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How to Get Started Making Money in The Stock Market

How to Get Started Making Money in The Stock Market

To an outsider, the stock market can be daunting. There’s so many terms to learn and potential companies to invest in. But there’s also the chance to lose substantial money. In the past 200 years, the stock market has outperformed investing in bonds, gold and Treasury bills which makes it an exciting option for investment. This guide will cover the basics for making money in the stock market.

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Learn the Terminology

Learning the basics of trading is the first step to getting started.

  • Dividends: These are usually paid on a quarterly or annual basis to shareholders. Shareholders have the option to reinvest these dividends for more shares
  • Broker: An organization or person that buys and sells stock. They are regulated professionals.
  • Portfolio: A grouping or collection of financial assets. There can be any amount of assets in a portfolio, from one to thousands.
  • Yield: The annual dividend is divided by the price of a share.
  • Bear Market: Terminology used to describe a market that is in a down trend. Usually means stock prices are falling.
  • Bull Market: This is the opposite of a bear market. It means share prices are increasing, which encourages buying.

Different Types of Investors

Personality plays a big part of trading and each investor has different reasons for buying particular stock. Despite individuality, most traders fall into a few distinct categories:

  • Active investors:  This person has a great interest in trading. They keep up to date with worldly financial news and always have an eye on their investments. They don’t always buy today and sell tomorrow, but they are always monitoring trends.
  • Passive investors: This person usually has much smaller goals and likes to take a back seat. They manage risk as low as possible and don’t mind playing the long game. They will often rely on their advisor’s recommendations.
  • Speculator investors: This person has the philosophy of beating the market. They will research heavily for opportunities and jump on stock that fits their criteria. They’ll often sell fast with the belief that the next opportunity is right around the corner.
  • Retirement investors: This person is the most patient and risk averse. Their primary goal is to attain a retirement nest egg.

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Goal Setting

Similar to virtually any industry, making money takes time. It’s a common misconception that the stock market can make anyone rich overnight. It’s simply not true. As soon as you acknowledge and understand this, you will have much more of a realistic approach to trading. Understanding this, by attempting to invest large amounts of capital in short spaces of time, it will most likely end in disaster unless you become incredibly lucky.  Always keep long term goals in sight and look at the bigger picture.

Realistic goal setting and managing expectations is imperative. Know that a return from investing takes time and isn’t a get rich quick scheme. Taking a thorough look at your current financial situation and knowing what you can afford to invest is realistic. Claiming you’re going to invest $1000 per month despite not having your finances under control is not tangible. Create a clear goal of the amount you’ll like to invest annually or monthly.

Patience is Key

Comparable to mentioned above, patience is a very important part of trading. Often people will complete a few short courses or read a book about the stock market and expect to be an expert immediately. Learning the market takes time.

Many novice investors have the attitude of “Since the casino is open, now is the time to play”. The second the stock market opens, people feel the need to do something. It’s the same feeling a person gets when inside a casino – the atmosphere creates the need to spend. Taking a step back and using patience can prevent an unnecessary loss of money. Wait and research.

Research

People need to invest in their education to fully understand and to make smart investments. The market will be unforgiving on those who dive straight in with an open wallet that place trades randomly. One needs to understand the market and educate themselves so they can make smart trades and predict potential investments.

Researching companies is important to stay ahead of the game. Asking yourself questions like “Will this business continue to serve it’s need in the future?” and “Is the business expanding to new markets?” can give you a good indicator of stock purchases and expanding the portfolio. Be aware that a company is letting go of a large number of employees is a huge warning sign. Likewise, a healthy company can still go down in value, even if their numbers are solid. Remember that the market is volatile, even for companies that are performing well. Researching minimizes these risks.

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It’s common sense, but perhaps often overlooked that you should never place too much trust in advisors and experts. It’s a good idea to take what they say in to consideration but never place too much faith in them. A good rule of thumb is to research your information from a range of sources and don’t place too faith into a single individual. Ultimately, trading is down to you as a person and it’s your money to trade. It’s not your advisor’s money.

Minimizing Risk

Losing money when trading is always a potential outcome. Losing money will require you to have skills that efficiently manage risk. A way of putting this skill in to action is limiting yourself to the amount of money you will risk on each trade relative to your total capital. Which means, for each trade you will remove the possibility of risking too much money. A good example of this is limiting yourself to a certain percentage of your trading capital. A good rule of thumb is to leverage your trades at no more than 2% of total capital. For example, if you have $1,000 in total capital, you should invest no more than $200 to completely minimize the risk of a devastating loss.

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Being More Productive in Business

Physical energy comes from the type of food you eat, how much sleep you get and your level of physical fitness. You may not think that being healthy has much to do with your book, business or blog, but having that extra boost of energy is completely necessary at the end of a long work day. If you can’t get yourself off the couch when you get home from work, you’ll have a difficult time giving your project the attention it needs. Try the following eight tips to increase your energy and put that extra oomph toward your projects.
Sleep eight hours or more for an entire week. The most common reaction I see to the old adage that people should sleep seven to eight hours a night is laughter. Even though I could stand here and say that following the adage has helped me immensely in writing my 30 books and building my business, I know that it’s unlikely to get a long-term change out of you. Instead, I suggest you sleep eight hours or longer for an entire week. Often, that short concentrated burst of rest is enough to spring people into several Continue reading Being More Productive in Business
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How to Get Your Piece of the 700 Billion Bailout, Jobs For All

Damn the banks, damn the Wall Street traders, damn the Fed, damn them all…damn every last single voice of negativity that want us to believe that the economic good times are over. I don’t believe a single word of it. Things aren’t that bad, in fact, since I discovered this new web site called “GovernmentContractsforAll” I am convinced, more than ever, that our ship has just rolled in. Don’t believe me; check out some of these opportunities.

