Your Questions About Purpose Of Investing

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Michael asks…

how is the income from shares of a partnership firm taxed for investment purposes?

Will it be taxed like capital gains or as business income. The firm is established with the purpose of investing in shares only.

Justin answers:

The income from shares of a partnership firm established for the purpose of investing in shares only will be taxed as business income because it the income earned in the ordinary course of business.

Daniel asks…

What is the purpose of having a standard term CD account?

I want to invest some money (not much) but I just don’t see the overall purpose of investing when at the end of the term I have only gained pennies towards my initial deposit. Bank of America has a interest rate of 0.03% for amounts less than $10,000. So if I deposit $10,000 I will gain a total of $3.00 at the end of 12 months. If I deposit $1,000 I will gain $0.30 at the end of 12 months. SO what is the point?!

Justin answers:

You are right. The only reason a person would invest
money into any type bank account is for safety reasons.
It used to be much higher a few years ago. Best you
try investing in a low risk mutual fund from Fidelity,
Vanguard or American century.

Joseph asks…

How do I buy stocks in the stock market?

Hello, I know what is the main purpose of investing in the stock market and all that jazz. But my question means how do I do it with a broker. Do i have to open an account? Can I do it without a broker? How do brokers know how to place an order?

Thanks

Justin answers:

Yes you can. You can buy stocks through a mutual fund or directly from the company.

I’d recommend T. Rowe Price for their no load mutual funds. Or you can go directly to the website of the company, look under “investor relations” for stock information.

Steven asks…

Is it good time to buy real estate investment in las vegas now?

Is it good time to buy real estate in las vegas,NV now? The purpose is to invest, rent out for vacation.

If so, what is the good/safe area to buy a detached house ? I will search for the price of the area online later. Thanks a lot for the help.

Justin answers:

Yes this is a good time to invest in real estate in just about any part of the United States.

You have to do what is called in the real estate investment trade as foot work.

No one can determine what property your would consider a good safe area. What one person consider safe and a good area might not be so good to another.

So get in your car, check out a few areas that you would want to invest in. At the time you are checking out the area make sure you get the crime reports from the local police.

You might also get out of the car and talk to the people walking and talking on the street. I find that they normally know more than the police, because the police can only tell you what crimes are reported to them.

You might also purchase a couple of real estate investment books from your local book store. This will assist you with several things you need to know before investing in real estate. Ignorance cost a high price.

#1 You will also need an effective marketing plan

#2 You will need real estate professionals to assist you with your new investment field.

#3 You will need a source of funds to fund your real estate acquisitions. (Don’t depend on banks in a up or down turn in the real estate market, they are not your best friends.)

I hope this has been of some benefit to you, good luck.

“FIGHT ON”

David asks…

Are penny stocks worth investing in? Is there a good strategy to doing so? Do you have personal experience?

I’m a novice in regards to investing. So I assume “penny stocks” refer to very low cost stocks. However, I wonder, what is the strategy and purpose for investing in them? Besides hitting the stock-market jackpot by investing heavily in a penny stock that goes huge in terms of value, what are the more reasonable strategies to using them and putting your money into them?

Also, is there an institution / news investment orginazation that covers penny stocks well?

Justin answers:

I’ve really wondered this, too.

I think the attraction is just that a small change in the price is a big change, percent-wise. For instance, if a stock goes from $20 to $20.01 that’s only a what, 0.05 percent gain. But if a stock goes from $0.10 to $0.11, that’s a 10 percent gain. In theory, if you had invested $1000 in the first stock, now it’d be worth $1005. But if you had invested $1000 in the second stock, now it’d be worth $1100.

Of course, it could go down by that amount just as easily as it could go up.

As far as strategy…I’ve usually been too scared to try, but I suppose if you spread your money across a bunch of them, and watched them like a hawk, you could cash out on the peaks and buy in the valleys just like any other stock, but on perhaps a shorter timescale.

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