Your Questions About What To Look Out For When Investing In A Company

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Thomas asks…

What company can I use as my stockholder?

Which ones do I need to look out for? And which ones are decent? I work at Mcdonald’s and Old navy I don’t make much but I think investing $100.00 a month in stock would be affordable until I get something more. I would like to help Wall street get back on their feet they helped me when I was on welfare. It is time for me as a hispanic woman to give back to my community.

financi4 answers:

I hope you are putting us on about helping Wall Street get back on its feet. On Wall Street they spend more on a bottle of wine than we make in a week.

If you are serious about investing $100 a month, I recommend investing in a mutual fund. T Rowe Price has a plan where they will automatically deduct $100 each month from your bank account and invest it in one of their mutual funds. You get to pick which one. That is a great plan for a small beginning investor. Not all of their mutual funds are great funds but some of them are pretty good. I own two of them.

Here is a link to their site. Look at the funds, read about them, look at their past performance and what they invest in. When you make a decision, give them a call.

Http://individual.troweprice.com/public/Retail/Mutual-Funds

Mark asks…

What happens to my debt when a company declares bankruptcy?

I recently inherited a great deal of money from the passing of my aunt, I don’t wanna say a specific number but lets just say I am a little over $10,000 in debt and I will have it paid all off by the end of the week plus still have money to live for the next I’d say 15 years or more if I invest right. my question is how do I pay off the debt to a company that is no longer in business?? I paid a accountant to pull my credit report and find everything, even the smallest thing that could effect my score. There are a few companies on there that don’t even exist as a business anymore, like I had an amp’d mobile cell phone years ago and everyone knows amp’d they filed for bankruptcy in 07 I think and nobody wanted to purchase their debt being as almost 80,000 of their subscribers weren’t paying their bill, how do I pay that if they don’t even have a way to reach them anymore and other companies like I took out a loan from a financial loan company that was up and coming in 2002 and now they aren’t even around, how do I get those things off of my credit report if I cant pay them?? Please help, I plan on opening a nightclub with in the next year and I only wanna use half of the money I inherited and get a bank loan for the rest but even with my new found fortune a bank will pull my credit score or something and still look at me funny or not do business at all with me. Thanks in advance.

financi4 answers:

Statute of limitations! Each state has a different limit on old debts, but they become uncollectible after a certain period of time, not more than 7 years. Google statute of limitations + state name. Do NOT pay any time-barred debts! If a sleazy collections outfit calls you on a time-barred debt, do not admit the bill ever belonged to you, and do not agree to pay. Simply say, “IF such a debt ever existed or was ever valid, it is time-barred in this state. Do not call me ever again or I will report you to the state Attorney General, Consumer Protection Division.” Hang up.

Companies that have gone out of business were adjudicated bankrupt, closed, and there is no further money due them nor bills to be paid by them. Dead issue. Any “collector” should be told “IF such a debt ever existed or was ever valid, the bankruptcy court has closed the case. Do not call me….”

Paying off all of your legitimate debts will in time improve your credit, but it does take time. Invest wisely and well! Be careful with your money, always pay your bills on time & in full, and your past will vanish off your credit reports in time. You need to make that money last the rest of your life, not a measly little 15 years. Invest and live off PART of the income. The principal MUST keep growing or it will die!

Charles asks…

SPELL AND GRAMMAR CHECK THIS WIN TEN POINTs?

Good things happened to those that wait Nonsense good things go to those that chase. Nothing is going to come to you and waiting for money and depending on someone else to give you money is the guaranteed path to failure. I am going to teach you about something I’ve mastered the art of making money I will teach you how to make money fast and make it last! Now before you read foreword I need you to say “Everything I understand money is wrong” Believe me when I tell you I know more “tricks” to making money I am not talking about the cereal. I strongly believe if you can count your money by hand it’s not enough. You cannot make money being a good guy and following rules you must bend the rules and twist the rules. Bill gates the wealthiest man in the world(and soon to be second) robbed various ideas from the rival company of Microsoft Apple other affects to not only have what apple has but to have more. Bill gate is a marketing genius his products have all the affects of apple and more and are the same price. Which one would you buy its obvious? How could a guy who did not finish collage become the richest person in the world (and soon to be second). How could Shawn Carter (formerly known as jay z) become extremely wealth once again a person who did not go to college and grew up poor he created something out of nothing. So how could people who did not graduate from college and even some junior high school dropouts become so wealthy? Formal education will make you a living; self-education will make you a fortune. Also they have mastered and carried out these proven techniques and now I will share them with you. I will teach you how to successfully run a business. Here at the six tips Create Something out of nothing, create a realistic business plan stick to it, Work Like A Slave Eat Like A King , Never stop looking for the best deals on products and buy low and sell high.

