For some people, investing in the stock market involves risks that they are not willing to take, but Stock Market investing does not have to require great risk to provide a great return on investment. Successfully investing in the stock market takes a long term, disciplined approach. Buying a stock, only to sell it when it increases slightly in value is taking an unneeded risk with your money. All investment in the stock market involves some risk, but with research and careful investment you can minimize that risk.
The right research can help you make an informed decision. An informed decision can help you make the right choice when you are seeking a higher return in investment that is available in a passbook savings account, mutual fund or certificate of deposit.
The main reason to invest your money in the stock market is to make a return on your investment. With sound investment decisions you can receive a steady income that increases every quarter. Once you have established your short and long term goals, it is easier to make the correct decisions to reach those goals.
To ensure a steady cash income, each stock that you own must do two things. The first thing that the stock must do is provide quarterly cash dividends. The second thing the stock must do is take the cash dividend and reinvest it by buying more shares of the stock. By providing cash dividends and reinvestment options, your stock portfolio will grow each quarter, providing you with an increasingly high cash income.
Of those companies that provide cash dividends, you must look for the ones that have a proven history of providing higher cash dividends every year. By providing higher yearly cash dividends and reinvesting those dividends, you are helping your portfolio to grow at a rate that will help combat the effects on inflation. Resist the temptation to withdraw your dividends to provide for household expenses. Withdrawing your dividends significantly impairs your plan’s ability to make your momey grow.
Another way to help your portfolio grow is by choosing to work with companies that are commission-free. Quarterly commissions can eat into your dividends, reducing the amount of money that is able to be reinvested and diminishing the number of stocks that your dividends can purchase. Each share that your dividends purchase provides extra income that can in turn provide more dividends. Commissions can break this positive investment cycle.
You can greatly minimize the effects of stock market price fluctuations by wisely investing in a long term stock plan. By avoiding commission fees and letting your dividends work for you by reInvesting in additional stock your stock investment plan can provide you with an increasing cash income without the same amount of risk that is traditionally associate with stock market investments.
Martin Lukac
http://www.articlesbase.com/investing-articles/make-money-on-the-stock-market-with-these-tips-98883.html
Can you really make a lot of money off the Stock Market?
I recently graduated from high school and as part of the requirement to walk was to take a economics class. In that class we had to do a stock market simulation, http://www.stockmarketgame.org (uses real time data ie: stock market, tickers, graphs, etc), and I did very well (or atleast I think I did, placed 2nd in Northern California). We were given $100,000 to invest with for a 10 week period. The 10 week period was between February 20th to May 1st. As some of you know, the market was still a little on the low side but things were picking up. I didn’t invest all $100,000 but more like $65,000. I made some stupid choices when the simulation first started (didn’t know what I was doing, buying and selling expensive stocks mainly) and ended up losing almost half my portfolio. I really can’t recall most of the companies I invested in but some of the ones that stood out were ING GROEP NV, BioMed Realty Trust, Inc., Bank of America Corporation, and ING Groep N.V.. These companies were the ones that basically brought in most of the money and rebuilt my portfolio. By the end of the 10 week period, my portfolio closed in at $168,000 but at one point, was nearly $200,000. I’m still a little skeptical about the stock market although. Can you really make this kind of money? Should I really start investing? Can you really make a lot of money off the market? Have any one of you out there in the world made MAD money? Any investment tips would be helpful. Thanks in advance.
-Chan Saelee (soon to be airman, future businessman)
There is money to be made with stocks. However there is also risks involved. I do not personally invest in the stock market as I am not a risk-taker. Unless you are willing to research the companies thoroughly I do not think it is a wise idea.
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My father invests in the stock market from time to time.
I put 13,000 dollars in 1998 in John Hancock mutual fund and I have not made a cent on it. The last time I checked it I think it is worth about 3,000. I could spend it as well as the big bankers. If I had to do it again I would not give them a dime !!
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Been Ripped Off
When the whole stock market is rising. Then it doesn’t matter much in which stocks you choose to invest. Because prices of stocks are highly correlated. And they usually all go up or go down at the same time.
The only problem is that the stock market doesn’t rise all the time. And next time you invest in the stock market. It may go down. And you can loose as much money or more than you’ve made before. Making a lot of money in the stock market one time doesn’t prove anything, except perhaps that you got lucky.
It’s possible to get rich from trading in the stock market. And some people do become rich like that. But most people who try end up a lot poorer than before. They loose their money to the rich guys.
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Yes there is money to be made in stocks. But I will tell you what I love the most about this field, the research. Researching, studying, making informed decision based on that and watch to see how right you are. That is amazing, makes you feel like a wise one, lol, especially in field that is so so large with so many variable and angles.
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Five Fatal Flaws of Trading
June 25, 2009
By Jeffrey Kennedy
Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit – and more importantly, do it consistently. How do they do that?
That’s an age-old question. While there is no magic formula, one of Elliott Wave International’s senior instructors Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don’t claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person’s life. Maybe you’ll find one in Jeffrey’s take on trading? We sincerely hope so.
The following is an excerpt from Jeffrey Kennedy’s Trader’s Classroom Collection. For a limited time, Elliott Wave International is offering Jeffrey Kennedy’s report, How to Use Bar Patterns to Spot Trade Setups, free.
Why Do Traders Lose?
If you’ve been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn’t seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can’t seem to prevent that invisible hand from depleting your trading account funds.
Which brings us to the question: Why do traders lose? Or maybe we should ask, ‘How do you stop the Hand?’ Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.
Fatal Flaw No. 1 – Lack of Methodology
If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won’t work over the long run. If you don’t have a defined trading methodology, then you don’t have a way to know what constitutes a buy or sell signal. Moreover, you can’t even consistently correctly identify the trend.
How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn’t matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can’t fit it on the back of a business card, it’s probably too complicated.
Fatal Flaw No. 2 – Lack of Discipline
When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously.
Fatal Flaw No. 3 – Unrealistic Expectations
Between you and me, nothing makes me angrier than those commercials that say something like, "…$5,000 properly positioned in Natural Gas can give you returns of over $40,000…" Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations.
Yes, it is possible to experience above-average returns trading your own account. However, it’s difficult to do it without taking on above-average risk. So what is a realistic return to shoot for in your first year as a trader – 50%, 100%, 200%? Whoa, let’s rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them – and achieve them – you will fend off the Hand.
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For a limited time, Elliott Wave International is offering Jeffrey Kennedy’s report, How to Use Bar Patterns to Spot Trade Setups, free.
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http://www.elliottwave.com/affiliates/featured-commentary/5-fatal-flaws.aspx?code=33384
I make my living off the stock market, and the answer to your question is yes. You can make money, it takes yrs of learning, and the best way is through technical analyst. I use charts……….
The one thing about trading is that most people give up before they understand it. You were more than like just luck. For you lost a great deal before you made it back, there for understanding both sides of the coin!
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