Investing For Average Joes #5

Let's talk about research. Before you buy anything, it's good to research it and find out if it's even worth buying. There are many places to get research about the companies in which we would like to invest. Sharebuilder has many research tools for account holders. If you google "stock research" , I'm sure you will find many sites that can help you. The library has a multitude of sources, as well.

First, you should decide what companies that you don't want to be connected to for whatever reason. Maybe you don't want to invest in oil companies because they help to pollute the environment or some other moral issue. Once you decide which kinds of companies you don't want, all the others are fair game, so to speak.

When I get a tip on a stock from the Oxford Club, I read all of their info on the stock, which is extensive, and the I check the history of how it has done in the past. I look at 1 day, 1 week, 1 month, 3 months, 6 months, 1 year, 2 years. I like to see an upward trending graph but it's ok if the dips follow the market dips.

Next, I want to see how much it is trading for now. My general rule is less than $20 and preferably less than $10. This works for me because I don't have a large amount of cash available so my gains will be more easily realized. I like to buy in 100 share blocks so that if the stock goes up or down $.01, my share holdings go up or down $1.00 which makes it easier to keep up with how it's doing.

Sharebuilder charges a small fee of $.005 per share on orders over 1000 shares so if I buy or sell
more than 1000 shares, I do it in 1000 share blocks. I'm a small time investor so every cent counts but you may feel otherwise. When I get to the point that I'm buying or selling10K shares at a time, I may ignore the fee.

It may seem enticing to buy penny stocks because you can double your money, in theory, faster than stocks of $1 or more but you can also lose money faster. In some cases, you can lose all of your holdings in 1 day, depending on how the company is doing. Most stocks that are trading below $1 are from companies that are not doing well.

Take Sirius XM Radio, for example. One year ago, the stock was trading at $2.42 per share. In October when the market crashed, it fell to $.06 per share. You might think that at $.06 per share, you could double your money if it only went to $.12, which is true, but if you had checked out the company, they were about to go into bankruptcy which could have meant that they would have lost all value, hence all your investment would have vanished.

That's all I have for now. Next time, I'll talk about how to set up a trailing stop to keep your losses low and other helpful hints. Til then, happy investing.

Investing For Average Joes #3

There are many books you can read to determine how to invest in the stock market. So many, in fact, that choosing one might be daunting. "Investing For Dummies", if it exists, would be a good one given that those "dummies" books are well written and easy to understand. I just jumped into the market without any particular plan, which turned out to be expensive. But the hard way is the sure way.

The first thing you need to determine is what kind of investor you are; conservative, moderate, or aggressive. Knowing what you are will make your investing so much easier. Personally, I am aggressive because I want to see some results before I get old but whatever you are is perfectly ok.

Conservative investors want their investments to be as safe as possible with the least risk involved. They like their money and they want to keep it. Conservatives like bonds for their low risk and pre-determined yield. Conservatives are happy with low yields as long as they know their money will be there no matter what happens.

Aggressive investors realize that money is fluid and can be made or lost easily. They are willing to accept high risk for high gain. Sometimes that involves losing but there are ways to limit losses so thet they don't get out of hand. Aggressive investors like stocks, commodities, options, and the like. They are jumpers and are ready to get in or out at a moment's notice.

Moderate investors like a little of both. They are mutual fund and EFT traders. They buy stocks for long term commitments and will accept some risk if the deal looks promising. Moderates will hold some bonds for stability and spread out their portfolios. Moderate is a good place to start because you can quickly find out where you stand.

One good way to begin learning is to paper trade. In other words, pick some stocks from companies that you like and write down their prices. Then choose a number of shares as you would if you were actually buying them. Keep track of the market prices for a month and see how you would have fared had you bought the stock.

When you think you are ready to start investing for real, if you will email me your name and email address, I will send an invitation to Sharebuilder, which will give you $25 when you open an account. I get a few free automatic investments which I rarely use but your free $25 makes it worth it to me. You can also click on the Sharebuilder ad on this site but I don't know if they give the $25 that way or not.

Either way, Sharebuilder is the easiest, cheapest way to invest online. They have so many helpful tools to assist you from research to taxes and it's easy to understand. They won't allow you to invest in penny stocks but I am going to talk about penny stocks in another post. At the very least, click on Sharebuilder and check 'em out. I know you will like what you see.

