Stock Market For Beginners » guide for dummies

Stock investing for dummies – How to invest in IPOs

admin — Fri, 21 Aug 2009 03:18:54 +0000

In this stock investing for dummies guide, we will talk about the IPOs. “Should I invest in IPOs?” is a very common question in the mind of many investors, especially the beginners in stock market. The IPOs used to be a big hit during the tech bubble days. You were almost guaranteed to make double or even triple digit profits by investing in IPOs of tech stocks which came out during those times. But post tech bubble burst, IPO market has come back to normal.

Stock market investors have come to terms with the reality that not all IPOs will give them huge returns. Therefore caution is required while investing your hard earned money in a new company which is going to be listed in the stock market exchange. Here are a few points which should be considered by stock investors while thinking of investing in stock IPOs.

1. Research the company – The difference between a company who is launching its IPO and an already public company is that t here is not much public information available about the new company freely available. Therefore, it is a must for the investors to research as much as possible about the company through various channels to understand the company background, the management and its policies, their products and their future plans. This way, the investors can find if the offer price is a fair value.

2. Brokers associated with IPO launch – It is always recommended that you go with IPOs which are handled by reputed underwriters and brokers. Though it is not 100% guaranteed that they will bring out a winner, the chances are good that they will do bring quality companies to the public. For example, you should choose an IPO which is being underwritten by Goldman Sachs as compared to a company which is being launched by some ABC unknown company.

3. Prospectus information – It is imperative that the investors read the prospectus carefully. The company is mandated to provide the true picture of the company in prospectus. It may be a very boring read but still needs to be read. It will give risk and opportunities of the company, loans taken by company and its financial health. It will give general insight about company and its financial health which will help you decide whether to invest in that company or not.

4. Lock-in or lock-up period – As per guidelines, the underwriters and insiders are not allowed to sell the shares of the listed company until the lock-up period is over. This lock-up period can be anywhere between 3 months to 2 years. It makes sense to wait till this period is over to determine whether there is any potential in this stock.

5. Time to be skeptic – While investing in IPOs, it is important that you maintain a skeptic mindset. If your broker is pushing you to invest in an IPO, there are chances that the big companies are not buying the shares and a big chunk is left for retail investors. In most cases, this would not be the case therefore you need to be careful of this aspect.

Hopefully, this stock investing for dummies guide would help you when you are considering investments in an IPO.

Get rich off the mutual funds

admin — Tue, 04 Aug 2009 04:02:32 +0000

After my post on the get rich off the stock market I am wondering if you can get rich off the mutual funds. The answer is a resounding yes.Of course the mutual funds are no different than the stock market investing. The only difference is that in mutual funds you are not buying the stocks directly and that will mean that you can even get rich without worrying about the stocks day and in and day out.

Invest time to invest in the regular investing plan of mutual funds.

The best way to get rich off the mutual find is to become a totally passive investor and that will mean that invest the money in the regular systematic investment pan of a mutual fund and then just enjoy the money.

However one thing that you need to be sure of is that you pick the right mutual find or a basket of mutual funds.

The best thing to do is to just blindly invest in the diversified equity mutual funds of the to the top mutual fund companies that is Fidelity and Van Guard. The other option is to invest in the sector specific mutual funds. But investing in sector specific mutual funds is not easy as that will mean that you will have to churn your mutual funds portfolio every now and then to make sure that you are invested in the best mutual finds.

Mutual finds are the best when it comes to investing and enjoy the dollar cost averaging.

There is money to be made in the mutual finds provide you follow that simple strategy which is the buy low and sell high . Apply this to mutual funds too and you will make good money.

If you are looking at the complete listing of the mutual funds as well as the costs and the fees then the best place to go for the is the Morningstar. It has all sorts of tools as well as ratings for the mutual finds.

With stocks the best part is that you will be able to invest directly in the stock market using the index funds.

A lot of funds tell you about the past five years returns but that is not a guarantee but merely indicator of the performance. However it is still much better than having no parameter to go by.

Some tips for investing in mutual funds

Have discipline and patience

Select only the five-star funds

Invest only in no-load funds

Compare the returns over the five years and invest in the best one.

Also for investing in the funds the best thing to do is to open an account with discount stock brokers

Best stock analysis websites – Stock analysis sites which you can use

admin — Thu, 30 Jul 2009 14:59:21 +0000

While doing analysis of stocks or stock market, you need a lot of information. There are various stock analysis websites which are available offering you loads of information mostly for free. In the last few years, the stock market has seen ups and downs therefore it is important that you see a larger picture before you decide to buy any stocks. Last one year data will probably not give you a complete picture.

These websites are a great way to see historic information going back to several years. And the best thing is that they are available online so that you don’t have to buy books or go to library. You can do analysis on any stock, read expert reviews, and see whether the institutions are buying or selling the stock which you are researching. Not only the financial details about the company, these websites also have recommendations from experts regarding buy, sell or hold on that particular stock.

