Your Questions About Investing

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Paul asks…

What do I need to know before investing in a new company?

No one in my family has EVER invested money. We save. I was always taught it was a gamble, and “If it seems too good to be true, it probably is”.
Someone close to me has recently invested money into a new company, and got a LARGE return in just one month. My husband is now wanting to invest as much money as we can also.
What would I even need to know before investing any money?
Please, no technical terms, like I said, I’ve never invested.

Justin answers:

Dont invest more than you can afford to lose. If they have had a huge return depending on how big its been they could be in small cap also known as oenny stocks which are very risky and you could lose alot if not all. Also if its went up alot latley i could be in need of a correction were the price would pu;; back. Hope this helps a little.

Ken asks…

What is the very best investing software there is?

I know there are a bunch of programs that help us make better investing decisions, and I’m looking for the best one. Since I don’t know any of them, I’ve decided to come here and ask.

What is the best software in your opinion and why?

Justin answers:

Assuming you are an active trader with good fundamental skills, you would find VectorVest to be an outstanding choice. I could give you lots of reasons, but try this one- You can start with a 5 week trial for $10. If you like it, it’s $650 per year. I spent two weeks learning it prior to investing with it, but made enough in the next three weeks with it to pay for four years of the service. It continues to produce winners I would never have identified otherwise. Absolutely great support (live, smart, friendly) and excellent built-in tutoring.

David asks…

How do i start in investing share markets?

I want to know about stocks, shares and how i need to start investing in stock/share market?

Justin answers:

The very old saying Do not keep all your egg in one basket applies. While investing keep following in mind. (1) Safety (2) Liquidity In my opinion invest 20% in stock (speculation) 40% in medium term consistent interest earning deposits (from well known companies) , 20% in long term investment and 20% in liquid asset (savings deposit, cash) to meet unforeseen exigencies.

William asks…

What is the difference between investing and trading/speculating?

I’m interested in stocks and want to just dip my toe into the water to see how it is. I’m not looking to make millions or thousands of dollars. $100 a month is more than enough. I was doing a research in stock market and there is an overwhelming amount of info out there. So I have a basic question?

What is the difference between investing and trading/speculating?
How do they each make profit and how long does it take to make a profit?

Justin answers:

Investing is based on you committing your capital for realization of gains.. An example of an investor is Warren Buffett who invests his money in companies for a long time in order for his original capital to grow.. Think of it as a business.. If you bought into a coffee house and the sales were going down.. If you were an investor you would stick with it and wait it out.. If you are a speculator you would sell because the sales are going down. A speculator sells quickly and looks at charts for ins-and-outs.

Warren Buffett the worlds greatest investor has returned around 20% in his lifetime.. He has the most successful track record for returns. So in the end what i’m trying to say is you shouldn’t expect to double your money every year for the next 30 years..
Good luck..

Robert asks…

How can I start in investing in pre-developed or developing real estate?

I’m interested in learning more about investing in developing real estate. Can somebody tell me how to approach this? Is there a list of developers that I can look up that may have a list of their projects?

Justin answers:

That takes tons of money and lots of risk – you’re better off starting with investing in rental properties that can give you positive ash flow from day one

Donald asks…

Does anyone know what big companies started off using angel investing for their start-up?

I am doing an M.B.A. presentation on Angel investing and am trying to use a big corporation as an example of successful angel investing. Are there any big companies that started off using angel investing to fund their idea and now are very successful? Please let me know of any. Thanks.

Justin answers:

Creative Technology Ltd

John asks…

What can you learn from investing in stock market?

It’s for a project I have to do. What exactly can you learn from investing in the stock market?

I wrote how unpredictable it is and how hard it is to choose what stock to buy. You can never know for sure how the stock will do over an extended period of time.

Justin answers:

There is a difference between what one can learn and what one does learn.

For me, I learned the hard way to cut ones losses rapidly, take a little of your profits off the table after a significant rise in stock prices, avoid high PE stocks like the plegue, avoid speculative stocks for the most part, avoid tech stocks also for the most part, put a fair portion of you money into index funds and mutual funds so you don’t have to spend too much time baby sitting it, try not to have more than 30 stocks in your portfolio because it takes too much effort to keep track of them, keep weeding out the underpeformers and replacing them with stocks with greater potential. Alway have a healthy cash reserve and add to it as stock prices rise, so that when they drop you can take advantage of the situation.

Steven asks…

How do I gain profit by investing in a mutual fund and is it worth it?

I am new to investing and I know that investing in mutual funds is a long term investment. Currently, I am using Scottrade as my brokerage. I was looking to invest in mutual funds but I am confused as to how they work. Many of the top rated mutual funds show an annual growth of around 20%, however, that number is not reflected in their stock value.

Say, I invested $2500 in a certain mutual fund for a year. The mutual fund has a 20% trailing rate that year. Does that mean that I gained $500 and where do I see those earnings.

THANKS.

Justin answers:

First of all most mutual funds do not make 20% year
after year. Second, you do not need a broker to invest
in mutual funds. Third, most all mutual funds offer what’s
called diversification. They can invest in hundreds of
stocks and bonds. $2500 is the entree cost to buy a fund.
Call one of these fund companies and a representative
will help you get started. TR Price 1 800 638 5660,
Fidelity 1 800 544 8544, American Century 1 800 345 2021.
Make sure you use the Roth IRA along with any investments.

Richard asks…

Why is it important to pay yourself fist by investing a small percentage of your income before spending it?

Why is it important to pay yourself fist by investing a small percentage of your income before spending it?
Where should you go to get investment advice? When should you start investing?

Justin answers:

This is a good idea because it avoids the tendency that many people have of “just running out of money.” If you pay yourself first, you will always have some savings and you will always have some money to invest.

This is a great idea. My wife likes to take our “excess money” and buy shoes and bags. You can imagine that if we have no money left over, she will just ask me to work more. The bags will just get more and more expensive, and the shoes will be better and better brands, and someday, we will wind up poor, with no savings.

So what you can do is either fight with your wife, or you can take money out of your paycheck FIRST, before she even sees it. That way she will buy fewer shoes, and you can have more savings and invest that. Personally, I wind up fighting with my wife because she knows how much I earn, but you can be smarter than I am.

Pay yourself first. It is the first step to investing.

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