7 answers
1
Question
Asked
1018 views
As a Stock inverstor, how do you know or learn what stocks will grow your money?
Im a senior interested in exercise science, I plan to own my own private gym but I also want to earn passive income from stocks.
Login to comment
7 answers
Updated
Jonathan’s Answer
Garret and Michales’ answers are up to par with how I would have answered this.
I have been a hobby investor for the past thirteen years and have participated in regular stocks, bonds, crypto, REITs, option and option trading strategies.
First and foremost obtaining education on the stock market and money management is the best start and you can’t go wrong with simple Google search looking up the top 10 best books on finance and no doubt will include: Rich Dad Poor Dad, The Richest man in Babylon, The Millionaire Next Door, and Think and Grow Rich to name a few.
In an age where we have YouTube there are also some capable channels that provide valuable info but echoing Garret’s previous comment, caution on who you take advice from.
I think a very good book that sums up the stock market and your expected experience is A Random Wall Down Wall Street.
Trading is a long term goal, and sure there are passive strategies such as choosing index funds, or large diverse sets of investments on a schedule process. This method is passive in a sense as you monthly would contribute to such a fund.
Passive income could also be discussed as dividends which certain stocks will pay monthly or quarterly monies based on how much you I w invested. This method is popular and has its pro/con. Yes you will get paid the dividend, yes it’s passive, but there are tax implications to consider. There is also the consideration that most dividend paying stocks that pay a high percentage typically won’t grow much so it’s argued if your money may be better placed elsewhere. This is an argument as old as time.
After reading and doing your own research you may quickly realize that no one person or organization can properly time the market or forecast the future of the market or an individual stock.
Long term and diversified investments are the best option for most investors. Success can be achieved through a select index funds that cover a broad selection of stocks. Time is your friend, invest as early as you can, as often as you can, within reason and let the compounding interest and time do the rest.
This may look like $10/week, $100/month, or whatever you can afford. Don’t invest any money you are not comfortable losing value on or being unable to withdraw from for a year to few years.
The fact you are expressing interest this early is a great sign.
Best of luck,
I have been a hobby investor for the past thirteen years and have participated in regular stocks, bonds, crypto, REITs, option and option trading strategies.
First and foremost obtaining education on the stock market and money management is the best start and you can’t go wrong with simple Google search looking up the top 10 best books on finance and no doubt will include: Rich Dad Poor Dad, The Richest man in Babylon, The Millionaire Next Door, and Think and Grow Rich to name a few.
In an age where we have YouTube there are also some capable channels that provide valuable info but echoing Garret’s previous comment, caution on who you take advice from.
I think a very good book that sums up the stock market and your expected experience is A Random Wall Down Wall Street.
Trading is a long term goal, and sure there are passive strategies such as choosing index funds, or large diverse sets of investments on a schedule process. This method is passive in a sense as you monthly would contribute to such a fund.
Passive income could also be discussed as dividends which certain stocks will pay monthly or quarterly monies based on how much you I w invested. This method is popular and has its pro/con. Yes you will get paid the dividend, yes it’s passive, but there are tax implications to consider. There is also the consideration that most dividend paying stocks that pay a high percentage typically won’t grow much so it’s argued if your money may be better placed elsewhere. This is an argument as old as time.
After reading and doing your own research you may quickly realize that no one person or organization can properly time the market or forecast the future of the market or an individual stock.
Long term and diversified investments are the best option for most investors. Success can be achieved through a select index funds that cover a broad selection of stocks. Time is your friend, invest as early as you can, as often as you can, within reason and let the compounding interest and time do the rest.
This may look like $10/week, $100/month, or whatever you can afford. Don’t invest any money you are not comfortable losing value on or being unable to withdraw from for a year to few years.
The fact you are expressing interest this early is a great sign.
Best of luck,
Updated
Jackson’s Answer
Some great resources were shared earlier, but here's another one in case you want to do some more research.
I was in junior year of high school when I first got into investing, and I think the most important thing here is to get in as early as possible. There is a concept called compounding, where your returns begin generating their own returns over time, and the earlier you start, the larger it can grow.
Here's a quick example that shows this concept:
If you held the an investment of $1000 in the S&P 500 (investing into an index of 500 major U.S. companies) until age 50:
- Starting at age 18 (32 years invested) would give you about $21,114.
- Starting at age 20 (30 years invested) would give you about $17,449.
- The difference is about $3,664, which is roughly 21 percent more by starting just two years earlier.
You don't need to touch that money once its invested, just let it sit and watch it grow.