You can see which stocks are at their peak and which are currently at their lows. The news about the companies is also displayed for easier access for the readers. For example, if you go to one of these websites and search on YHOO, you will get every possible detail about Yahoo including their financial details, its financial ratios like P/E ratio, its holdings with different mutual funds, their competitors, historical charts, news about YHOO etc.

People have their favorites and we have ours. Here is a list of some of the best stock analysis websites which many people refer to while doing stock market analysis.

Value Line
Morningstar
MSN Money
Yahoo! Finance
Motley Fool
Dividend Achievers
Seeking Alpha
CNN Money
Reuters
DRIP Investing
Dividend Growth
Financial Webring Forum
WikInvest
StockPickr
Zack’s Investment Research
Big Charts
The Street
Marketwatch
Gummy Stuff
RiskGrades
ValuePro
Yahoo! Industry Center
GuruFocus
Kiplinger

These are some of the best stock analysis websites which we have been following over the last couple of years. All of them are very reliable and keep data up to date thereby making it easier for the investors to research the stocks.

When to buy stocks ?

admin — Mon, 27 Jul 2009 22:04:24 +0000

The most often discussed question is when to buy stocks. I would say that there is nothing like good or bad times and every day and every minute will represent some opportunity or the other to buy stocks.

If you are waiting for that particular good moment to buy a stock then there are definitely some things that you need to understand.

If this is the first time you are buying the stock ever in a stock market then I would suggest buy a very safe stock like the P&G or the Unilever and then try to use the stock market direction for some investment strategies to be tried on. I have suggested these as these are defensive stocks by and large and should help you not lose too much money. That said there are several other stocks that can be defensive and you can use these to buy into the stock market and learn something about the stock market

Use mutual funds

You can also start investing indirectly into the stock market by having the investment made into the reputed mutual funds.

Momentum investing

A lot of people will buy stocks when the markets are rising and the bulls are in full swing however that may nor my not be good time to buy based on your time frame for investment. Most people who are momentum investors have a specific target of gains in mind and they will get off the stock the moment they reach the target.

This is a good way to make money and also enter into the market and make some money however you should be careful about the overall trend and if the trend goes negative you will need to exit the stock and that will mean that you have to have a stop loss strategy.

Buy low sell high

You can use this strategy to enter into the stock market and buy the stocks when the market is down and that will mean when the market is at historic lows like it did in the year 2008 when the mortgage crisis happened. People who had cash invested win good healthy banks stocks. Then when the market recovers you can easily sell in the process making incredible gains.

Value investing

There is a school of thought that some companies may not be bad but the prices are low because of some temporary issues or the general broader market outlook. Scores of investors keep looking at stocks that are value buys. They buy these stocks when low and keep on holding on to these stocks for a long term that is five years or more. If you have not heard about Warren Buffet then I would suggest reading about Warren Buffett to get to know how to value invest.

Read and read more

Read a lot of financial websites like the MSN money Central or the expert advice by several others to get to know what is happening to the broader market.

Do your own thing

Lastly the answer to the question about when to buy stocks will come form you only as you start trading and will start defining your own trading strategy. Read and then apply using own judgment.

Steps to Invest in Stocks For Beginners

admin — Fri, 26 Dec 2008 03:05:46 +0000

As a stock market investing for beginners learning guide the most important thing that you need to know is that what initial steps you need to take invest in stocks as a beginner.

I will list the things here and will follow that up in my posts later on each topic and in fact some of the topics I may have covered in my earlier posts also and I will link to those if needed.

The list of steps as outlined here are

1) The first and foremost you need to understand how the stock market works

2) That translates into NASDAQ Definition

3) Also Dow Jones for beginners

4) Stock Symbols

5) Then you need to think about what kind of risk are willing to take and that usually means

6) Your Investing strategy – Long term versus day trading versus forex market

7) You need to understand the stock market terms and glossary

You should start reading the Wall Street Journal and other investing related magazines

9) Learn about full service brokers and discount brokers and you can learn about brokers for beginners here.

10) Learn about what are penny stocks

After you have learnt about all the above do not fret too much what you have not learnt and rather take it easy as that way you will be able to enjoy the stock market rather than it be a painful thing for you.

The next few steps as well advice is

1) Select a discount broker and put some money in the account.

2) Select a good stock to trade in and put a buy order and that means you should know about good stocks or rather large cap stocks as well as mid cap stocks as well as what are blue chip stocks

3) Also then you should know what is a limit order versus what is market order

4) Then click the buy button and sit and relax. The buy order will be executed.

The next few steps after the stock has been bought are

1) You will need to monitor the stock and that will usually mean either you go to www.cnbc.com or to any other financial market site.

2) You can also use a stock market ticker to make sure that you have the best of the information at your desktop and that way you need not log on to the website every time.

3) The stock if it goes down is an opportunity to buy more if you are a long term investor and is a call to stop your loss if you are not waiting for long term up trends to start. Herein lies the difference in strategy that you have employed.

4) Next comes the decision to sell if the stock is rising and is way ahead of the purchase price. You can either sell it to make good profits or you can buy more thinking it will appreciate all the more. At this point you need to decide what kind of profits do you want an exit the stock.

