Month: February 2015

We are looking at a total meltdown of markets as stocks reach record lows. Does this mean that stocks under 5.00 are the safest place for money? In other words, are micro cap and penny stocks really the place where we should be putting our money?

This is not an answer that can get a simply yes or no. First, I do not believe that a deep recession is the right time to invest in in the stock market for beginners. The reason being that if you invest when the market is tumbling down, you are forced to try and game the bottom. And investing in the stock market for beginners is tough enough to have not have to understand all the sectors and individual stocks that may or may not be at their respective lowest.

Again, I do not believe this is the best time to invest in the stock market for beginners. I will give a few things to look for before you begin thinking about investing in the stock market again. Before I do, let’s look at microcap stocks and penny stocks. Basically, let’s look at stocks that are under 5.00

Why would we want to consider stocks that are under 5.00? Simple, the market is at an all time low which implies that many stocks are horribly undervalued because average investors are panicking and dropping out of their shares left and right. This forces the prices to be lower than it should be. This means we have a lot of bargain stocks we can purchase for under 5.00

This is great because if you purchase a stocks under 5.00 then there is a good chance that when the market recovers, you will double, triple, or more, your original investment. A recession is really a good time for bargain hunters in the stock market. When everyone is selling in fear, you should be buying the creme of the crop with a huge grin on your face!

Remember that there is no safest place to invest money, and we have seen just that with the fallout of banking and real estate. Two the most commonly considered safest investment vehicles. So what is the safest place to invest money right now? Probably cash. Since foreign markets are seeing a similar fallout, the dollar is actually holding it’s own, and thus cash seems like the safest place to invest money at the moment.

But, if you’re an investor, then you know that the safest place to invest money is never cash because that means you are losing out on potential returns. So you should always have a discretionary amount of capital that you can invest with out worry. This is the money you should be using to invest in safe stocks for beginners. Stocks that are under 5.00 and really probably to return to significantly higher amounts.

The stock market for beginners can be deceptively frightening. Yes the market is in free fall. But now is the time to start looking at buying. Did I say time to start buying? No. Time to start LOOKING at buying. I personally do not believe we have hit bottom.

So how do we know we have hit the bottom and can then start buying stocks under 5.00? Well, let’s look at the order the dominoes fell.

Real estate hit us first. This would mean investing in REITs for the stock market for beginners crowd. Next we saw the banking sector fallout. Next we could see education, commodities, or something else. Who knows. But the point is, we are still reeling from the terrible loans that killed the stock market.

Why is this important for understanding the safest stocks for beginners to invest money? Well, it would be reasonable to see the dominoes come up in a similar fashion. Namely, the banks fell because no one wants to buy houses, which causes them to default on many loans. So banks are relying on loans to be made to make money. Loans being made means that people are most likely investing in real estate again.

So banks will probably recover after real estate. Just like the order we are falling into the recession. So, for my money, the safest place for money from an investor will be in REITs first. Invest in real estate when you start seeing houses on the market for considerably less time than we do now. When that happens we will know that real estate demand is increasing and stocks for beginners will include REITs that are undervalued. Best if the REIT stocks are under 5.00 and valued at 10.00 or more.

Shortly after we see a huge increase in REITs, look for banks to increase as well. Loans will be made and thus banks will become stronger and regain a footing. This will be the safest time to invest in banks under 5.00

Note that there are not many HUGE banks anymore. This recession has all but wiped out the weakest of banks. Look at the big names, pick which ones you think will get you the biggest return on investment, and buy them. But do not do so until real estate has turned around.

The stock market for beginners should not be as daunting at this point. Turn your money into cash instead of investments, and be patient. When you see real estate turn around, look at buying REITs that have the most probability of going significantly higher. Best if the stocks are under 5.00

Ride the REIT wave a little bit, then start looking for banks to do the same. When you see banks recovering, move your money into them, again preferably is the stocks are under 5.00, and ride that wave.

If we see any other major financial fallouts, look for them to rebound in the same order they fell. Real estate, banks, next, next, etc.

I know that the stock market for beginners can be very intimidating. Just remember that money comes, money goes, and opportunity always exists. You just have to look for it. Start with stocks under 5.00!

For the beginner stock market investing can be very intimidating. You are putting your hard earned cash on the line for a pieces of paper that may or may not turn into more money. Or worse, cost you all of your initial investment.