Also, I first became introduced to investing through Warren Buffets ideology of value investing: https://www.investopedia.com/articles/01/071801.asp
Heres a short summary of it: Warren Buffett’s value investing strategy is about buying companies for less than what they are really worth by looking at things like their profits, debt, and overall performance. He focuses on strong businesses he believes will grow over time, rather than worrying about short-term market ups and downs.
If you are just starting out, focus on investing in companies you believe in, that have stood the test of time, and that make products or services you notice being used everywhere. When you are new to investing, keep it simple and avoid getting too fancy with complicated strategies or risky picks.
I was in junior year of high school when I first got into investing, and I think the most important thing here is to get in as early as possible. There is a concept called compounding, where your returns begin generating their own returns over time, and the earlier you start, the larger it can grow.
Here's a quick example that shows this concept:
If you held the an investment of $1000 in the S&P 500 (investing into an index of 500 major U.S. companies) until age 50:
- Starting at age 18 (32 years invested) would give you about $21,114.
- Starting at age 20 (30 years invested) would give you about $17,449.
- The difference is about $3,664, which is roughly 21 percent more by starting just two years earlier.
You don't need to touch that money once its invested, just let it sit and watch it grow.
Also, I first became introduced to investing through Warren Buffets ideology of value investing: https://www.investopedia.com/articles/01/071801.asp
Heres a short summary of it: Warren Buffett’s value investing strategy is about buying companies for less than what they are really worth by looking at things like their profits, debt, and overall performance. He focuses on strong businesses he believes will grow over time, rather than worrying about short-term market ups and downs.
If you are just starting out, focus on investing in companies you believe in, that have stood the test of time, and that make products or services you notice being used everywhere. When you are new to investing, keep it simple and avoid getting too fancy with complicated strategies or risky picks.
Updated
Jonathan’s Answer
Garret and Michales’ answers are up to par with how I would have answered this.
I have been a hobby investor for the past thirteen years and have participated in regular stocks, bonds, crypto, REITs, option and option trading strategies.
First and foremost obtaining education on the stock market and money management is the best start and you can’t go wrong with simple Google search looking up the top 10 best books on finance and no doubt will include: Rich Dad Poor Dad, The Richest man in Babylon, The Millionaire Next Door, and Think and Grow Rich to name a few.
In an age where we have YouTube there are also some capable channels that provide valuable info but echoing Garret’s previous comment, caution on who you take advice from.
I think a very good book that sums up the stock market and your expected experience is A Random Wall Down Wall Street.
Trading is a long term goal, and sure there are passive strategies such as choosing index funds, or large diverse sets of investments on a schedule process. This method is passive in a sense as you monthly would contribute to such a fund.
Passive income could also be discussed as dividends which certain stocks will pay monthly or quarterly monies based on how much you I w invested. This method is popular and has its pro/con. Yes you will get paid the dividend, yes it’s passive, but there are tax implications to consider. There is also the consideration that most dividend paying stocks that pay a high percentage typically won’t grow much so it’s argued if your money may be better placed elsewhere. This is an argument as old as time.
After reading and doing your own research you may quickly realize that no one person or organization and properly time the market or forecast the future of the market or an individual stock.
Long term and diversified investments are the best option for most investors. Success can be achieved through a select index funds that cover a broad selection of stocks. Time is your friend, invest as early as you can, as often as you can, within reason and let the compounding interest and time do the rest.
This may look like $10/week, $100/month, or whatever you can afford. Don’t invest any money you are not comfortable losing value on or being unable to withdraw from for a year to few years.
The fact you are expressing interest this early is a great sign.
Best of luck,
I have been a hobby investor for the past thirteen years and have participated in regular stocks, bonds, crypto, REITs, option and option trading strategies.
First and foremost obtaining education on the stock market and money management is the best start and you can’t go wrong with simple Google search looking up the top 10 best books on finance and no doubt will include: Rich Dad Poor Dad, The Richest man in Babylon, The Millionaire Next Door, and Think and Grow Rich to name a few.
In an age where we have YouTube there are also some capable channels that provide valuable info but echoing Garret’s previous comment, caution on who you take advice from.
I think a very good book that sums up the stock market and your expected experience is A Random Wall Down Wall Street.
Trading is a long term goal, and sure there are passive strategies such as choosing index funds, or large diverse sets of investments on a schedule process. This method is passive in a sense as you monthly would contribute to such a fund.