Printing

The US government is offering contracts to any printers or counterfeiters who feel qualified enough to reproduce $100 bills at a rate of 5 million dollars per hour. Apparently, banks in desperate need of cash will not accept money transfers from the Fed. They don’t believe the government is good for the funds. As a result of this request for cash, the US Mint will not be able to meet the increased demands for cash from the banks. In fact, demand for cash is so strong sources in the government predict that any Tom, Dick or Harry with experience working a Xerox machine have a fair to good chance of landing a contract.

Trucking

Moving around billions of cash requires some serious equipment. In a stampede, similar to the Alaskan gold rush, truckers, the country over, are applying for government contracts to haul the cash to the banks. “We haven’t seen demand Continue reading How to Get Your Piece of the 700 Billion Bailout, Jobs For All

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How To Find Out If Something Is A Scam

Is it a real deal?

I was recently made redundant and decided that between job interviews etc, I would see what money I could earn via the Internet, rather than just sleeping in or going fishing.

Well I was instantly blown away but the 40 million money making opportunities you’ll find without too much trouble via just a couple of simple google searches. And once you sign up for one newsletter or opportunity, you Continue reading How To Find Out If Something Is A Scam

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You have a Choice better than Credit Cards

Better than a Credit Card

Capital One or Chase Credit Card
Pre Paid Credit Cards

Hopefully your are not one of those credit card users who only got a credit card for the convenience of not carrying cash around. Yea its easy just charging but the are better ways for you to pay for things that charge it. Cash is really the best way to purchasing things because you get a real sense of how much money your are spending. You might not be aware of better ways to borrow money to use for your cash purchases instead of using the plastic (credit cards). This Hub was written to help you with some alternatives to credit cards. There are just too many people using credit cards instead of these alternative methods because of all the great advertising these credit card companies get done. Very few credit card users realize that there are much better ways of getting those things without getting into debt with high interest rate credit cards. In this Hub I am going to show you several ways to avoid using your credit card and avoid paying fees and interest or at least reduce to a large amount. I hope this will help you on a better path for spending your money and saving some cash as well.

I prefer Debit Cards over Credit Cards

Debt cards first started being used by most of the European countries and where rarely used elsewhere but things have changed a lot and debit cards are being used a lot more frequently. Here in the United States these cards are becoming Continue reading You have a Choice better than Credit Cards

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How to Save Money in a Recession

Save Money in a Recession

Want to Know How to Save Money?

Saving money is suddenly fashionable. After years of living beyond our means and putting it on the plastic suddenly the world is faced with economic recession saving is fashionable.

The reality for most people is quite simple: its easier to not spend money than to earn it. Not spending $20 takes a single decision, earning it may take someone on the minimum wage 2 or 3 hours.

Maybe I am lucky, my mother was always living on next to nothing, as soon as I got a job a rebelled and spent money, all that I earned in fact. That only lasted for a few years though because I never wanted to be tied to job and quickly discovered the quickest way to increase my bank balance was to not spend: so much less effort than over-time or a promotion or a second job.

So now here are some of the saving money tips which are intuitive to me but seem to be new to many people.

How to Save Money and Get Out of Debt

Saving Money on Groceries

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It’s Time to Ditch Abusive Corporate Management Styles

What is a Cycle of Abuse?

In mid-October of 2008 I left a job that provided me with health insurance, a 401k, life insurance, and a regular income because I just couldn’t stand to do the work for one single minute more in good conscience. But beyond that, I realized that by staying in that particular work environment, I was legitmating a management style that is based on something psychologists refer to as a ‘cycle of abuse’.

What is a cycle of abuse?

In the first part of the cycle, the abuser, frustrated by factors often totally unrelated to his/her relationship to the abused, lashes out in a negative way through violence, harsh and/or unwarranted criticism, or verbal and/or emotional abuse, (such as swearing, demeaning put-downs, withholding praise and affection when it is clearly warranted, etc). Unreasonable expectations are often placed on the victim with harsh penalties for not meeting these expectations. This kind of treatment leads to a crisis of confidence and an erosion of the Continue reading It’s Time to Ditch Abusive Corporate Management Styles

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Use It Up, Wear It Out, Make Do

Use It Up, Wear It Out, Make Do

Rejecting the Consumer Economy

As Wall Street continues to fret and fuss over whether or not Americans will return to spending money we don’t have on cheap crap we don’t need, I would like to offer an idea that’s been nagging at me for a couple of years now:

How about we just knock it off?

Seriously, maybe it is at least possible that a “consumer driven economy” is complete madness and the time has now come to admit it and get real.

I recently accepted a paid project ghostwriting an E-book on 100 Money Saving Recipes for a website that aims to help people through the coming recession by sharing common sense solutions most of our grandparents took for granted. I quickly realized that most of the consumer-madness that has been driving the US economy is a fairly recent form of insanity.

For example, when I was growing up in the late 50s and early 60s, buying convenience foods was considered to be just a step up away from killing puppies and sleeping in your own vomit after a night of debauchery. No woman in my extended family would have been caught dead making Pillsbury canned biscuits. To this day, I can make biscuits, cornbread, pie crust, and muffins without a recipe, in about 3 to 5 minutes, tops.

So what, you say. (Thanks Dick Cheney.) Well, so, a dozen big biscuits made from Continue reading Use It Up, Wear It Out, Make Do