That is why all of us, at one point or another, seek stock market investing advice. It takes a strong person to recognize that they are not the end all be all on a subject. It can also be horribly humbling to admit that you do not know enough and must seek help with online stock market investing.

But everyone must do it at some point. Some choose the quiet introverted route of buying book after book, or even purchasing video programs to help them improve their online stock market investing game plan. Others will opt to join mastermind groups where they can learn from like minded people who have already learned from the hard lessons they encountered early on in their beginner stock market investing days.

The craziest of all, in my humble opinion, are those that opt to learn by taking the lumps themselves. Although easily the most difficult to stomach, I believe this method will teach people the fastest. Granted, this form of stock market investing carries with it heightened risk. Particularly if you are buying into stocks under 5.00 which carry with them an inherent increase risk through volatility.

What is the best stock market investing advice I can give?

Simple. Make mistakes. Get the hell out there and start putting up or shutting up. Put your money where your mouth is, or you will never make it out of the beginner stock market investing phase. You have to learn. The only way to TRULY learn, is to do. If you do not do, then you may learn, but you will not gain the experience and/or confidence required of a seasoned investor.

Set aside some money you can afford to lose. If you make or, more realistically, lose money. Set more aside that you can afford to lose and do it again. Continue to pay your dues to gain experience. Eventually, and some will encounter this sooner than others, you will start losing less and gaining more. Once you have done so then you will become more confident in yourself as an investor begin moving out of the beginner stock market investing phase.

Even if you have to start with $100, just do it. Nut up and do what has to be done. It is only a gamble until you understand enough about online stock market investing that you can form a strategy. Then, it becomes investing and not gambling.

Perhaps my beginner online stock market investing advice is falling on deaf ears. But for your sake I hope that is not the case.

Beginner stock market investing is the phase we all begin with. This is the part of being an investor that is both the most painful and the most difficult. This is the point in an investor’s life when they take the most uneducated risk and make (usually) the least number of gains.

However, if i were to give any stock market investing advice, then I would say that this is a ‘necessity’ stage. Something that must be endured to ensure success in the long run. Think of being a beginner and losing money as ‘paying dues’. Every occupation has a form of paying dues. The information technology sector will often claim that tech support is paying dues before joining the ranks of help desk, and network administration.

School is more often the form of paying dues for industries like medical and law. And so investing also has a form of paying dues. In other words, to be a successful investor you must take your lumps in one way or another. Often you can get by with the proper education and minimal amount of monetary casualty. But more likely, you will lose what you would consider substantial before you ever begin to meet even mediocre success.

So it comes down to a very real gut check. Can you stomach losing money on the stock market? If the answer is no, then get the hell out. Don’t waste your time. Find something else to do with your money. But if you really feel like you can stand to lose a few bucks and be fine afterward, then online stock market investing just may be for you.

But the only real way to know for sure is to step up to the plate and swing for the fences. Just make sure you don’t put enough on the line that you can’t try again. The important thing is to keep trying and learning until you succeed. Learn from your failed trades. Failure is only failure if you are not able to learn from the situation.

In the end it all comes down to the fact that beginner stock market investing is something we all have to endure. If you are strong enough to handle the dips, then I hope to see you at the finish line after you have paid your dues!

In my travels I get this question a LOT: What is the safest place to invest money? Surprisingly you may already know the answer to that question. We all want a safe place to invest money, but the truth is that no such place exists. I’ll explain further.

First Let’s look at the most common ways you can invest before we get to the safest place to invest money. Typically we tend to see the stock market, real estate, CDs, savings accounts, and the mattress as the safest places to invest money. But how safe are they really?

The stock market is a never ending ebb and flow of ups and downs. A roller coaster of potential. The reason the stock market may not be the safest place to invest money is because the market is literally a place to buy symbolic pieces of papers that can represent anything from goods to currency to shares in a company. Anything that those pieces of paper represent can suffer from incidents that will lower their value. For example, a company goes belly up and all your shares drop in value. You buy several ‘shares’ of potatoes just when some mad scientist discovers how to grow potatoes overnight with a single drop of water. And so on. Most of these risks are typically rather minimal and vary depending on the type market investment you make. But the point is that the market is not the safest place to invest money because it will ALWAYS have the risk of lowering the value of your money due to potentially unforeseen circumstance.

