Ken asks…
In finance class we are investing in stocks. What are some of the most promising stocks for the next 16 weeks?
This is by no means a real investment, but it is a competition however, and our teacher said we could use our resources to research stocks. So I figured I would try and get the opinions of some possible professionals… Thank you for your suggestions!
Justin answers:
Id go with AT&T personally, its priced relatively low for the yr, the moving averages indicate it should go up at least temporarily, and because they just gave out the dividend its down even more to make up for that, plus it should have another dividend payment in that 16 wk period, and thats a guaranteed 1.5% increase if your teacher is counting dividends, id say it’d be up 2%-8% actual price depending on a few factors and if your teacher counts dividends after the 16 wks
James asks…
What are some statistics to look for when investing in stocks?
I’m looking for some stocks that I can invest in long term. What are some key stats to look for? Such as EPS, P/E ratio, beta, etc. What are the most valuable factors and good numbers to look for?
Justin answers:
The main thing is that you want to look at where a stock is going in the future, not so much what it’s done in the past. What does the future hold for the company going forward is one of the most important stats.
EPS (earnings per share) is a huge factor but it also must be compared with how much debt the company has on its balance sheets.
Watch insider buying as well, if a CEO for example is buying shares of the company for his own personal account, that could be a good signal.
PEG is also important this is the price to earnings growth and is determined by multiplying the analysts estimates for next year by the projected five year growth rate.
In Yahoo! Finance, the stock quotes have a link of the left hand side to “key statistics” and they include some of the important statistics when examining a stock. For example, the link below shows some of the key stats for Chesapeake Energy Corporation (CHK)
http://finance.yahoo.com/q/ks?s=CHK+Key+Statistics
Robert asks…
How or where do I go to start investing in stocks?
I want to start investing, even if wont get me big buck at least a couple hundred.
Justin answers:
An introductory book like _Stock Markets for Dummies_ is a good place to start. This will give you a basic explanation of most things there are to know about the mechanics of stock investing including useful websites to surf.
Investors Business Daily (IBD) is a solid daily resource (and its complement, www.investors.com ). It’s a better newspaper than the Wall Street Journal and it is built around a particular approach to trading. You could read _How to Make Money in Stocks_ by William O’Neil too–he’s the founder of IBD.
Search your local library for other books on stock investing. Try to absorb as much knowledge and understanding as you can.
After you have extensively researched and gained a solid foundation/education then look to open a brokerage account and paper trade–this is trading with play money before you put real capital at risk. You should do extensively before you eventually place your first trade live. Your early live trades should be with a very small position size. Only increase position size when you have done well to limit losses when the market has turned against you.
Joseph asks…
How much should you start out with for investing in stocks?
I want to start an Ameritrade account or one of the other brands of online investing. What’s a good amount to get started?
Justin answers:
You really don’t need that much money. $500 is plenty to get involved. But you have to be wary of the fees of buying and selling the stocks. No Load (no fees) mutual funds are still good despite the problems with them. But you have to do a lot of research watch a lot of business progams before investing in anything to see what the “experts” think. CNBC, Bloomberg and Fox business block saturdays are excellent for picking information. One place I recommend for starters is http://www.marketocracy.com no risk all play money but the stocks are real. And its free to enter.
As far as this sitesled.com goes its more of a question an answer for basic use. The poster needs to start reading these questions before babbling about this site. The question here has NO USE for the site you recommend.
Johnny it may be $4 to buy but nearly $15 to sell. Better options than that out there.
Richard asks…
What’s the best way to start investing in stocks without much money?
Are penny stocks any good to get into? Do I need a broker?
Justin answers:
For a person without a LOT of experience/knowledge in/of the stock market, penny stock are the WORST way. The best way is a well diversified index mutual fund, Schwab has a $100 minimum on theirs.
Michael asks…
How does one go about investing in stocks?
Is it a smart thing to do?
Do you profit from investing?
This question may be silly to some, but Im only 22 and Im curious to know about investing.
Justin answers:
You need to open a share dealing account with your bank but I would reccomend that you wait for the market to sort itself out. Wait for a couple of months and then invest because at the moment every day companies all over the world are going bust.
George asks…
Should I start investing in stocks now or later?
Due to troubles with markets everywhere, I am faced pondering about the question “Should I start investing now or later?” I am fairly young, meaning I have a lot of time and can handle high risk, and understand the historic growth rate of the economy, but was wondering if I should wait until the problem in Europe is resolved, or start investing now? Or are there other problems in the world that I should wait for to be resolved?
Justin answers:
The fear is factored into the price of stocks. If you wait until everything is just fine and dandy, then stocks will be overpriced. If you get in while everyone is afraid to buy, you can get some bargains. You get paid for risk, but you can lose everything. Thats why you’ve got to find solid companies that can whether storms. If you’re looking at Europe, look at Unilever (UL) although its price is not so cheap right now. TEsco (TSCDY) in the UK is pretty damn beaten up and Warren Buffet’s got a whole hell of a lot of it.
