Your Questions About Investing For Beginners

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David asks…

What’s the best stock investing/trading strategy for beginners with some experience for the first 5 years?

I am currently 19, and I have had about a year of experience in stock investing/trading as well as reading some good books and internet articles.

What I want to know is, what investing/trading strategy should I be looking at for at least the first 5 years of my stock investing/trading career, or until I turn 24?

financi4 answers:

Investing for growth http://www.shareworld.co.uk/index.php/articles/notices/investing-for-growth/
This describes two different ideas for investment, and it is very brief outline, but it may give you an idea where to start.

Steven asks…

Beginners book for investing in the stock market?

I am a recent high school graduate and would like to experiment with stocks and investments. Assume I know minimal on the subject and looking for a book that can provide knowledge on stock rhetoric such as ‘mutual funds’, etc.

Thanks

financi4 answers:

Start with some basic books to teach you the fundamentals. Two excellent reads are The Complete Idiot’s Guide to Investing, and Investing for Dummies. You can probably find them in your local library. Before doing anything, make sure you have enough in savings in case things go south for at least 6 months if you’re on your own. Also make sure you have
bad debt like credit cards paid off first.
You need to learn also some important concepts in investing, such as dollar-cost averaging and compound interest – two of your best friends to make money for the future.
Also you need to think of what you are investing for exactly.

James asks…

Best book guide to investing on the stock market?

I have decided that I want to start investing in stocks.

But I need to research first before I do anything so I don’t screw up.

Do you guys recommend any book that has very thorough information that is easy to understand on the stock market, how it works, how to invest, example strategies, etc?

I need a really really good book or website (free website) that has very very good information on the stock market and how to invest for beginners to experienced.

Thanks

financi4 answers:

Investopedia is the best reference for finance terms and definitions

http://www.howthemarketworks.com./
http://stockmarket.makemoneyideas.in/
http://simulator.investopedia.com/home.aspx (simulator, and finance terms and definitions)
http://www.top10traders.com
http://investing.sitesled.com/
www.stockcharts.com
www.freestockcharts.com
http://futures.tradingcharts.com/learning/
http://www.fool.com/school/basics/basics…
Http://beginnersinvest.about.com/library…

Blogs
http://winners-and-losers.com/
http://strategiesforlife.blogspot.com/

“Which Is Better, Buy-and-Hold or Market Timing?”

“Do You Have What It Takes to Be a Market Timer

Droke, Clif – Technical Analysis Simplified

Kahn, Michael N. – Tech. Anal. Plain & Simple

Lefevre, Edwin – Reminiscences of a Stock Operator

Lowenstein, Roger – Buffet (Warren)-The Making of a Capitalist

O’Neil, William J.- How to Make Money in Stocks

Joseph asks…

Investing for Beginners?

I am thinking about investing in the near future and would like to get some advice from experienced investors.

Is now a great time to enter the market?
I have been told that a great option for me is a ROTH IRA. I am currently a student in college and looking to invest to save for the future.
I have done some research on what is a good company to use to invest. My economics professor has told me about Vanguard because that is what he uses and he says that it works well and it is considerably inexpensive.

What are some of your thoughts?
Thanks!

financi4 answers:

Read all you can get your hands on.

Watch the market. Find out how it trades so you can get a feel for how it works.

I trade on the NEWS. Ask your economics professor about macro-economics.

The market is on a decline at the moment, so stocks are cheap and getting cheaper. However, I’d suggest getting your feet wet in mutual funds before you start picking individual stocks. It’s less risky. Then watch companies that you are interested in and watch their sectors and see how they are doing. There are a LOT of websites and resources that are helpful. If you are keen (and it sounds like you are), you can manage your own money eventually.

Again, learn macro-economics. Read this book: When it’s Raining in Brazil, Buy Starbucks by Navarro. Read any of Jim Cramer’s books. And watch him nightly on CNBC at 6pm and 11pm. He does a show that is fun and informative and very helpful to a new investor such as yourself.

Good Luck.

Lastly, you have time on your side. Use an IRA for retirement and you should be in good shape.

P.S. I got your message.

Check Morningstar.com They are an excellent resource, they rank mutual funds by investment style and sector. Good for doing research on which funds to buy.