What about real estate? This happens to be my personal favorite. The upside of real estate compared to the risk is amazing. However, is real estate the safest place to invest money? No, of course not. Why? Because real estate is unpredictable and fraught with similar unforeseen risks. You could buy a house and discover later that it was built on landfill and watch as your property value falls to almost nothing before your very eyes. Or it could burn to the ground or collapse in on itself from an earthquake. Or a local gang could move in and turn your rental into a meth house. All of these could lower your investment faster than you can believe. All of these unpredictabilities make real estate definitely not appear to be the safest place to invest money.

Well what about CDs? Certificates of Deposit are often thought to be one of the safest places to invest money. The reason being that CDs are really just like giving a loan to a bank. Typically we all think of banks as being very stable. But the truth is that banks are just like businesses. And like businesses, banks can go belly up. This means that should the bank collapse while you have your cash buried in a CD you can kiss your money, let alone the 3% ROI, goodbye. Though CDs can be insured which makes them about the safest place to invest money. But we aren’t completely done yet.

What about savings accounts? Savings accounts are just like CDs in that you are basically just handing your money to a bank with a promise that the account will not fall below a certain level. If the bank goes away, so does your money. The only reason a savings account is a bit safer is because the account is rather liquid.

This leaves us with storing your money under the mattress. The problem here is that you’re susceptible to theft, fire, etc. But what is more, is that now inflation slowly eats away your stash. With an average inflation of 3% your money will reduce in buying power by 3% every year. Meaning in 33 years your money will be worthless. That’s almost guaranteed.

What does all this mean? This means that there is no safest place to invest money. Every avenue carries with it an inherent risk. What this risk means to you is something only you can decide. Is watching your money erode at 3% a year every year less risky to you than letting a bank borrow it? Is the threat of natural disaster too great to risk investing your money in real estate and watching it double every 5 years? Only you can answer these questions.

So what is the safest place to invest money? That question is something you will have to answer. And so, I ask YOU, what IS the safest place to invest money, for YOU?

Best Way To Invest Money Introduction

Like many of you, when I desired to learn to invest money I found investing came as a rather uninformed concept that, at least on the surface, presented a highly lucrative and appealing method for retiring quickly while providing a fast route to living the life I always dreamed. But in all honesty I had no idea what would be the best way to invest money.

However, unlike what many of us were taught, the best way to invest money does not necessarily or always mean throwing your hard earned money at some phantom pieces of paper that get waved around by yelling fanatics on the trading floor of Wall Street. In fact, there are dozens, if not hundreds of viable investment routes that each carry with them unique positives and negatives. All of these routes will help you learn to invest money better.

So I will begin this blog entry, about the best way to invest money, with a summary of the more common investment opportunities. Let’s get started with this lesson on the best way to invest money!

Stock Market Investing

The stock market offers a variety of investment strategies and terms that are shrouded in mystique. As this blog progresses I will discuss many of them and hopefully enlighten many as to the reality of what each investment type can do for them and will fit as YOUR best way to invest money.

Here is a brief (and not extensive) list of ways you can invest in the stock market, and a few of the types of investments to help you learn to invest money:

• Buy and Hold – stock market investing in this manner would be to purchase shares of a company with the intent of holding for an extended period of time
• Dividend Investment – buying share that award money to shareholders (quarterly or annually) to create a stream of bonus income from the money invested
• DRP – Dividend reinvestment plan. Buy shares that award a dividend (quarterly or annually) and immediately reinvest that money back into the same company
• Position Trading – buying at a low point, or shorting at a high point, with the intent of holding the stock for less than approximately 6 months. Sometimes positions are held for as little as a week.
• Swing Trading – buying or shorting shares with the intent of holding for a few days to a week.
• Day Trading – buying or shorting shares on intraday periods of time (between the opening and closing bells of the market). Sometimes day trading can refer to holding a stock for upwards of a 24 hour period, but typically refers to holding a stock anywhere from minutes (scalping) to hours only.
• Forex – forex stands for foreign exchange and is the process of buying and trading currencies in the same manner as you would stocks.
• Investing in Mutual Funds – sometimes called ‘fundies’, these are large institutions that invest large quantities at a time. Investors can buy mutual funds and as a form of ‘share’ in the fund and have their money invested alongside the fund (or by the fund)
• Index Funds – these are essentially a way to buy a share of a stock market index. In simplistic terms, what happens when you buy an index fund is that your money is placed into several different company shares across the whole index to give you the ability to ride the index’s ups and downs by averaging together shares that are bought and sold within it.