Donald asks…
how to start investing in stocks?
i want to start investing in stocks. i don’t know how to do it. should i first get a demat account? what to do after getting that account? i have a pan card.
Justin answers:
This is probably one of the most common questions I hear every day. People always ask me 1 of 2 things. How do I get started in investing? Or, how much should I start with?
To get started in investing, the best advice I can give you is EDUCATE YOURSELF before you do anything. I’m not saying you have to be a wiz to start, but don’t just jump in blind. That’s the express way to the poor house. So I suggest you learn the basics and don’t get ahead of yourself by letting greed go to your head.
There are various ways to educate yourself as well. Read books, attend seminars, pay for classes, and get a mentor! Just do whatever you need to do to learn more. Even though I’ve been doing this for more than 5 years, I still read every day and study new strategies, chart patterns and so on.
Second, don’t get discouraged when you first start investing. I say this because you will make mistakes. Sometimes costly ones to. I made mine. You will make yours. It’s like driving a standard car for the first time. Everyone stalls out. Even if your confident and know what you’re doing by the book, you don’t have the “feel” for it yet and so you will stall. No and’s, if’s, or buts’ about it.
Again, several ways to get around it, but it’s not going to be free. You have basically 2 choices, and I tell this to all the people whom I manage accounts for: you can either face it head on or take the knocks that are coming to you, or, you can pay someone like me to help guide you through the learning curve so the knocks won’t be so hard. Either way you look at it, you’re going to pay a price. In investing, there are 2 terms that investors use: “the dumb money” and “the smart money”. Dumb money is the crowd of investors who are new or don’t know what they are doing yet. The smart money is the investors that take the money away from the dumb money. Which one are you? Or where do you want your money to be?
For the second question, how much you should start with. Well that depends heavily on your financial situation. Although the more the better. For anything less than a $3000 start up, I suggest IRA’s, CD’s, BONDS, or SAVING CASH. Why at least $3000 well its simple, without at least that much in your account, it will be difficult to make money in a down market. Yes, there are ways to make tons of cash when the market is crashing. In fact, it can easier and faster to do than making money in an up market. But I won’t get into that here.
Anyway, if you don’t have money and still would like to try, then I highly recommend paper trading. Why? Well its good practice for when you do get money. I used to paper trade just for the practice. See how good my decision making skills are. Which brings us back to question one, and what you are doing right now, LEARNING! But remember, it’s not going to be free and it will cost you whether you pay for the education or you learn the hard way. Either way, just like Nike says, “Just do it”
Much Aloha,
Christian Nago – CEO & Chief Investment Officer
http://www.intrepidtradings.com
William asks…
I want to start investing in stocks please help?
I’m 16 and when I get a couple thousand dollars I want to invest in stocks. I have little to no idea what to do with stocks so can someone explain the basics or recommend books about it would be really appreciated. Thanks in advance
Justin answers:
In North America you must be 18 years of age to open a brokerage account. You can have a parent open a custodian account for you using your social security number and when you turn 18 the assets in the account can be moved to an account in your name
Before you spend $0.01 on any investment, you must know what you’re doing, why you’re doing it and how to do it. Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.
Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.
Here is some reading material that can get you started in the right direction,
Beating the Street by Peter Lynch
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
From Riches to Rags, by I.C. Freeley
Millionaire Traders, Lein & Schlosberg
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Intelligent Investor, by Benjamin Graham
Common Stocks, Uncommon Profits, by Philip A. Fisher
One Up on Wall Street by Peter Lynch
Stocks for the Long Run, by Jeremy Siegel
The Interpretation of Financial Statements by Benjamin Graham
The Lazy Person’s Guide to Investing by Paul B. Farrell
The Warren Buffett Way by Robert Hagstrom
Trading for a Living, by Alexander Elder
Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt.
What Works on Wall Street by James O’Shaunessey
You Can Be a Stock Market Genius by Joel Greenblatt
Your Money and Your Brain by Jason Zweig
Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. (http://moneycentral.msn.com/home.asp , http://finance.yahoo.com/
Other website that can provide instructions and help with procedures and terminology are Investopedia – http://www.investopedia.com/ http://www.investorshub.com/
Visit some of the more professional websites like Zacks Research – http://www.zacks.com/ Smart Money – http://www.smartmoney.com/ Schaeffer’s http://www.schaeffersresearch.com/ Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it. Or you can meet others who are trading at http://www.moneyshow.com/main.asp
Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses. Try to get some fee information from the stocks exchanges they all have (had) free booklets, SIAC and some of the regulators (FINRA SEC MSRB CBOE) may provide some free literature.
And when you think you want to invest/trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ and/or http://www.tradingsimulation.com/
You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest.
Good luck on your journey, study hard and you’ll invest well
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