Passive income could also be discussed as dividends which certain stocks will pay monthly or quarterly monies based on how much you I w invested. This method is popular and has its pro/con. Yes you will get paid the dividend, yes it’s passive, but there are tax implications to consider. There is also the consideration that most dividend paying stocks that pay a high percentage typically won’t grow much so it’s argued if your money may be better placed elsewhere. This is an argument as old as time.
After reading and doing your own research you may quickly realize that no one person or organization and properly time the market or forecast the future of the market or an individual stock.
Long term and diversified investments are the best option for most investors. Success can be achieved through a select index funds that cover a broad selection of stocks. Time is your friend, invest as early as you can, as often as you can, within reason and let the compounding interest and time do the rest.
This may look like $10/week, $100/month, or whatever you can afford. Don’t invest any money you are not comfortable losing value on or being unable to withdraw from for a year to few years.
The fact you are expressing interest this early is a great sign.
Best of luck,
Updated
Shaneh’s Answer
I'm just in the middle of a move right now but I'll have all my stuff unboxed by January 1st if you want to reach out to me on linkedin and remind me to tell you the name of the two books I read. Someone gifted me these two books for christmas when I was 25 and i remember being upset -- turns out it was the greatest gift! I started investing after reading them. Like what other people already said, it's kind of hard to really know WHICH stocks to buy but the books I read were kinda like "for dummies" type books, and just tell you HOW to invest and what to invest-- the safe bets. Grocery stores, old banks, etc.. stocks that give you back dividends. You're not gonna be making passive income right away but once you read these two books you'll understand how it'll work out for you in the long run.
Also side note, since you're still so young, if you haven't already - you should be learning about crypto. I kinda gave up on it a few years ago and I'm trying to catch up now. It's high risk, high reward with a lot of it but there's also low risk stuff you can invest in. Either way, I think it would be extremely valuable to learn about for someone that's young because in a few decades, crypto will be the norm so it's still early enough to get in now.
Also side note, since you're still so young, if you haven't already - you should be learning about crypto. I kinda gave up on it a few years ago and I'm trying to catch up now. It's high risk, high reward with a lot of it but there's also low risk stuff you can invest in. Either way, I think it would be extremely valuable to learn about for someone that's young because in a few decades, crypto will be the norm so it's still early enough to get in now.
Updated
Michael’s Answer
Hi Jamir,
Investing is a long game, so it's great that you are already thinking about investing for your future.
I would highly recommend you listen to the Rich Habits Podcast: https://richhabitspodcast.com/ to gain their perspective. You will learn A LOT about how to best position your finances in a way that works for you. I certainly have.
Hope this helps!
Investing is a long game, so it's great that you are already thinking about investing for your future.
I would highly recommend you listen to the Rich Habits Podcast: https://richhabitspodcast.com/ to gain their perspective. You will learn A LOT about how to best position your finances in a way that works for you. I certainly have.
Hope this helps!
Updated
Garrett’s Answer
So first 8 out of 10 people who "day trade" invest in single stocks end up broke 2ed there is no such thing as passive income that's a TikTok thing and they're is just no such thing unless your talking about your 401k then invest in good mutual funds with a good long track record 20+ years and stay in don't jump in and out trying to time the market
Hi Garrett! You mentioned an interesting statistic that "8 out of 10 people who 'day trade'...end up broke". Could you please cite your sources for that number? This can help learners decide if the stock market is something that they actually want to participate in
Gurpreet Lally, Admin
Updated
Jeffrey’s Answer
You've received some great advice so far, and kudos to you for planning for the long term here! Stocks are a great way to create long-term wealth, but it requires patience and a willingness to weather the ups an downs of a dynamic market - buckle up, but you got this!
One thing I'd recommend is, if you haven't already, invest some time in learning some of the basic principles of how markets work, the different kinds of investments you can make, and especially the general levels of risk involved with each. A great resource I'd highly recommend is a book called, "A Random Walk Down Wall Street" (https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338). It covers everything from the basics to more advanced trading topics like options and derivatives. And it even looks like it's been refreshed several times over since it was recommended to me years ago.
Hope this helps, and wishing you all the best with your investments and your future gym!
One thing I'd recommend is, if you haven't already, invest some time in learning some of the basic principles of how markets work, the different kinds of investments you can make, and especially the general levels of risk involved with each. A great resource I'd highly recommend is a book called, "A Random Walk Down Wall Street" (https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338). It covers everything from the basics to more advanced trading topics like options and derivatives. And it even looks like it's been refreshed several times over since it was recommended to me years ago.
Hope this helps, and wishing you all the best with your investments and your future gym!