1. Your Questions About Can You Make Money In The Stock
Market
Mandy asks…
How do you make money by betting the stock market will go
down?
Ive only done regular stock purchases and sales before with my account. How do I go about in
essence playing the stock market and betting it will go down? Are there any good websites to
learn how to do this? Any keywords I can search? Thanks for any help!
So I dont get it... I do a put option on a specific stock?
Steve Winston answers:
I'm a futures trader, and trade the mini dow or YM. Check out www.tradethemarkets.com You
can sign up for a free daily news letter, and John Carter provides daily updates on the markets
he is trading.
You can trade futures using a number of brokers. I use Tradestation for sharting and Infinity for
order execution.
If you are based in the UK, you can also spread bet the stock indexes, as well as commodities
and individual stocks, and it is tax free.
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2. For spread betting, check out www.capitalspreads.com, or www.cityindex.co.uk
As long as you have a good trading plan and good money management, you can make some
good money whether the stock market goes up or down. Shorting the market is not more risky
than going long, just make sure you have a stop in place, the same as going long...
Good luck!
Helen asks…
how can you make the most money in the stock market possible in
2 months?
I am playing a stock market simulation game for school and i need to know how to make the
most money possible in 2 months! in the game i will have 100,000 thousand fake dollars
starting money. these stocks have to cost less than $1,000 because the stocks can only be
sold in quantities of 100. Above that, the stocks you can purchase increase in increments of
50!
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3. Steve Winston answers:
Your best bet would be to make an accurate prediction regarding a stock, preferably one that is
about to explode upward, and ride it up. In other words, it's a gamble, but at least you would
have a reason for it.
There is a drug stock that is awaiting make or break news. ITMN (Intermune) is a drug company
that has the sole rights to sell a certain drug for an incurrable lung disease. Right now this
company is awaiting a decision from the FDA. Based upon FDA's approval this drug could jet
rocket this company into great wealth. It could make them billions. (See the reference below for
the full story).
The stock is selling at around $11 to $12. What have you got to lose? You only have two
months and so you need something that has the potential for great gains or large losses. ITMN
is currently going up as it has already been down due to past problems with other drugs. They
may not go down a whole lot more if FDA says no, but they may jump up dramatically.
I hope this helps. How exciting for you.
Richard asks…
I don't have much money, but I want to know how I can use the
stock market to make money for fun.?
I am not familiar with the very basics to simply buy a share and watch it grow....how do i do it
and where do i go to do it? Who do I talk to in order to buy shares? Can I do this all by myself
so I don't have to pay a middleman? Any simple websites? Once again I don't have much
money. This would be another one of my hobbies. Thank you.
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4. Steve Winston answers:
Purchasing stock is easy, making money with it is a bit more difficult. Many large companies will
sell you stock directly without a commission charge. Most brokers will charge between $8 and
$30 per purchase or sale. Scott Trade is $8 per trade. You can sign-up online to open your
account. They'll send you some papers in the mail, you sign them and return them with a check.
They will open and fund your account. Then you simply pick the stock you wish to own and tell
them online to purchase it. Then you can watch the price go up and down on Yahoo Finance. If
you want to purchase direct from a company, go to their web site and click on the contact
information button and then investor relations. Give them a call and ask if they have a direct
stock purchase program. One note of caution. If you don't have much money it won't take long
to turn it into less in the stock market. You'll get eaten up by transaction fees even if your stock
goes up a bit. You'd be better off doing imaginary trades by picking stocks and recording how
much you would have bought and see if your portfolio makes money for you. In the mean time
put the money in an online bank at 5%. At $8 per trade would you have made money. If yes
after 6 months by all means give it a whirl. Hope this helps. Find more info on the e-trade and
Scott trade sites.
Yack
Laura asks…
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5. Are people who complain about the stock market indexes
dropping too dumb to make money in the market anyway?
Because there's no possible way you can get rich in that kind of situation, is there? Why don't
schools teach our children what they really need to know when it comes to money?
Steve Winston answers:
The stock market was ridiculously overvalued.
It is actually very healthy for our economy to have the stock market drop to a more realistic
value.
What is really tragic is all of the people who invested in stocks when the market was over
valued.
I would say that the Dow at 6,500 is a much more realistic value for the stock market than
14,000.
Susan asks…
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6. Can I make good money off the stock market?
