some
more money in 1 or 2 year period. Is the good time right now? I will take a midum risk. I dont
have any experience in stock and mutual funds so any answer in details will help. By the way
im 22 years old.
Thx in advance
10 / 11

11. Steve Winston answers:
If you think about it, you can make excuses all the time why the market isn't a good time to
invest.
Consider back when Reagan was president. Mortgage rates were around 12-16%, and if you
didn't have a 20% down, you wouldn't own a home. So people felt that it was a poor time then.
The great depression? Well that was a bad time to invest as well.
However, if you consider people at those particular times that did invest. Well they are
millionares four times over now.
Risk is a funny thing, and it's everwhere. But, only you know what makes you happy. There is a
up and downside to everything in life. If I told you, that this year you would be in the highest tax
bracket possible, would you be happy or sad? Well, what if I told you that you made 5 million
dollars? So it's all relative.
Now consider keeping 6 months of your living expenses in a relatively safe investment. A cd, or
AAA rated bonds would be safe. Then, if your debt is minimal. Venture out a little more. Educate
yourself on an investment strategy, and a sale strategy. For every entrance you have to
consider an exit.
Most people that are contrarians, due quite well in the market. So be greedy when others are
being fearful, and be fearful when others are being greedy.
Read about Vanguard funds. If you have specific questions, no matter how strange they appear
to be. Call them, and speak with a representative. They are an excellently managed company,
and have been around for years. There first fund was started in July 1, 1929, so they have seen
every financial market possible.
Good luck
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