Real Estate Investing

Investing in Real Estate happens to boast one of the largest populations of self-made millionaires in all the investment groups. The large numbers of wealthy, however, are rather spread across the board and encompass several dozen ways to increase your money.

Here are brief descriptions of the more common avenues of real estate investing that will help you learn to invest money:

• Buy and Hold – similar to the stock market, many find real estate investing easiest to buy a single family residence (SFR) and pay it down while it appreciates. The net affect is that people can supplant rental expenditures with a non liquid form of saving.
• Buying Income Property – a very large section savvy real estate investors make their wealth by purchasing income properties. The real estate investing strategy here is to buy property that not only pays for itself, but can come with excessive rental payments that surpass the debt payments, leaving a positive amount of annual cash simply by taking out a loan to own the stick and mortar.
• Flipping – many entrepreneurs make a very comfortable living by seeking out discounted prices for homes/buildings that need a little bit of repair, then making those repairs and then turning around and selling the property for a much higher price. Discounts are most notably found through distress (foreclosure, inheritance, or liens).
• Tax Liens – although this does not really mean buying property, it can sometimes mean ownership at a severely discounted rate so this still qualifies as real estate investing. When a home defaults on paying property tax, the home government puts a lien on the home. These liens are purchasable from the local government and carry an hefty interest rate that is guaranteed by the government. Realistic interest rates for these liens range from 4-16%. The 50% rate you hear about with these loans are from Michigan are touted heavily by ‘get rich quickers’ but should not be considered normal by any means.

Business Investing

A definite way to invest money is by placing excessive cash with private companies, starting businesses (for tax purposes or extra income), or even by treating businesses like real estate. If you can stop looking at entities and start looking at how entities process money, then you will expedite your journey to learn to invest money.

Here are some explanations of the common ways you can invest in businesses:

• Purchasing – like real estate, businesses are bought and sold regularly. With businesses comes a positive or a negative cash flow. Many wealthy or intelligent investors make huge returns on investment by buying businesses that have a healthy positive cash flow.
• Flipping – some businesses are struggling due to poor marketing, management, or even because the owner has run into personal financial problems. These businesses are ripe for being purchased at a discount, improvements being made, and then being resold for a hefty increase.
• Creating – investing in your own business can be a substantial way to decrease the amount owed for taxes. The government offers many incentives to businesses in order to help the economy. It is not uncommon for people to create businesses that have a net loss every year, and thus remove much or most of the tax liability of the owner.

Conclusion

There are many, many, many ways to invest, and each of them will help you learn to invest money. The stock market is not the best way to invest money as there is no ONE best way to invest money. Learn to invest money in ways that work for you and your risk tolerance. Do not take on an investment strategy that is too risky because someone claims it is the best way to invest money, measure risk and compare it to your lifestyle and acceptance. Learn this, and you will learn to invest money better than you can imagine.

In future posts I will explore each of these methods and show real world examples and figures that will help flush out how viable each pathway to help you find your best way to invest money.

When it comes to learning about the stock market, there is an overwhelming amount of information and number of sources for that information. This sheer volume of information can make learning about the stock market a very daunting and difficult task. Many people completely give up on learning about the stock market simply because there is far too much to learn and the typical desire most of us have is to see immediate results.

Unfortunately, this is the exact opposite mentality that one should possess when learning about the stock market. The simple truth is that the stock market is a complex organism that takes plenty of time and tons of reading/education to really comprehend let alone be able to best.

Think about it, if it was easy to make money on the stock market then every person on the planet would be trading paper to each other and making infinitesimal amounts of money for minute amounts of effort.

The old adage holds true here, if it is too good to be true then it probably is just that. When I set out, learning the stock market seemed like an impossible feat. What the hell is a P/E ratio? Why on Earth would I ever want to examine a company’s balance sheet? Do I really need to listen in on company calls?

It seemed nearly impossible, and it still feels that way. What I mean is, no matter how much you study, you will never stop learning about the stock market. There will ALWAYS be more knowledge to gain. New strategies to study. New sources of information. Etc. Etc. Etc.