I'm very young, 24, and don't even have a real job yet (won't until a year from now at the
earliest) but when I do get some cash I'd like to invest it, wisely, in stocks. I'd be very active
about it making sure to find out all the information and education on the subject and stocks that
I can.
Do you think this is a good idea?
Steve Winston answers:
The earlier you get started, the better. It is not only a good idea, it is an outstanding idea. As
soon as you get a job you may want to open a Roth IRA account and put1/2 your savings into it
up to $4000. The other 1/2 you want to keep outside the Roth IRA in case you should need it.
Why a Roth IRA? Because evey penny earned in a Roth IRA is tax free. But it is a retirement
account and you can not really withdraw the money until you are 59 1/2 with certain exceptions.
The reason I say "may" is because a young person might need money for certain things such as
getting married and buying a house etc. That more established persons do not have to deal
with.
The only caution I have based on past experience I might add is to not invest too much in more
speculative companies. They have a tendency to go south in a hurry during recessions.
Actually, mutual funds are one of the best options for people just starting out in my opinion
despite a great deal of negative comentary towards them in recent years. Just have to be
somewhat careful in which ones you pick as with any investment.
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7. Lisa asks…
How can I make money in the stock market right now? (I need to
eat)?
I am a student who is struggling to get by and needs to make some extra $ so I can survive.
I'm interested in learning about the business and the stock exchange so I can invest in stocks
and make some money from it, but I can't take any stock/business classes at the moment
because I'm already in law school and too busy at the moment.
I just registered with Virtual Stock Exchange to see if I can make any $ off of that, so I'll see
how that goes. I remember that in my earlier years of education I played a virtual stock
exchange type of game and I believe I invested $1000 and came out with about $10,000 after
maybe half a year; my group won 1st place for profiting the most from the stocks and we won a
year's worth Chick-Fil-A chicken sandwiches (52 free chicken sandwiches). Now, this was 4
years ago and I was wondering if it would be at all possible today.
I have about $1000 in my savings account that I have kept for emergencies, but I am willing to
invest it if I can make an educated investment and profit as much as I did 4 years ago. I would
love to replicate my previous investments because they were so successful, but I forgot
everything and lost all records of the class =[
Please help me survive here; $ is scarce for me but I need to eat and I don't want to quit school.
Tips and information about today's contemporary stock market would help immensely;
recommending the best books about this topic would be very kind of you as well. Thank you so
much for all your help!
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8. Steve Winston answers:
Anyone who is down to their last $1,000 should not invest it in the stock market - especially
since you need that money to survive. If you played a virtual stock trading game and made
1000% return in 1/2 a year, your results are beyond extraordinary. I can say with a 99.9%
confidence level that you will never get those kinds of returns again.
As a benchmark, Peter Lynch is thought of by many to be the greatest mutual fund manager
ever. His Fidelity Magellan fund averaged a 29% return when he managed it, and he had a
team of researchers and years of experience as well as a business degree from Wharton, one
of the best business schools in the country.
You may hear of so called "day traders" making fantastic returns. Some make decent returns -
most day traders lose money. If it were so easy to make lots of money day trading, there'd be a
lot more people doing it long term. I know a lot of people, but I don't know a single person who's
day traded for more than 3 years, because even though some of them might make money in the
short term, in the long term, they almost always lose it. Day trading is like playing the slots in
Vegas. You may know a few people who have made money in the slot machines, but long term,
almost no one comes out ahead.
David asks…
How can I make money in the stock market right now?
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9. I am a student who is struggling to get by and needs to make some extra $ so I can survive.
I'm interested in learning about the business and the stock exchange so I can invest in stocks
and make some money from it, but I can't take any stock/business classes at the moment
because I'm already in law school and too busy at the moment.
I just registered with Virtual Stock Exchange to see if I can make any $ off of that, so I'll see
how that goes. I remember that in my earlier years of education I played a virtual stock
exchange type of game and I believe I invested $1000 and came out with about $10,000 after
maybe half a year; my group won 1st place for profiting the most from the stocks and we won a
year's worth Chick-Fil-A chicken sandwiches (52 free chicken sandwiches). Now, this was 4
years ago and I was wondering if it would be at all possible today.
I have about $1000 in my savings account that I have kept for emergencies, but I am willing to
invest it if I can make an educated investment and profit as much as I did 4 years ago. I would
love to replicate my previous investments because they were so successful, but I forgot
everything and lost all records of the class =[
Please help me survive here; $ is scarce for me but I need to eat and I don't want to quit school.
