Question: How do stocks work? (20 characters)?
I really would like to know more about stocks and how they work.
(yes, I am young. No, I am not going to jump in and make any brash decisions. No, I don't expect the stock market to be a "get rich quick" type of thing.)
What I know/have done:
- in seventh grade (four years ago) they had us do a stock market simulation. The online site gives you fake game money but bases all of its stock ups and downs on the real world and what was actually happening. over the semester each group got to make decision on what they thought would be a good investment.
the (fake game) money that we made: average - $14,500, 3-5 groups made $50k-70k, my group got $114k. (If I remember correctly it was mostly google, apple, and a few disney, costco, and a few others? ... and some really smart kids in my group!)
What I want to know:
- when you invest in a stock how does it actually make you money? is it like a gaining interest off of a bank account, or do you have to wait until the price rises and sell it to make any profit?
- when you buy stock do you lose money in their rating goes down, or just the money that you spent buying the stock? (is "ratings" even the correct word?)
- when you buy, can you only make money off of selling the stock, or does owning part of a successful business gain you money by itself?
My financial state:
- I am 16 in 11th grade (so leave that to blame if I over shared...)
- make $350 a week (do online schooling - gives me time for a job)
- I currently have about $3,150 saved - I have no trouble saving/keeping my money, money doesn't burn a hole in my pocket. (that money is actually the money that I have saved for my horse, no need to get on me about that, I already have horses and know to take care of them. I am saving up another $1,400 for a few months in boarding, farrier, vet, etc.)
- after I am done with that, if I saved any extra money how much should I save until I think about investing in anything?
(And if you can think of anything else you want to ad, that would be wonderful)
Thank you!
Answer:
It would be best to get a book from your local library, like Investing for Dummies; every popular..
Investing Tutorials - Basics
http://www.investopedia.com/university/b…
http://yourportfolio101.com/index.html/l…
http://www.howthemarketworks.com./
http://www.fool.com/school/basics/basics…
http://beginnersinvest.about.com/library…
http://www.mysharetrading.com
http://www.fool.com/
http://www.dummies.com/Section/Content-S…
A collection of trading games and simulators:
http://www.stock-market-game.net/
You can also type in the Search Y! Answers box at the top of this screen for “how to invest,” and get lots of answers.
Beginner’s Books on Investing
"Which Is Better, Buy-and-Hold or Market Timing?"
"Do You Have What It Takes to Be a Market Timer
O'Neil, William J.- How to Make Money in Stocks
Oz, Tony - How to Make Money From Wall Street
Rotella, Robert P. - Elements of Successful Trading, The
Schwager, Jack - Stock Market Wizards
Douglas, Mark - Trading in the Zone
Nassar, David – Rules of the Trade
The Intelligent Investor, by Benjamin Graham
One Up on Wall Street, by Peter Lynch
Common Stocks, Uncommon Profits, by Philip A. Fisher
Stocks for the Long Run, by Jeremy Siegel
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
Trading for a Living, by Alexander Elder
From Riches to Rags, by I.C. Freeley
Millionaire Traders, Lein & Schlosberg
You can get all of these books at your local library through the Interlibrary Loan system for free.
Hi there,
Let me state down some steps that you can proceed:
1) LEARNING
I have done many things from reading all sorts of financial books to attending seminars. That time, I was still at a loss and do not know where to begin or whether have I learn enough inthe investment world. What is the full picture?
Understanding the various asset class and learning them step by step enables me to gain mastery over them in a systematic way.
- Unit Trusts / Mutual Funds
- Bonds
- Stock
- ETF
- Forex
- Options
- Index Futures
- Commodities Futures
Learn well and gain mastery.
2) SAVINGS
Keep the money as savings.
You can set up 12 boxes at home. Label them from Jan to Dec.
Place your savings ($400) into the respective box for each month.
Once you have accumulated 4 months of Savings, place them into the bank (a separate account from your expenses).
Do this every month and quarter, very soon you will realise you have accumulated a good amount of savings.
These savings are to be used for your cash flow machines.
Cash Flow Machines are to generate a constant flow of Cash for you
3) CASH FLOW MACHINES
Once you have at least $5,000, you can start your cash flow machine (eg. Corn Machine - Online).
For every $5,000, you can generate ard $250 per month.
The steps as follows:
1) Sell a Contract to Raw Material Supplier/Investor
2) Collect the Contract Fees From Supplier
3) Wait for 2 months for contract to expire.
4) Keep the contract Fees
Do the above all over again.
Your involvement is mainly to create the contract and sell to the Supplier/Investor.
Takes 5 mins of your time in every 2 months.
All contracts are done online.
Hope this helps
"stock how does it actually make you money?",..in 2 ways.... Dividends, a yearly payment to you,..Or Capital Appreciation,..The Stock Price Increases..Dividends are fairly certain,..a higher stock price, not..
"when you buy stock do you lose money in their rating goes down,",..Probably,..Bad News that Netflix would split and charge more caused many to sell,..and the stock price crashed..(Which was probably an opportunity to buy more)
If it's a stock like Apple or netflix you intend to gain from a stock price increase,..and would eventually sell when you thought it's Price was fully valued, or expensive,..or you thought they might fall-off of earnings for any number of reasons..A Stocks like Coca cola and Walmart,..You most likely hold forever(Nothings certain)..The share price would gradually creep up,..plus maybe around a 3% dividend.
If you're buying growth stocks you realize a Profit when you Sell...A Dividend is a payment yearly towards Earnings,..You would claim it on Taxes(which is no problem)
Is there a nearby Cattle Ranch that would let you board your horses, cheaper?
You would eventually have to consider Marriage, house, Kids, etc..so you would invest conservativly..
imho,..Stock Mutual Funds,.."Large Cap Stock Funds", and "Growth and Income Funds",.. with a top 10 rating for 3 and 5 years found in a Mutual fund Almanac at aaii.com,..Quarterly Low-Load Mutual Fund Update,..and Moneyletter.com