Your Questions About Stocks And Bonds Game

George asks…

Help on stock choice for school game!! :)?

Oover the next week. I can get purchase as many stocks as I want per day, but have to make a purchase three of the next 7 days. I want to know what stocks, mutual stocks, or bonds would be the best to invest in, if the contest ends 12/18/2009. I have $100,000 and can go up to 200,000 but would have to pay interest. Thanks 😀

financi4 answers:

1) AAPL, long
2) GE, long
3) AA, long

4) Don’t day-trade or over trade.

Good Luck,

Paul asks…

How many millionaires are there in the U. S. from winning the lottery, contests or game shows?

There are an estimated 8.9 million millionaire households across the country, as reported by TNS Financial Services and CNN Money. That’s about 7% of the population. Most of them have investment strategies in common. Nearly 19% of them own part or all of a business or professional practice, 46% own investment property, 70% own stocks and bonds, and 68% own mutual funds. I want to know how many of them became millionaires by luck or chance only.

financi4 answers:

I saw the stat on this one time. It was 1,878. Would have been more but so many of them go on spending sprees when they get the money they end up broke like when they started.

Joseph asks…

What is the best least expensive asset to buy as a novice investor besides stocks and bonds?

I’ve been winning the game Cashflow 202 web game and I want to invest in the real world. I don’t have much money (yet) but I have some financial education. My credit line is small. What’s the best way to get started with creating good dept and cashflow with minimal investment? I’m not interested in investing in stocks of any kinds, just businesses, real estate and related.
Hey, some of you guys are the door to door salesmen who don’t read the sign on the door “No Soliciting.” I’m not interested in anything related to the stock market.. Please don’t answer with links to your marketing schemes!
I have $500 – $1000 to start investing with at first.

financi4 answers:

With so little money, you can’t invest in real estate. It would be very hard to find a business that cost so little to start. Start saving up more money.

Daniel asks…

Investing at a young age, Short term buying or for the long run?

I’m 18 and in army training right now. I only make 1,500 a month, but I have absolutely no REQUIRED expenses (gas, internet, all things I could live without) I have 1,000 in a couple usaa mutual funds, ( 200 in different funds) and its made me 50 bucks in around 2 months. It doesn’t seem like alot to me now, but I have 5k in a saving account that made me 1.25 $ last year..

My dad says I’m better off throwing my money in a savings account but I’ve been reading books watching shows and I want to get into stocks.

I basically have 6 months to build the basis of my investments and then I can’t put anything into it after that. Is it worth the risk and gamble of getting into stocks, mutual funds , bonds etc or should i just shut myself off of this idea and play it safe? Thanks in advance for answers.
5 hours ago – 4 days left to answer.
Additional Details

2 things that influenced me was a teacher and a sgt who talked to me about it, over time, while throwing their dividends back into the stock, their stocks have went from 1000 initial investments to around 20 k over 15-20 years, crazy thought. Also it’s kinda funny, I look into google stocks at the beginning of my senior year for a stock market game I had to do, and at the end of the game they jumped up roughly 500 $ per stock. I wan’t the short term gamble and the long term investment sides of it, but I don’t know if I can afford it.
5 hours ago

I’m reading the books to learn the basic facts and terminology, As of right now I’d have a hard time looking at a stock and decifering what all the details meant. I also have no knowledge of how the fees or taxes work. Any idea where to look up all this at?

financi4 answers:

Investing is for life. While you work you invest, when you retire, you distribute from the investments.

You’ve often heard the adage, buy low and sell high, well how is it that you can buy low and sell high? You do so with rebalancing. If you had $1,000 and invested 50% in a stock and 50% in cash, you would start with $500 stock and $500 cash, if the stock dropped in half you would have $250 stock and $500 cash so you would rebalance by buying $125 of stock giving you $375 stock and $375 cash, if the stock should return to it’s regular price then you would have $750 stock and $375 cash for a portfolio value of $1,125. Had the stock doubled then dropped, you would’ve gone from $500 / $500 to $1,000 / $500, rebalanced to $750 / $750 and dropped to $375 / $750 for a balance of $1,125.

Ben Graham says it’s best to rebalance 45% stock, 55% bonds and to never go below 25% or over 80% stocks. Markowitz ( Efficient Frontier ) says the safest is 25% stocks, 75% bonds, safer than 100% bonds and better returns while 50% stocks and 50% bonds have the same risk as 100% bonds but much better returns. Claude Shannon at MIT proved that a 50/50 split between a random walk and cash had the optimal gain. So if 50/50 or rather 45/55 is optimal, why do they say be aggressive when young?