If you are looking some ‘get rich quick’ scheme with the stock market, keep dreaming. But do it elsewhere. I am laying down the simple truth of the matter. The stock market is complex. But it IS comprehensible. You simply need to purchase a few books and DO THE WORK. If you’re serious about learning the stock market then you better be serious about doing your homework.

The first step is always education. To begin learning about the stock market, go buy some books. No, not the late night infomercial ‘guru’ books. Go to an actual book store and sift through a couple shelves to find what looks like it will teach you the most for your CURRENT knowledge level. Take the time to read the thing, then go back to the book store and get another that caters to your NEW knowledge level.

Rinse, repeat. I have a dozen or so books that helped me in learning about the stock market, and you should too. There is not such thing as an easy road here, and searching for one will only be a waste of time. Time that could have been used learning instead of wasting. In fact, if you take the time you spend looking for the easy route, and apply that toward legitimate study, then you would probably be exponentially further along toward your real goal than you would be if you continued looking for some ‘get rich over night’ B.S.

OK, rant over. In summary, if you’re serious about the endeavor then you NEED to put in the work if you are ever going to be successful in learning about the stock market.

If you are new, then welcome to the wonderful world of the stock market! This is one of the fastest evolving industries in the world and demands information to be delivered to stock brokers, buyers, and traders at the soonest possible time to make the trading more accurate and productive for them. Stock market investing for beginners may be a little challenging but once you get used to it, things will become easier to handle. Here is some of the best stock market investing advice for beginners that you may find useful in your quest to learn how to invest properly. Stock market investing is going to be a breeze once you get yourself familiar with the below terms.

Stock Market for Beginners Term #1: The Stock

A stock is a share in a company. The more stocks you have, the more ownership or power you have over a specific company. NASDAQ and the New York Stock Exchange are two of the most influential and watched markets in the country. Since we’re studying the stock market for beginners, let’s take a look at the two forms of stocks.

Stock Market for Beginners Term #2: The Common Stock

As basic stock information for beginners, a common stock entitles you to an ownership of the company. The basic rule is: 1 common stock gives you 1 vote. The more common stocks you have, the more power you have over the company. Looking at the stock market for beginners, this would probably be the stock you will be investing more. This is more affordable and is easy to acquire. However, since this is a common stock, it would be nice stock information for beginners to understand that this ownership is the last to be given a dividend in case of company closure.

Stock Market for Beginners Term #3: The Preferred Stock

Preferred stocks, for stock market investing for beginners, are the “elite” stocks that entitle the owner of such to be given preference over common stocks. Further, these stocks can give you more voting power and guaranteed dividends, too. In the event of company closure, these stocks will be given dividends first versus the common stocks.

Stock Market for Beginners Term #4: The Bear and Bull Market

These terms are easy to remember and may be familiar to you. The bear market represents a slow market or a market that is predominantly unsuccessful. Majority of the transactions may have failed or there are a few traders for that specific day. On the one hand, bull markets are strong markets where transactions are successful and a lot of trading activity has been recorded same day.

Stock Market for Beginners Term #5: The Pigs

These are the greedy ones. They often want and prefer short term investments and would want to earn profit the fastest way possible using the most frequent stock market quotes. They are referred to by the business as high risk investors and are most commonly avoided by well-established companies.

The stock market for beginners may be scary at first, but this is how it’s supposed to be. It’s like your first day at school when everything is new and you would need to get a feel of everything first before you speed-up.

The secret to choosing good common stocks is that there really is no secret to it.

The winning techniques are tried and true; instead, it’s how you assemble and apply them that makes the difference. The techniques don’t work all the time, but they work often enough so that the methods employed by successful stock investors tend to be more alike than different.

The right way to succeed in the stock market is to invest for both growth and “value.” That means concentrating the bulk of your portfolio in stocks that pass a number of tests and holding them for the long term–three, five, even ten years.

For those in search of income, not growth, it means applying the same tests so that you don’t make any false and risky assumptions about the stocks you buy.

The right way is not based on buying a stock one day and selling it the next. It does not depend on your ability to predict the direction of the economy or even the direction of the stock market. It does depend on your willingness to apply the following measures before you place your order.

