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I have had several CD's in that past and I really have been thinking about investing in stocks to get better returns but I know nothing about stocks and I have a very hard time understanding what they are and how they work.....can someone please clarify what they are, how to invest, and when to get your money out and everything else I need to know in order to invest in them.
Do not get involved investing in something you know nothing about. Go to the library and read introductory investment books. I suggest you go to Morningstar's web site: Morningstar You can read articles about every form of stock market investment and read the forums where you can ask questions.
I only invest in mutual funds which is a way I can own many stocks but do not depend on the performance of an individual stock.
I highly suggest you invest in a stock index like the S&P 500. A stock index is a collection of stocks selected to represent portions of or the whole stock market. By investing in an index your return will mimic very closely the return of the overall stock market. This is important when taking into consideration that less than 20% of mutual funds have managed to outperform the S&P 500 over the past 10 years.
Try the "sticky's" at the top of the portfolio help forum, they give a good primer on indexing, allocation and risk.
Remember: No one cares more about your investments than you do, so learn about keeping your investing costs down and having your investments diversified. Avoid the futility of trying to chase performance trends. Good luck!
Go to your local bookstore and check out the investing section and read read read. Start reading financial newspapers & magazines (Barrons, Investors Business Daily, Wall Street Journal, Business Week, Kiplingers, Money). Watch CNBC when the market is open and the shows Fast Money and Jim Cramers Mad Money.
Be realistic with your expectations. You'll see stocks go up 30%+ in a year and you will get those returns on some stocks but that isn't the norm. Realistically you should just be happy if you outperform the market. For example the S&P 500 is down 11% over the past 12 months so you should just be happy if you only lost 8-9%. Some years the market is up 30% and you should be happy if you make 35%.
Diversify your portfolio. Don't be too concentrated in one industry. I have my portfolio in 5 different industries.
DON'T PANIC when the market is falling. There will be days when your portfolio will lose 5%+ of it's value and you have to be prepared to stomach those temporary loses. There will also be days when your portfolio will increase by 5%+ in one day (take the good with the bad)
Stay away from penny stocks (stocks under $1). There is a reason why it's a penny stock and that is usually because it's a poorly run company.
Be prepared to pay the tax man and keep records of all your transactions.
Don't make decisions too quickly. Take the time to research the companies before you invest in them.
Your best bet is to buy mutual funds. There are funds for everything you could think of, everything from renewable energy funds, oil funds, retail funds, real estate funds, you name it. What I would do is buy mutual funds that you think were going to go up. If you think real estate is going to go up then buy real estate mutual funds so on so forth.
Your best bet is to buy mutual funds. There are funds for everything you could think of, everything from renewable energy funds, oil funds, retail funds, real estate funds, you name it. What I would do is buy mutual funds that you think were going to go up. If you think real estate is going to go up then buy real estate mutual funds so on so forth.
You don't need mutual funds if you diversify. Diversity lowers your risk. In addition, with mutual funds you really have no control over what taxes you'll end up paying. The fund can lose money for the year and you can still owe taxes. See the link below for more information about mutual funds and taxes.
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