Investing For Average Joes #6

The current market is even more unpredictable than any of the previous year's markets because we have not seen the bottoming-out of the economy yet. The Stock Market seems to have bottomed and is back on a general rise but it could easily slip down again if any more major companies fail. So it would be wise to learn techniques for saving what profits we can gain.

Now that I've covered the basic things to start your investing portfolio, it's time to add tools to keep your money as safe as can be, given the market's current volition. One of these tools is called a 25% trailing stop. It's a bit complicated at first, and can be later, as well, but it is a vital tool to keep losses to a minimum.

Let's say you buy XYZ at $2.00 a share. Calculate 25% of $2.00, which is $.50, and set your stop-loss with your stock manager or stock purchasing site at $1.50. This way, it will keep you from losing more than 25% should the stock drop for some reason. As the stock grows, change the setting so that it keeps up with the current price. You want to keep the mark at 25% of the stock's highest point.

So if XYZ grows to $3.00, 25% would be $.75, so you would change your stop-loss setting to $2.25. In this example, the worst you could do is get a gain of 25 cents per share. If XYZ goes to $4.00, 25% becomes $1, so you set your stop loss at $3 and the worst you can do is a profit of $1 per share. This can be complicated, especially if you are not a math person, but it is necessary and has saved me money several times already this year.

Sharebuilder.com has a stop-loss option for every stock in an account. It can seem tedious to set stop-loss orders for all our stocks but it does two things: It keeps your losses to a minimum and it keeps you aware of your portfolio. Being aware is what could have saved everyone's accounts last October.

In fact, if everyone had had a 25% trailing stop on all their accounts last October, think of all the money that would have been saved! I know 2 people that lost more than 50% of the value of their portfolios and I'm sure you know others, as well.

So let's spread the word and help America keep Her losses at a minimum. Perhaps that's a bit dramatic, but it IS the Speed Of Life, after all. See you next time. Good Investing!!!

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

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