5) Assuming that you sold the stock the entire set of transactions buy as well as sell will reflect in the portfolio and that portfolio will also tell you how percentage gain you made or percentage loss as well as if you have more than one stock then it will tell about what is the overall gain or loss percentage.

Once you are familiar with the entire process then you will have to think about investing more money and also diversify your stock picking so that you have good defensive stocks which and also some stocks which will give you some good amazing profits over the short period. These stocks may be more risky than the others but that is why they say that stock market is not for the faint hearted.

Best Stock Investments Advice – Follow the Gurus and Guts

admin — Thu, 04 Sep 2008 05:00:24 +0000

Best stock investments advice is what everyone who invests in stock market is looking for and as a stock market for beginners advice I would offer this much. It is really upto you to take a risk and make the best out of the stock investments you have made.

If you are a person who is averse to taking risks in the stock market then you need to get out of the stock market. Stock market is not for the risk averse. For the risk averse the main investment avenue is then the money market mutual funds or the certificates deposit.

Yes but if you want to stick to stock market then you best bet is the stocks which are defensive in nature if you are in the game of the risk averse and not very much high returns. Also if you need more informaion on the Retirement investing tips for beginners
then read this site for soem very good advice.

Personally I would try my hand at going for a stock market portfolio of stocks so that I can diversify my risk. That portfolio will include stocks which are defensive, it will include stocks are more volatile but are high paying and then there are stocks which are in the high risk category and can go either way in a given day but have a potential to make money on any given day. If you want to make money online then you need understand the basics about investment planning.

If you are from the fundamental school of stock picking then you would actually give a thought to how you pick stocks and make sure that you pick stocks for the long term, keep on adding a particular stock to the portfolio in a systematic way and eventually it will pay you a huge sum of money in the long term.

Everyone is now asking about How to make quick money but in the stock market world or in the internet era there is no way you can make money in an easy way . It takes determination and patience and above all a sound strategy

For technical analysis people the long term hold on a stock may not be valid thing but then stock picking is still dependent on the intelligent guesses on the stock market trends.

Stock Portfolio is a must for Stock Market Beginners

admin — Thu, 21 Aug 2008 03:39:03 +0000

Stock portfolio is nothing but a collection of stocks which you have. Most of the big brokerage firms also have a portfolio of stocks. This stock portfolio can help diversify the risk for your.

So as a stock market for beginners tip you should always invest in a number of stocks. This number of stocks that you own then becomes a portfolio.

You can calculate the return on a stock portfolio by some formulae as well you can calculate the alpha and beta of the stock.

As a stock market for dummies advices it is easier to say that never put your eggs in one basket and in this case it means that never put your money in one stock only.

You will lose all your money if the stock goes down so make sure that you spread the risk.

Again managing a portfolio is not easy so make sure that you go with a brokerage firm which can manage the stock for you. Also they give you advice on how to build a portfolio and can prepare a model portfolio for you.

If you are learning to invest in stocks then make sure that you have the best advice from an expert at a brokerage firm so that they can guide and build a good portfolio.

Never spread yourself too thin with a portfolio and stick to only a few stocks that you can reasonably track and mange.

Learn To Invest Stocks As a Stock MArket Beginner

admin — Mon, 04 Aug 2008 13:13:02 +0000

Well as a stock market for beginners help you should know all bout stocks and also learn to invest stocks successfully to make money online with stocks.

Making money online is always a tough game and with all the success of internet there are chances that you will always be able to invest in stocks at a cheaper rate using those online brokerage firms

My most important tip is that to invest in stocks you would need to have the best of advice from a online broker and also about how does the stock market function.

Here are the steps that you need top take to make sure that you are the best in making money via stocks.

Get a stock trading course

Then but a stock simulation game

Then keep aside your money for investing in stocks

Select an online broker

Choose a plan which can keep your brokerage outflow at the minimum

Choose a stock and start investing with that stock.

Never try to emulate what the experts do at the market

Take your time and you will gain confidence about the stocks

Be aware of the market all the time and then think what works well for you and you will succeed.

Invest for long term as opposed to short term for maximum benefit. Patience pays always in life as well as in stocks.

Stock Market Investing for Dummies

admin — Mon, 28 Jul 2008 13:47:40 +0000

As a stock market for beginners help I would suggest hat stock market investing for dummies is a great help. As a beginner we all feel like dummies and after a few false starts we begin to get the hang on the subject and stock market is no different.

Dummies is kind of a way to tell that we all start investing with absolutely “no idea” kind of thing and late on what we do is that we get to all sorts of special ideas and we kind of become the experts.

The idea behind dummies to experts is stock market investing is no different.

Step by step if start following a path you will reach your target.

Making money in the stock market is no different and it always helps to get some insight into what other beginners feel before you take the plunge.

The basic of stock market are:

What is an exchange?

What is a share?

How does the Stock market work?

What are different kinds of trading strategies?

Which is the best online brokerage firm?

What do you understand by a stock Market quote?

What do you mean by P/E and eps?

And lastly when to buy or sell?

All these above are the question that needs to be answered by an expert if you are looking at stock market investing and making money online with the stock market.