Something out of nothing

Fob a clothing company started in a basement but now is a multimillion dollar company. The people who created the clothing line did not have a lot of money but they took what they had and made something from nothing. The company was created by five neighbor friends living in queens New York the largest projects in the world. The company then became popular amongst queen New York and it became bigger. The five neighborhood friends who never thought they would grow this big did. How did they do this? They took what they had their expertise and made something out of it. If you are a great drawers draw and auction your pictures if you are a good writers sell your writings even if you have a basketball goal in your backyard charged to get on the court you will gain enough money eventually to extend your idea. If you know how to can teach offer to help a student in return of money. Once you gain enough you can even start your own tutoring company. Got a big screen get some movies charge people to come in your house to watch them. Go to an used bike store bikes cost about five dollars fix them up make them look better and they will sell for any more. Once you make a profit, invests half of it back in your business. Is it snowing? Shove snow? Good with computers teach the elderly mow lawns, wash cars, baby sit, and as soon as you make enough money washing cars you can buy more supplies hire your staff and send them to different areas to wash. Let them keep 25 percent of the money they made and you take the rest, you can do the same for shoving snow mowing lawns etc. Once you gain enough money you can expand your small company always looking for ways to make money you must be an opportunist, you must be a convincing, if you want to be wealthy.

•Create A Idea
•Expand on it
• Hire employees(optional)
•Launch it
•Advertise (business cards)
•Go find costumers
•Sell your products
• Be polite To Consumers give them two business cards one for a friend and for themselves
• Business Plan

Create a business plan stick to it if you are not making profits from it creates another one. As cannabis once said “A wise man sees failure as progress, a fool divorces his knowledge and misses the logic”. This philosophy is very important. First you must determine your objective. What are you trying to accomplish in your business what do you want to achieve? These are the questions you must ask. How will you achieve your objective? When will you achieve this? How will you make your company better than other similar company’s .Create a list of these things and then put it in an essay form get it copywriter and you have your business plan.

What is your objective
•How will you achieve this
When will you achieve this
•Create A List
•Put it in an essay form
•Get it copy writer

Work like a slave, eats like a king

Nothing will come to you, you must go out and get it this is serious good things go to those that wait is a lazy philosophy and it truly disgust me. Nobody can be successful unless he loves his work and put in work second place is the first losers place. to work like a slave you must work hard daily learn how to balance family school and other things with work. Read your competitors like a book constantly think of new ideas to receive more costumers everywhere you go bring out business cards .Go to the bookstore and place business cards in books that relate to your business. Put a banner on your car put it work and you will eat like a king.

•Put in work
•Eat like a king

Follow these proven methods and you will see results

Disclaimer: Note working constantly may lead to depression and tiredness

financi4 answers:

Ok forget it, I got bored.

Congrats on the 10pts to who ever has the patience to do this.

Steven asks…

Getting the stock market figured out for me..?

I am starting to get very interested in the stock market but need help interpreting certain things. For example I have certain things that I want to look for in a company but I don’t know how to find it on the charts. For example three things I really want to know before investing in a bank is how much capital they have, how many nonperforming loans they have and the net interest margin. What do these look like when you pull up the balance sheets on yahoo finance? What is P/E and how can I decide if it is good, bad or average?

financi4 answers:

I have some bad news for you.

Some of the information you want either isn’t public or free. The detailed info like nonperforming loans and some internal metrics are going to be insider info or only known through expensive analyst reports.