The aim: an average 12% to 15% annual total return (price increases plus dividends) on your investments when the market is performing in its historical range, plus the opportunity for much bigger gains when economic forces push it to much greater heights.

You’ll have no trouble finding candidates for your investment dollars. Brokers are full of suggestions, of course, and you may come across intriguing products or companies while walking through a store or leafing through a newspaper. Or your eye may be caught by one of the gorgeous “corporate image” ads that run in upscale magazines.

Most of the information you need to check is readily available from a number of sources and can be calculated from the data you find there.

You’ll quickly discover that the number of stocks that meet all these tests at any given time will be low. So what you’re really looking for are stocks that exhibit most of the following signs of value and come close on the others.

There are different trading strategies (Short, Medium and Long term) for every market conditions, and the process of selecting one strategy can be a very exhaustive task. The strategy that you will decide on should be part of your plan of stock trading, and it should assist you in limiting the choices for stock selection.

First, the short-term stock trading strategies, they involve losing confidence when high risks arise, this will result in losing whatever the investor worked for so fast. It includes Momentum Stock Trading, Penny Stock Trading, Shorting Stocks, News Trading, and Extended Hours Trading. The Momentum Stock Trading is based on complying with the trend, and when researching you should concentrate on determining stocks that are becoming of more strength (strong uptrend and downtrend). The Penny Stock Trading is concerned with trading with stocks that have extremely low prices. This strategy is of a high risk because it is hard to find information about penny stock companies, and a stock can be easily influenced and manipulated. The Shorting Stocks focuses on receiving profits from the decrease in the price of a stock. This strategy is very risky because it depends on stocks that experience significant falls, and is mostly used by professional traders. The News Trading strategy is concerned with following the most crucial and real time public statements (Macroeconomic new releases, earnings releases of companies, bond auctions, political speeches, etc). This strategy is short term oriented. The Extended Hours trading strategy is usually combined with News trading. It involves a trader buying or selling a “moving” stock before or after the market opens/closes, and then the position gets closed inside the regular hours of trading.

Second, the medium-term and the special stock trading and investment strategies, they include; Gap Trading, ETF Trading, Elliott Wave Theory, Fibonacci Trading Strategy, Contrarian Investing Strategy, and Following Insiders. The Gap Trading strategy involves gaps which are sections on a chart where the stock price moves significantly up or down without any trading taking place. Gaps take place for different reason, for instance, when the earnings of a company are much more than expected, as a result, the price of the stock starts higher than it closed the day before. These gaps are discovered by traders who want to profit when the price of the stock reverses to meet the gap. The ETF Trading strategy involves risk diffusion, and it contains a set of stocks in a certain region or sector. It could be short, medium or long term. ETF and Momentum trading strategies are usually used together. The Elliott Wave Theory strategy depends on a theory that the psychology of the investor drives the prices of the stock up in a set of five waves and down in a set of three waves. Charts are used by traders to figure out these waves. The Fibonacci Trading strategy involves the usage of Fibonacci sequence in trading. This type of technical analysis demonstrates the possibility that the price of a financial asset will follow a large part of an original move and detect support or resistance at the major levels of Fibonacci before it goes on in the original direction. The Contrarian Investing Strategy focuses on gain returns by investing in a way that is different from the conventional wisdom one. Finding and buying stocks after their prices have decreased, and selling them when their prices increase can lead to very high returns. The Following Insiders strategy involves observing the main insider trading transactions. Insiders are directors and officers of a company or stockholders that posses at least 10% of the company’s equity.

Third, the long-term investment strategies, they include Income Investing, Value investing, and Growth Investing strategies. The Income Investing, also called Investing for income, focuses on stocks that provide high dividends. These stocks are usually volatile and safely pay dividends every year. The main aim of this strategy is to hold a low risk stock and generate income. The Value Stock Investing strategy focuses on determining stocks from successful companies that are severally undervalued comparing the price of the stock to their true value. When investing in these companies, you need to know the company’s fundamentals in order to realize their actual value. The main aim of this strategy is to combine capital growth and income generation with a medium level of risk. The Growth Investing strategy involves determining stocks that have a high growth possibility. This type of stocks is usually riskier than value stocks because they have a higher possibility of going down. These stocks sometimes don’t pay dividends because they use the company’s profits for future investments. The main aim of this strategy is capital growth but still involves high levels of risks.