William asks…

Investing for beginners?

I am looking for information on investing in both the stock market and other thingies (can you tell I’m a beginner?), such as mutual funds, hedge funds, really everything as I just don’t know anything about any of it lol.
I am young and currently don’t have much money to invest but am looking for information on it, and any information I can get is more than wonderfully helpful. Thank you in advance!

financi4 answers:

I think as an new investor it is important for you to learn both technical and fundamental analysis. Be aware that as a beginner you have a choice between being either an investor or a trader. I will make an attempt to explain this:

Historically, investors have typically focused on what are called the fundamentals of a business or fundamental analysis. Fundamental analysis essentially revolves around analyzing the financial statements of the company and thoroughly analyzing the business practices of a particular company. “Investing for dummies” covers this aspect of analysis very well but almost entirely ignores technical analysis.

An investor sometimes is more likely to hold on to a stock longer than he/she should even when the price is going down sharply against them. Many traditional investors will ignore technical analysis(explained below), which in my opinion is not a good strategy to follow.

Technical analysis is what traders use to make their decisions on the stocks to buy or sell. Typically, traders are looking to hold a stock (or any other financial instrument) for a shorter period of time. They rely almost entirely on the use of of the analysis of stock charts (technical analysis) to make their decisions on when to get into a trade, or when to get out.

A trader is going to have to pay more in commission charges as they are trading more often than an investor. A trader must also have a good system for managing their money in order to make money. A trader probably needs more skill in order to be profitable (not to downplay the knowledge and skills required to be a good investor).

“Stock investing for dummies” is a good book for introducing you to fundamental analysis.

“Come into my trading room” is probably the best introductory book into technical analysis, and more specifically trading.

I think it is important when you are first getting into the game to learn about both:
trading vs investing *and*
technical analysis vs fundamental analysis

so that you understand ALL of the methods that people use to make decisions on whether to buy a stock or not. If you are willing to spend the time here understanding all of this you will gain a huge advantage in the markets you otherwise wouldn’t have. Once you understand the differences between these two groups of people you can start to formulate your own strategy on how you want to approach the markets.

If you are not willing to spend the time to obtain this knowledge then yes, mutual funds are a better bet, but if you really want to learn how to obtain the best yearly returns you possibly can obtain you should learn all of the material I have outlined above using the two books mentioned and make your own decisions intelligently on what you want to invest in / trade.

With all this being said, there is no reason why you can’t use both fundamental and technical analysis at the same time. You could for instance you fundamental analysis to find undervalued stocks and then look at the charts (technical analysis) to determine the best time to buy a stock.

Hopefully this wasn’t too much to digest at once: if it is be sure to read both books. I think if you do this it will all start to slot into place for you.

John asks…

What is the best book to read about investing in stocks for beginners like me?

i’m currently reading the one by William O’neill but i found myself lost once in a while… i just can’t understand a lot of terms! is there a dictionary for stocks or something? or is there a book that’s more intended for beginner investors who’re not very familiar with most stock market terms? Thanks!

financi4 answers:

“Investing For Dummies” is a good starter, to be followed by “Stock Investing For Dummies”, which goes a bit deeper into stocks.

Richard asks…

Books on investing for beginners?

Hey everyone 🙂

I would like to know if anyone knows of any good books that will help someone with the process of investing. Mind you, the book(s) is (are) for someone who knows absolutely nothing about investing and wants to learn from scratch. So no fancy lingo or jargon and all that. Something nice and simple. And yes…I’m checking Amazon too 🙂

financi4 answers:

Three books come to mind. Check out their reviews on Amazon to decide which one would suit you best. All are written in very easy terms to give you a foundation in investing. They are:

“The Only Investment Guide You’ll Ever Need” by Andrew Tobias

“A Random Walk Guide to Investing” by Burton Malkiel

“Investing for Dummies” by Eric Tyson

The first two are as much personal finance guides as investment guides and have definite recommendations. The third book focuses more content on investment only and is much more neutral in tone. After you read the Amazon reviews, flip through the books either online or in a bookstore. Feel free to drop me a line and ask me any questions you might have about the books before buying them.

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