The market is very efficient and all public information you could easily obtain is already factored into the price. Think about it, you have thousands of funds all going through the same info you can find with highly trained analysts; there probably isn’t anything you could figure out that someone else hasn’t already. That is why ametuer day-trading is a losers game, like going to Vegas. Your best bet is to get into a diversified portfolio and long it.

A P/E, Price to Earnings, ratio is what you get when you divide the current stock price by the EPS, earnings per share. This is one of the most common metrics used in financial analysis. It is used along with other relative measures like Price/Book, Price/Cash Flow, Price/EBIT, Price/Sales, etc.
In order to figure out if a company has a good P/E is easy but time consuming. You must find or develop a benchmark based on Sector, Industry, etc. Find the P/E of the benchmark and compare it to the company. If the company’s P/E is greater than it usually means that it is “overvalued” and will mean revert to the benchmark or vice versa if it is less than the benchmark.

Robert asks…

How do you choose which company to invest in?

Hey,

I can’t figure out how exactly i’m meant to choose a company which I want to buy shares in. How do you actually choose which companies you want to invest in?

I know about the research part afterwards and during the process of choosing but I just cant decide which ones are best.

I looked at the EPS (Net profits/Average shares outstanding) but what exactly does it represent and a bigger EPS is better right?

What is the P/E and what does that represent?

Finally looking at the EPS and doing research only works for long term investments right? When people do day trading, with the exempt of breaking news, what do they do to choose where to invest?

Thanks for reading, Im looking forward to your answers.

financi4 answers:

Wow, tough questions. There isn’t one right way to pick companies to invest in. There are many different theories and strategies and all of them have different successes. Some strategies are more difficult to follow than others and some may also be customized or personalized to your own personal investing goals and risk tolerance.

I would suggest that you first determine your investing goals and risk tolerance. High risk companies can deliver the highest returns, but you have to be able to divserify to reduce your risk and you have to have a tough stomach to handle all of the severe ups and downs.

The PE ratio that you mention is just one of many fundamental indicators that people look at and it is one of the most common. But, you can’t ever look at that alone. Also, this indicator needs to be judged in relation to other companies in the same industry or business sector.

One helpful sight that provides some very good guidance and is an easy tool for evaluating stocks is Quicken.com. You don’t have to have Quicken to use it, but it is helpful and easier if you do have it. Quicken.com has a Stock Evaluator that has a Summary tab that provides an analysis and comparison all of the important indicators to other companies in it’s industry. You can quickly tell if a company is leading in all financial indicators in it’s industry. This is a long subject, but go to Quicken.com and then look for the stock evaluator. The website is http://www.quicken.com/investments/seceval/.

Day traders looks at technical indicators and charts. They trade on momentum to capture the ups and downs of the day. They track a limited number of companies and learn how the prices fluctuate during the day. They look for patterns and trade the patterns acording to the charts.

There are many books written to answer your questions. This is just a drop in the bucket. Hope it helps a little.

Good luck.

David asks…

Can some look over my compare & contrast essay?

Can you please look it over and tell me if there is anything I need to correct or change? I am writing a persuasive essay on Social Security and why people should invest there money in other places. In this assignment we are

Write three paragraphs, which combined will be at least 500 words, explaining why you will or will not use definitions and compare and contrast paragraphs in your final paper.