Let’s say that you were going to max out your IRA with $416.66 a month from the time you’re 18 till you are 60 which is 42 years. That would be like owning a bond that paid $416.66 a month for 18 years and had a zero face value, what’s the market value of such a bond? If we use 4.4% per annum returns which is the current expectation from the stock market due to the total market value to GDP ratio then the value of such a bond would be $466.66 * ( ( 1 – 1 / 1.044^42 ) / ( 1 – 1 / 1.044^( 1 / 12 ) ) – 1 ) = $108,463.99 so as long as you’ve committed to making that $466.66 per month deposit, you effectively have $108,463.99 invested in a bond paying 4.4% ( you would adjust this to be as high as you expect from your investments cause you can’t sell your job ). That means your portfolio can be more aggressive till your equity equals your bonds plus the present value in your remaining contributions. It’s probably still wise to heed Ben Grahams advice not to exceed 80% equity.

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The end of an investing era

The end of an investing era

Though few statistics are available, there are many indications individuals have abandoned individual stocks as their preferred form of equity investing. Remember how people worshipped Cisco Systems (NASDAQ:CSCO) , Qualcomm (NASDAQ:QCOM) , and
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Your Questions About Investing In Gold

Chris asks…

Is investing in gold a wise choice as of now?

Our dollar is tanking while gold is skyrocketing in price by the day. Most people are investing in gold as it is clear there is a financial meltdown that is looming. But, how wise would this be? I mean, eventually, wouldn’t demand for gold decrease if total financial meltdown does not occur and thus drive the price for gold down? How wise would it be to invest in gold as of now?

financi4 answers:

Gold is a bubble right now. It still may go up because of this latest scare and eventually the economy is going to have re-inflate at some point, so it’s a good bet. But sleep with one eye opened, bubbles burst fast and violently. I made if through the tech bubble crash and avoided the real estate bubble crash, so I am staying out of the gold bubble. You lose a lot of money in bubble crashes if you are still in the bubble when it happens. Perhaps, trade gold would be a better bet? I don’t have the stomach to chase bubbles anymore, the pain from the tech bubble crash still hurts.

Paul asks…

Can anyone explain the process for investing in gold?

I tried to have my 401k rolled over to investing only in gold. They said that it could not be done since gold/silver is a commodity. Can anyone tell me the best way to get OUT of the market and get INTO gold? I am convinced our dollar will collapse catastrophically and only those with gold stand a chance at even surviving without being a ward of the state and enslaved. Your help is appreciated.

financi4 answers:

You want a gold backed IRA. There are a few out there, most of them in Texas.

Be careful though. If you are going to have gold held for you. I would recommend you work with a broker that allows you to store the gold with a 3rd party.

Some will try to sell you a plan and store your gold but I would stay away from them. It becomes too easy for them to get reckless with your assets. Stick to a 3rd party.

Lastly, stay away from Exchange Traded Funds (ETFs) or any other paper note that only claims you own gold. If you don’t have possession of it, you don’t own it. It can all disappear in a flurry of paperwork.

I am currently picking gold and silver stocks. If there is a large and continued increase in the demand, the value of the stock should rise proportionately.

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Is Value Investing Dead? Hardly, Says Buffett-Based Strategy

Is Value Investing Dead? Hardly, Says Buffett-Based Strategy

There is talk of a "New Normal", and of new investment paradigms, and we've been told that value investing, long-term investing, and even equities as a whole are all "dead". In short, the old ways of making money through investing just aren't going to
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Oman Air investing more in staff training

Oman Air investing more in staff training

Oman Air CEO Wayne Pearce said: “One of Oman Air's greatest assets is its people and we are proud to be investing in increased training opportunities over the coming year.” The CEO said: ““The training we have provided to staff over the last two years
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Your Questions About Purchased Apps

Ken asks…

How to delete apps from purchased section on the iPhone app store?

I have just noticed that apple have added a purchased apps section in the app store. It has every single app that I have downloaded since owning my phone. Is there anyway that I can delete any unwanted apps that where free or a waste of money?

financi4 answers:

There is no way to remove it other than syncing your itouch or iphone your library after removing the app

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