More Investment Info For Us Average Joes

As a follow up to a previous post, "Investing For Average Joes", I thought I would include a few of the things I've learned since becoming an investor. Some of these things may be common sense to some of you and they may be brand new but you should be able to use something to help you with your investing.

One of the coolest things to do is, once you've bought a stock and it has been going up, keep an eye on it. When your stock reaches 100% above where you bought it, sell half of it to pull out your cost, so that all you have left is profit. This does two important things. One, it takes all the worry out of the equation so you can watch the stock from a comfort zone of knowing it's free money. Two, it creates more cash to invest.

I like to keep a chunk of cash in my money market account so that I have cash available should an investment opportunity arise. It is so frustrating to see an opportunity and not have any cash ready to be invested. I use www.sharebuilder.com as my trading account and it can take
2-3 days to deposit funds depending on which bank I use so if I get word from www.oxfordclub.com about a company that looks promising I want to be ready to jump in.

Before the economy took a dump, I was getting a small return on my money market account but now it is down to almost nothing. For this reason, I like to keep cash in my www.paypal.com account. Paypal pays about 1%, which is quite a bit more than a savings account at the bank. Banks have dropped the savings account interest to as low as 0.1% just so they can say it is a savings account. I think we should all band together and demand 6% on our checkings accounts but that's another story.

Paypal takes about two days to recognize a deposit but you can get a debit card to make withdrawels just like a checking account. In fact, using paypal as your checking account would make sense. 1% isn't much but it's a far sight better than nothing. Paypal also has a neat affiliation program. If you can get a business to create a new Paypal account, they will pay you 1% of the money that flows through the business account for an entire year. That could be substantial depending on the business.

I sort of got off the beaten path but it's all good info and certainly worth the Speed Of Life. I'll be adding a new post soon so watch for it and good investing!

Investing For Average Joes

Have you ever wanted to invest in the stock market but were afraid to because you thought you'd lose money? Or maybe you felt intimidated because you had no clue about how to get started, where to go, etc.? You can get a broker but they tend to be expensive and do not always manage funds the way you would like them to do.

The first thing you can do is check out www.sharebuilder.com and open an account. They don't have any minimum balances, nor do they have any inactivation fees like some of the other online trading sites. They have lots of free information about how to trade and what kind of trading you should do considering your situation.

Let's face it, everyone is different and everyone has a different situation as far as how much extra money they have. The experts say to give 10%, save 10%, and live on 80%. Unless you've been doing that already, it can take some serious changes in the way you deal with your money.

But if you are in a situation where you can save 10%, then some of that 10% should be invested in the stock market because it is a sound place to grow money. It has ups and downs, and if you sit back and let nature take it's course and don't intervene, you could lose money, like many people did by not paying attention.

Perhaps, though, you are not a sitter and you would like to jump on the band wagon and really watch your assets grow. In that case, you should subscribe to The Oxford Club Communique at www.oxfordclub.com , the place where investing is an art form. They are not brokers so they can't give advice or tell you how to trade but they can do research and make suggestions.

For a modest subscription fee, you will recieve daily emails with timely market news and information, tips and strategies on how to trade and when to sell. They have a strategy for selling that keeps you from losing too much when the market turns bear and some excellent suggestions for when the bulls are running. You'll get a monthly newsletter chock full of information on the market and what the top traders are doing. They'll even pick a few top trader brains to get idewas on what the future holds. It's truely a phenomenal package.

Since I subscribed to The Oxford Club in February, my stock portfolio is up 36%! That's only four months, and during an unstable market. If nothing changes, that would be 108% for the year. The old school ways say if you get 15% per year you are doing well; 20% and your money doubles in four years. My money appears to be on the track to double this year. That's quite a bit better than the old school.

These are my personal results and yours will likely vary but if I had bought every suggestion the Oxford Club gave, and in a timely manner, according to their records, I would be up 76%. I'm not very experienced yet but I know a good thing when I see it and I cannot thank them enough for helping me to be a better investor.

The key to doing anything is to DO IT. The longer you wait on the sidelines, the less time you have left to accomplish your goals. So are you a sitter or a jumper? If you really want to retire some day with something leftover from all your hard toil and trouble, be a jumper. Start investing in your future so that when you get there, your future will be happily waiting.

---some information taken from www.sharebuilder.com and www.oxfordclub.com