I intend to use definitions in my final paper. I think that doing so will benefit my essay and its readers, allowing my readers to fully understand the papers true meaning with definitions. It helps the readers to understand what the essay is trying to say and what the main points are trying to convey.
I have chosen to write an essay explaining why Americans should not to rely solely on social security as they retirement benefits. If my essay turns out to be successful, it will convince the readers to start investing in their own personal savings. To do this I will need to state why social security and its funds are slowly dwindling away in my essay. A definition essay will also supply much needed detail on examples that readers may not understand right away about the topic. Detail in an essay should be very important to any writer. Writers make sure that every essay they write includes plenty of detail instead of gloss. Sharp details pull the reader in and encourage them to read more; fine details also help build a stronger case for the point of view so including them in my essay will make my readers share my feelings toward social security. I hope to include resources from the Internet to back up my points further and fully explore options on finding other ways to start saving personal funds for retirement.
Dealing with compare and contrast, I was not aware that I used them as often as I do. While reviewing my paper I did not think, I had compared and contrasted however; I soon found that I had at numerous times. When I was explaining why Social Security may not be around by the time many people retire, I made sure to include steps one can take to be proactive when finding alternative funding for retirement; in this instance, IRA, 401K, stock options, and employee pension plans. However, the disadvantages far outweigh these benefits. The whole point of comparing and contrasting is looking at both the good and bad and seeing which carries more weight.
In the rough draft essay, it states why it may seem like a smart decision for people to put their future retirement funds into an investment besides social security. By maintaining the idea that your there money will recover, economic scandals in recent years have shaken the very idea of a safe investment. In my rough draft, it points out that a large number of people in recent years have diversified their investments, to avoid a substantial loss in the event of a company who invests into experiences a loss, such as bankruptcy. By indicating what they could do and highlighting the consequences, the draft draws out the short- term good and the long- term contrasting them. I think simply writing out comparisons can help the person create the bulk of his/her essay very quickly. Pre writing helped me to create my essay; by pre-writing I mean taking a piece of paper and writing down the advantages and disadvantages of depending on social security and alternate retirement plans. This will also help them to decide for yourself whether you can meet your needs rely remotely on social security when you retire or if you want to be proactive in finding funding options. In my case I am neither too young nor too old to consider looking into options for my retirement. One should much rather start investing money better to protect themselves in the future.

financi4 answers:

Well, 1st off, understand Social Security was never intended as a full retirement program. The purpose was to supplement your income at retirement. So the nature of the program has always been to save and/or invest in other private ventures, and use SS benefits as a supplement, to maintain an income to accommodate your lifestyle. Trying to live solely on SS, in most cases, leaves you at or below the poverty level.

The problem is, most people do not have the time, or understanding to manage their investments, or learn how. They put money in a 401K/IRA, and let people they have never met, manage how to allocate the investments. Money managers have standard allocations, based on age, which is not the most efficient way or applicable to everyone in certain age groups.

Unfortunately, few people understand how the federal government operates, how it borrows money, what role the SS trust fund plays http://www.publicdebt.treas.gov/

Most people will tell you there is no SS trust fund, or the government stole from it. In truth, SS is funded by FICA taxes collected in payroll taxes. The revenue is used to pay current SS benefits. There has always been a surplus. The SS surplus, along with Medicare tax surplus, and road tax surplus, are placed is special GAS (Government Account Series) Treasure securities.

The federal government borrows from that trust fund (called intragovernmental holdings) pays interest on it, and has always repaid the money. The SS/Medicare/road tax surpluses (intragovernmental holdings) make up about 1/3 of the national debt
http://www.treasurydirect.gov/NP/BPDLogin?application=np
http://www.treasurydirect.gov/govt/charts/principal/principal_govpub.htm
http://www.davemanuel.com/investor-dictionary/intragovernmental-holdings/

Another important key is few people understand how the Fed (Federal Reserve) operates, and how it’s monetary policies work. Watching what the Fed is doing, is essential to investment planning. The Fed doesn’t just set interest, nor does it simply print more money. It engages in expanding the money supply, with “quantitative easing”

That involves buying and selling Treasury securities both directly from the Treasury Dept, and/or on the open market. It is extremely important to watch, because if their timing on removing the liquidity after an economic recovery is off, or the amount removed is too much or too little, you can set off a new round of inflation, or deflation.
Http://www.investopedia.com/terms/q/quantitative-easing.asp
http://www.businessinsider.com/what-is-quantitative-easing-2010-8

It shocks most people who believe China owns most of the U.S. Debt to learn, the conservative investing in their retirement plan, you referred to a “safe investing” are actually in Treasury securities, and make up the largest portion of the national debt. That also works to actually strengthens the Dollar, as the value of the dollar is determined by how much debt (in Treasury securities) investors are willing to hold.

