Money Making Schemes

Nagesh answers:

Hi Jake,

I understand that the prospect of heading straight into the stock market seems like an enticing one but without due diligence and learned decisions I can assure you that it would be a big folly.

I am, like you an 18-year-old student and I’ve gotten myself acquainted with the stock market through books. Reading books from legendary investors such as Warren Buffett, Peter Lynch etc. Would be of immense assistance to you. Start with ‘One Up on Wall Street’ by Peter Lynch for a start, it is a very good book for laying the fundamentals.

Reading materials themselves contain a myriad of oft confounding jargon so investopedia.com would be a pretty useful website as well!

Other than that, as for how much you should invest, it depends on how much cash you actually have (go for personal finance classes where they teach you how to govern your own wealth and how much of it should be invested such that losing all of your capital would not compromise on your living standards as well as financial security) Ask people around you who have invested SUCCESSFULLY in stocks (be wary of their ‘tips’ though) for their advice and how they did it, you could probably pick out some tips from them.

And last of all, may I just say that risk is mitigated by knowledge and educated, informed decisions. Buying stocks is not a gamble, it only is so when you have not done your homework on the stocks you have bought and based your decisions upon pure speculation. As of such you’re better off striking the jackpot in Vegas.

Investing is a partial ownership in the business which you have invested in. All the best in your future endeavours and undertakings in the stock market! 🙂

Nagesh answers:

I can tell that you are a value investor. You want to ask 3 questions for the price of 1… Well, here you go.

What site is best for trading?
Every one has different needs. If you’re new and don’t keep much money in your brokerage account, then Scottrade is probably good for you. They’re real time charts are pretty good, but no CD’s are available, the cash account only pays about 0.5%, and they charge pretty heavily for mutual funds. If you want to leave money sitting in a MM that pays 5% while you’re out of the market, like a choice of no load, no fee mutual funds, has an excellent site for research, want to buy competitive CDs on line, all in one place, then you might like fidelity. It’s what makes you happy. If you don’t like the sevice, then you can always change.

How do I pick stocks?
An answer would take volumes to provide, so let me suggest some literature:

I would recommend William O’Neil’s “The Successful Investor” as a good starting point. Follow that up with Peter Lynch’s “Beating the Street”. That should provide you with two strategies that you can learn from in building your own investment strategy.

Other good books include “The Motley Fool Investment Guide” by Tom and Dave Gardner or “Real Money” by James Cramer.

I have read all these books and many others and devised a strategy that adopts a bit from each one.

Another thing you can do is invest using a fictional portfolio. Let that run for a few months to see if you are ready to start trading with real money. In the meantime, invest in mutual funds. Once you are ready, sell the fund and invest on your own.

Remember, the time spend learning about investing is far less then the money lost by not being prepared.

Where can I find good fundamental and technical analysis?
You’re on your own for this. There’s a multitude of excellent sites out there, where you can get fundamental ratios. Try Zack’s, Yahoo Finance, MSN finance, and a multitude of others are out there for free. As far as technical analysis, you need to research and find what works for you. As far as charting goes, Bigcharts is a good free site. Personally, I like Telecharts, which has a fee, but well worth the 50-75cents per day for the sorting capability, fast way to cycle thru many charts, and the ability to write your own personal critera.

Are there any sites out there that seem to pick consistent winners?
No. And anybody that says they can is a liar.
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Nagesh answers:

Trade stocks, invest in real estate, trade currency on the foreign exchange, start your own business, make an invention that sells well or is worth a lot, or become an exec, ceo, or hedge fund manager, neuro surgeon. Pan for gold or look for treasure in some sunken ship or temple, find oil, win the lottery, gambling, sell drugs or guns on the blackmarket, start your own cult, write a book that sells well, marry someone rich, i dunno there’s probably a bunch more but that’s all i can think of off the top of my head. 90% of rich people aren’t famous so i dont know why you stipulated not being famous

Nagesh answers:

Investing in stock market and do some online survey in your free time its a good way to get money online.

Best of luck

Nagesh answers:

IF you can’t watch those suckers every minute of the day, then you better forget trading stocks. Hire a pro to invest for you or you WILL lose trading stocks, it’s dangerous and today even more so. I do trade off and on and I do ok and every year I’m positive. But there are so many variables in that jungle I couldn’t even begin to tell you here.

FOUR rules I always follow.

1.) Never buy a hyped up stock on the day it is being hyped. It will come crashing down just as fast. You’ll get burned for sure that way.

2.) Don’t just buy a stock because it’s got news MAKE SURE the company is solid. Check out the financials.

3.) NEVER NEVER NEVER buy penny stocks NEVER.

4.) And the most important rule is NEVER rush into any trade, always take your time and think carefully about every trade you make. Know exactly what you are doing. DO NOT be greedy, got a profit take it! And KEEP YOUR FINGER ON THE TRIGGER! KNOW WHEN TO GET IN AND OUT.

And if you have hundreds of little trades at the end of the year like I do be prepared to go through HELL doing you taxes. They want every detail, so much fun. And yes, they will come after you even if you lost money. And no the tax software doesn’t do it all, your little fingers will. Just so you know.

And no you won’t get rich quick, or at all, doing this. And if you are rich it’s a good way to become poor. So be very careful the system is rigged against the little guy, they do know how to get you.

Ok?