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how Do I Initially Begin Buying & Selling Stocks? Should I Look Into Day Trading Penny Stocks ? Or Should I Invest Larger Amounts Into A Few Companies & Wait Until i Can Sell The Stock For More Than I Paid ?

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Im Just Now Looking To Invest In a Few Companies To Make Some Money, I Just Have No Clue Where To Start.
#stockmarket #business #hungryforinformation #entrepreneur

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Dennis’s Answer


Hello Vernon: I've invested in the stock market, mainly my retirement accounts, for about forty years. I make my own investment decisions, so I've probably made every mistake possible. I've subscribed to several investment newsletters over the years and the "experts" who write them probably make more mistakes than I do. On the other hand, some of the ones giving conservative advice do fairly well in the long run. I think, therefore, that investing for the long run makes the most sense.

The advantage of beginning to invest when you're young is that when the market goes down and you suffer a loss, you have time to recover by just being patient. It repeatedly goes go up and goes back down, but over the long run you will come out ahead if you buy the right stocks.

What are the right stocks? Generally they are companies that consistently make steady profits over a number of years. Beware of the "hot stock picks" and those penny stocks (they sell for a penny because they are nearly worthless and will probably stay that way).

I got started investing by opening an account at a discount brokerage. At that time buying and selling a stock, even one with shares costing under $1000, would cost $50 or more at a "full service" broker. Discount brokers now will charge around $7 per trade no matter how big or small it is. So you can start with a few hundred dollars worth of a stock or two and add more as you get more money to invest. Resist jumping in and out of stocks (what is known as churning) in your account because even at $7 per trade you can waste a lot of money. If you have a stock that is doing well, resist taking your profits on it unless there is a solid reason to sell. Let the profits run, but cut your loses if a stock is going down (set a stop price even if it means losing money on it) is a good rule to follow. If you get nervous about a stock that's making a lot of money for you, then sell a fraction of it, maybe half, to lock in profits (this is called milking the cow).

Learning to be a good investor can take a lifetime, but the best advice I can give is to get started ASAP. Open an account at a discount broker and check out investment advice on the internet, such as the Motley Fools. And don't ever ask me for a stock tip if you know what's good for you. LOL