My Opininon on investing.

by Money Man

I AM NOT A PROFESSIONAL this is just my oppinion.

I took a few finance and business classes in college and I enjoy reading and researching it in my free time. I consider it an essential hobby. So, that said, my advice is just that. My ADVICE, feel free to take it or not. Take what I say with a pinch of salt.

So here we go.

Two things:

#1 How you invest your money is totally based on YOUR personality and what YOUR needs you have. You have to sit down and, without lying to yourself, figure out what you can handle, what you can afford, and what you need.



If you've got the time to constantly research and watch every nuance of stocks, then perhaps the penny trading (buying stocks for less than $3 a share, by MY definition) is your thing. However, if you're not able to take the elation of gaining hundreds or thousands of dollars in one day or the stress of losing that amount and hundreds or thousands more the next day; don't do it. For the most part, you're just gambling because the cost jumps and drops are pretty much based on human emotion. And since you probably aren't Star Jones or the Jamacian psychic lady on TV, you don't know exactly how that's going to work out. However, when you get lucky, it's a rush and can be quite fun. Just be prepared for the pits, too.



If you know, or have the interest to learn, how to read a prospectus and/or financial reports, then there are plenty of growth stocks you can invest in. These are companies that are priced between $3 and about $15 that have a good potential for growth if they keep growing. It will take time, hard work, lots of research, and a bit of luck, but if you're smart and learn about your choices, you don't run a huge risk for losing your money and you can see some outstanding gains.



If you're looking for some stability and not in dire need of money (or are open to the possibility of losing it) then you might want to look at mutual funds. I'd say look at these. They are relatively safe and you won't have to concern yourself about losing all your hard earned money. However, you are most likely not going to become an overnight millionaire because of the fact that you own small shares of many stocks, so one of them going through the roof isn't exactly going to change the price of your fund drastically.

Dow Blue Chip stocks (big companies like GM, GE, Microsoft, IBM, INTEL, etc.) are another steady investment and stable option, however, their stock prices are quite high. This is for a reason though. Cause they most likely aren't going to drop to much either, you get paid for owning them (dividends) and you have that every awesome "split" to hope for.



Oh no, the can of worms can keep going and going.

So 2nd lesson second lesson:



Do some study and read! Get some books on different investment strategies. There are hundreds of them out there on all different types of investing. Take them all with a grain of salt, because their writers are trying to get you to join their strategy. However, I'm sure you'll find one that fits you. My personal favorites are "Beating the Dow" by Michael O'Higgins and "The Motley Fool Investor's Guide" by David and Tom Gardner. Their strategies just make the most sense to me, but they might be BS to you. So, you've just got to read and research to find out what type of investment fits you.

Good luck with you investing in the stock market and I hope everybody gets rich.