Money Forum World

DetroitBlazer · Joined: 08 Nov 2007 Posts: 2112

I really want to invest in stock but I guess I just dont understand the idea of it still. What is the point in purchasing stock? How do I know how much my stock is worth? I really dont really have that money till I sell the stock right? I mean, I cant just take some money out as if it was an ATM, right? How do I know how much I'll sell it for? any basic info you may be able to give me could help lots. Im trying to learn but its kinda hard to find info in words that I can understand

endo · Joined: 08 Nov 2007 Posts: 2081

People make money from dividends and selling stocks depending on inflation and emotions. You could want to purchase stock when you have taken these things into account and are wanting to risk your stock investment in return for a greater return on your money.

Most businesses pay no regular dividends and those that do, pay little like interest on a bank account. The reason you could rather own stock than a bank account, is you're expecting a greater return depending on a greater risk of losing some or your investment in the stock market than with a bank account. usually, those businesses that pay regular dividends are earning the markets confidence that they continue to pile up so much cash they have to give it away. if you invest in them for ten years, then sell, you may be able to make profit both on the dividends and the get in value when you sell. This is a sound way of earning money in the stock market.

By inflation, I mean regular inflation of wages and prices of stuff you purchase, that also raises the value of everything up the ladder, as well as businesses in the stock market. I also mean inflation that comes from a population that continues to grow and finds it simple and more tax advantaged to purchase stock, like through 401Ks and IRAs. as well, look at the dates of the mutual money on your 401K offering and see if you may be able to find any that were around throughout WWII. This hypothesis suggests you may be able to expect some in general growth in the stock market over time. Some will go up, some will go down. make sure to broaden by purchasing more than one mutual fund and be sure they're in different groups, so you'll have some that go up to go with those that will go down so in general your investment will grow over time. Notice I said mutual fund. clearly, you're a novice so should purchase mutual money now, stocks once you feel comfy with a broker or advisory newsletter, and avoid goods and alternatives because they are so high risk with less ownership than stock and are so more gambling than investment.

Much more money is most likely made or lost on emotions. One example is the stock market changing depending on some economic data. That seems right. Then people continue purchasing and selling because they're emotionally attached to the trend. Have you ever played a car race video game where you're racing along, faster than you may want to, and when you come upon a curve, you start to slide, you get worried about crashing so you counter steer, but you over corrected, so you steer back the over way, and discover you over corrected again? The stock market has thousands of people doing the same thing every day. they're going too fast, the market corrects, they worry about a crash, and they over correct. People are purchasing and selling depending on the emotional sales pitch of a broker, 401K enrollment, relative, friend, email, or ad. Look at how many answers suggested particular businesses to purchase or brokers to use. One of them stated her affiliation to her recommendation. The others didn't state their affiliation. They may be brokers or they may just be happy customers. I tell you to steer clear of particular suggestions. Do an internet search or a review of a 401K listing and pick out mutual money that have good track records. Good track records don't bring guarantees of future success, but if the Yankees have been to the playoffs more than the Devil Rays in recent years, which team do you think has the better chance this year? as well, only look at three five years so you dont get a fluke and you dont get a past perennial that hasn't done so good recently. as well, if a mutual fund did well over ten 20 years, the fund manager may retired, been promoted, or lured to another company for higher pay. So stick to a three five year measurement.

Stock is easily calculated by the stock market and stated in the daily papers and the internet. It isn't like a car, art, rare coins, antiques, and real estate. You generally know what stocks are worth. Expect to lose a little when you sell stock, just like everything else. The person purchasing or selling wants an incentive and there are typically transaction costs too. if you see XYZ stock is trading at $40, and you have $1000, you may want to purchase 25 shares, but the person who owns it could offer it for sale at $40.25 and the broker wants $15 for handling the transaction, so you could only wind up with 24.47 shares now worth $40.25 apiece for a total of $985. If you think you want to sell them, somebody may offer you $40 apiece for them, and the broker will want another $15. if you sell them, the broker will return to you $963.88. So you could have paid and got back close to what the stock was worth. You also could have lost only because you didn't let it sit long enough for others to keep bidding up the price. It was only influenced by your activity that raised and lowered the price.

You don't have that cash readily available like withdrawing it from an ATM. Since you could lose a little every time you purchase or sell like I clarified above, it shouldn't be fluctuating with withdrawals. Your investing approach should be an expectation of keeping that stock in there for at least a year. You could use your 401K where your employer pays all those transaction costs and the money is subtracted before tax is calculated so you may be able to pay for to invest more than if it had been taxed. If the rate coming out of your check is too much, then you may be able to change it or stop it all together till you may be able to add to it again. meanwhile, you shouldn't withdraw from it, but can on occasion borrow against it, if you really have to and can pay for to pay it back on a regular base. think about that procedure typically charges you transaction costs.

You didn't ask the hardest question of all: when to purchase and when to sell. that's hard to answer, but you have to know something about that too. just, you may want to purchase depending on meaningful statistics. You shouldn't purchase depending on proforma, projections, or forecasts. Those aren't statistics but guesses and marketing ploys. Meaningful is hard to define. One statistic isn't enough to be meaningful. Recent profits are the best measure, unless there's a pending investigation by the SEC, IRS, FDA, or another governmental entity. Comparing profit/earnings PE ratios to other businesses in their business is a great tool, but isn't the best when the whole business, say technology, is overpriced. The other top measure relates to cash, like debt to equity percentage. The disadvantage to this is some businesses, like tobacco, have great cash ratios, but may not be the sound investment for the future. So get more than one measure from the internet. Maybe stick to a rule like each of the above net earning, P/E, recent news, debt/equity must compare favorably to competitor and to the market all together. To compare to the market all together, you may research the brand names of the stuff you purchase, the stores you visit, and the restaurants you enjoy and use some of them as benchmarks. You may find that company that gets so most of your business is a good stock purchase just ripe for the stock market to go wild about.