Tips and information about today's contemporary stock market would help immensely;
recommending the best books about this topic would be very kind of you as well. Thank you so
much for all your help!
Steve Winston answers:
Well, I certainly do agree with one of your responders. You experience a few years ago is not
too likely to be repeated although it certainly is not impossible. You must be aware that you can
potentially loose the entire $1000-- your whole savings. If you had asked this question back in
March you might very well already have that 10k you wish for. That is how much the market has
gone up since then. The big move is most likely over with. In fact we might very well retrace
much of that big move up in the coming months.
How much risk are you willing to take? A little, moderate, or a lot? A little, try CHN. Moderate, try
ACH or CHDX. A lot, try SIRI. I do mean a lot.
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10. Now with only $1000 when I say risk, you because of the small amount to invest are taking
much much more risk than a person with $100,000. Everything is relative so when I suggest a
little risk that is relative to the other investment options I have suggested and does not mean an
absolute little risk. Do I make myself clear? With only $1000 you are assuming a great deal of
relative risk.
Daniel asks…
What all do I need to do to train myself to become good at making
money in the stock market?
Where's what I have learned so far that I can use to make money and protect my money in
the stock market:
Monitor MACD, Stochastics and one other thing (I forgot what it was) If all three indicators lines
up, you either buy or sell.
Cover Calls: You can make money by sellingl someone the right to buy a stock at a certain
price before a certain date. It is like owning property and taking in rent, except you own stocks.
"Protection Put" ?(not sure what it's called): You buy the rights to sell your stocks for a certain
price (even if the market price is lower) before a certain date.
What other concepts is there not listed here? Please compare this with your knowlege of the
stock market and fill in what is not here that you know.
What all should I do to train myself to become good at making money on the internet? Give me
some links or recommend some books please. I want to learn all about trading. I'm an absolute
beginner. I don't even have an account opened yet
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11. correction for the detail section above: "stock market", not internet
Steve Winston answers:
Be patient. Always put a stop on your investment if it is not work
check this book out, Stock Traders Almanac, emphasize the Market cycle, seasonal cycle,
presidential election cycle.
Yes you could learn invest by yourself. It is your money, you should know how to do with it. For
starter check this site out.
Http://www.pathtoinvesting.org/index_fla...
Http://www.stockcharts.com
http://www.streettalklive.com section university. A lot amount of information. It will serve you well
I accumulate in good amount in 401k at the young age.I could share with you. When consider
invest in stock market. You should consider basic 3 things:
fundamental analysis==(economic data,finincial health, management, business model,
competetion)>>what to buy
technical analysis==(chart+indicator)>> when to buy
Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of
your live
At the age of 32. My 401k is amassed 75,000.00 and 30000.00 in taxble account. By follow
simple rule
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12. Jenny asks…
How can you make money nowadays in the stock market when it's
so crappy now?
If I invested in Google, Apple, or Coca-cola for 30 years, I'm pretty sure I'll probably get
anything significant in return.
*I'm pretty sure I won't get anything significant in return.
Steve Winston answers:
Yeah, Google and Apple both suck...
Coca-cola however:
1 share of Coca-cola stock ($65.21) payed out $1.76 in dividends in 2010, $1.64 in 2009, $1.52
in 2008, $1.36 in 2007, $1.24 in 2006... For 7.3%, 7.9%, 11.8%, 9.6% dividend growth rates
(7% was through the financial colapse and during this recession).
Lets be very conservative and say 6% a year dividend growth rate
say we buy 10 shares of Coca-cola for $652 and hold them for 30 years, it will pay about $1475
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13. in dividends over that time.
Coca-cola's dividend yield is 2.88% now, lets say it stays the same in 30 years, it's stock price
should be about $372: $3720 for all 10 of your shares.
The total return if you kept reinvesting the dividends might turn $652 into something like $8650
(of course taxes will eat away a bunch of that, and inflation will make it not worth as much).
Now for the other options:
cash: put the $652 under your bed.. In 30 years you have $652 (except it buys 2-3 times less).
Government bonds: at say 4.6%, 30 years: $652 turns into about $2500.
Gold: will gold go from $1432/oz to $19000/oz in 30 years (inflation adjusted that's about
$6000-$7000 in today's dollars)... Which is what it needs to do to keep pace with Coca-cola. (it
might, honestly i don't know; people might also stop drinking Coke, who knows, Pepsi might
finally defeat them)
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