The last thing, is you may want to sell the stock or mutual fund when you not could want to purchase it if you had the money to invest . for example you could sell if the measure you used for purchasing the mutual fund is below average, or the great P/E percentage is too high, or a meaning they lost money and there's no profit .

tkyoshiy · Joined: 08 Nov 2007 Posts: 2089

You have to go talk to someone at a bank. I recommend JPMorgan Chase. I'm a licensed personal banker there and I answer questions like that all of the time. Stocks aren't a get rich fast product. How long you hold your stocks is what will make you money. Go to Chase and ask to talk to a PB there's no charge and they can clear things up for you

Minnie Anderson · Joined: 08 Nov 2007 Posts: 2138

You can make money in three basic ways with stock.

1 purchase low, sell high. Capitol gains. This is the common technique.

2 Dividends. Some company return profits to holders via the dividend procedure.

3 Owning enough of the stock to squeeze the company to get you things, like the CEO position.

In all cases, you have to know exactly what youre doing before you try to do it. Dont stop here. Go read everything you may be able to about stocks before you use up any money. Use s finance area, it's excellent.

RaySingle · Joined: 08 Nov 2007 Posts: 2114

I propose you visit vanguard.com for some basic info. I also propose you hold off purchasing an individual stock till you get to know the market, and your reactions to what happens in the market, lots better. But for a fast response:

When you purchase a part of stock you become a part owner of the company and share in the good and bad depending on how other stock holders view the company.

Buying the stock at the market means some other shareholder is wanting to sell you their shares. The value of the stock is depending on the value others in the market place on it. If they like the stock they'll bid the price up. If they think the companys prospects are poor, the price of the stock will fall to the point where someone thinks it's a good value because it's now cheap . Unfortunately, the stock may also lose all of its value if the company goes under.

So you make money one when other people want to purchase the same stock and bid up the price, and, two if the company pays a dividend, which is a cash reward to shareholders paid from the companys income.

Ive found its tough to learn the basics about the market without also to get a sales pitch. At least at a no load fund family like Vanguard, the sales pitch is a bit subdued. Good luck.

Anton Wolf · Joined: 08 Nov 2007 Posts: 2111

Read everything you may be able to about investing. There are lots of investing strategies out that, some complex, and some aren't. My advice, model your trading activites after what the historically successful investors have done. Read about Warren Buffett, Benjamin Graham. The Intelligent Investor is pretty much called the greatest book for investing. Its depending on value where you purchase a stock when its cheap and hold on to it.

Burton Burns · Joined: 08 Nov 2007 Posts: 2167

Here is the correct way to think about stocks or any securities overall : Replace the name of the security in question, if it be stocks, bonds, alternatives, futures, and put the name of a common produce of your choice.

Sounds silly? Not at all.

How much a stock is worth is determined by the same set of forces that establishes the price of a basket of tomatoes at the local farmers market. How much anything is worth depends on what you may be able to sell it for. How much you may be able to sell anything for depends on the forces of supply and demand.

Q: What is the point in purchasing stock?
A: to offer capital or means of financial support for elements of production like factories in the economy and earn a return the result you hope to sell it at a higher price afterward .

Q: How do I know how much my stock is worth?
A: The value of any item depends on the price it may be sold for – your stock is worth its current price.

Q: I really dont really have that money till I sell the stock right?
A: Right – unless the stock pays a dividend, in which case you get cash while owning the stock.

Q: I mean, I cant just take some money out as if it was an ATM, right?
A: you may be able to sell or purchase most stocks throughout the hours that the markets are open if you have to change your stock holding to cash

Q: How do I know how much I'll sell it for?
A: You don’t. The price performances of financial securities are random.

I can tell you about valuation models and basic or technical analysis, but you won't understand them without spending a 3rd of you life in school. Besides, they don’t really work.

Here is the basic stuff that will be indispensable, and is frequently neglected:

1 The stock market is like any other market, except that instead of purchasing physical products, the “goods” transacted in capital markets are claims on assets and future profits.
2 Risk and return is the same thing, as such, they can and should be interchanged in sentences to remind us of that fact. If anybody offers you a high return, it’s the same as offering you a high risk.
3 Returns are random. anybody telling you otherwise is either God or lying.

How to invest your money, that’s a different question. I invite you to look at some of the other questions I answered online, they can be of extra help.

Todd Burris · Joined: 08 Nov 2007 Posts: 2167

See below.

Jeanne Humphrey · Joined: 08 Nov 2007 Posts: 2164

get basic ebooks study charts

more on my blog

Mcknight ltd · Joined: 08 Nov 2007 Posts: 2170

You should understand the major reason why you want to use up money purchasing a specific stock. This step should preclude investing in stock. It lets you to move swiftly once the price of the stock goes down lots. If you know the major motivation about buying a particular stock, you won't hesitate to purchase it once the price falls. Stocks bought on the spur of the moment may be sold once the price goes down. But if you're purchasing it as devaluated stocks, you may be able to purchase more stocks. Hiring a stockbroker can benefit beginners to the stock investment as they give all the needed info about the stock to make the purchasing choice easy.
debt trap.com/category/Stock Inve.