The bottom line is if people will educate themselves, learn how to watch the Fed’s monetary, Treasury’s fiscal policy, study trends and learn how to react BEFORE bubbles occur and burst, learn commodity investing, they could do very well with private retirement plans. Otherwise, just save, and invest in Treasury securities. The money will not grow, but is is totally safe.

James asks…

WoW CAN YOU SPELL CHECK MY EXPOSITORY ESSAY(WIN 10 POINTS?

Spell check it please IF YOU DO YOU WILL WIN TEN POINTS

Good things happened to those that wait Nonsense good things go to those that chase. Nothing is going to come to you and waiting for money and depending on someone else to give you money is the guaranteed path to failure. I am going to teach you about something I’ve mastered the art of making money I will teach you how to make money fast and make it last! Now before you read forward I need you to say “Everything I know about money is wrong” Believe me when I tell you I know more “tricks” to making money I am not talking about the cereal. I strongly believe if you can count your money by hand it’s not enough. You can’t make money being a good guy and following rules you must bend the rules and twist the rules. Bill gates the wealthiest man in the world(and soon to be second) stole various ideas from the rival company of Microsoft Apple other effects to not only have what apple has but to have more. Bill gate is a marketing genius his products has all the effects of apple and more and are the same price. Which one would you buy its obvious? How could a guy who didn’t finish collage become the richest person in the world (and soon to be second). How could Shawn Carter (formally known as jay z) become extremely wealth once again a person who did not go to collage and grew up poor he created something out of nothing. So how could people who did not graduate from collage and even some junior high school dropouts become so wealthy? Formal education will make you a living; self-education will make you a fortune. Also they have mastered and implemented these proven techniques and now I will share them with you. I will teach you how to successfully run a business. Here at the 6 tips Create Something out of nothing, create a realistic business plan stick to it, Work Like A Slave Eat Like A King , Never stop looking for the best deals on products and buy low and sell high.

Something out of nothing

Fubu a clothing company started in a basement but now is a multi million dollar company. The people who created the clothing line didn’t have a lot of money but they took what they had and made something from nothing. The company was created by 5 neighbor friends living in queens New York the largest projects in the world. The company then became popular amongst queen new York and it became bigger. The 5 neighborhood friends who never thought they would grow this big did. How did they do this ? They took what they had their expertise and made something out of it . If you are a great drawers draw and auction your pictures if you are a good writer sell your writings even if you have a basketball goal in your backyard charged to get on the court you will gain enough money eventually to extend your idea. If you know how to can teach offer to help a student in return of money. Once you gain enough you can even start your own tutoring company. Got a big screen get some movies charge people to come in your house to watch them. Go to a used bike store bikes cost about 5 dollars fix them up make them look better and they will sell for any more. Once you make a profit invest half of it back in your business. Is it snowing ? shove snow ? Good with computers teach the elderly mow lawns ,wash cars, baby sit, . And as soon as you make enough money washing cars you can buy more supplies hire your staff and send them to different areas to wash. Let them keep 25 percent of the money the made and you take the rest, you can do the same for shoving snow mowing lawns etc . Once you gain enough money you can expand your small company always looking for ways to make money you must be an opportunist, you must be a persuading , if you want to be wealthy.

•Create An Idea
•Expand on it
• Hire employees(optional)
•Launch it
•Advertise (business cards)
•Go find costumers
•Sell your products
• Be polite To Consumers give them two business cards one for a friends and for themselve
• Business Plan

Create a business plan stick to it if you are not making profits from it create another one. As canibus once said “A wise man sees failure as progress, A fool divorces his knowledge and misses the logic”. This philosophy is very important. First you must determine your objective. What are you trying to accomplish in your business what do you want to achieve? These are the questions you must ask. How will you achieve your objective? When will you achieve this . How will you make your company better then other similar company’s .Create a list of these things and then put it in an essay form get it copywrited and you have your business plan.

What is your objective
•How will you achieve this
When will you achieve this
•Create A List
•Put it in a essay form
•Get it copy writer

Work like a slave eat like a king

Nothing will come to you , you must go out and get it this is serious good things go to those that wait is a lazy philosophy and it truly disgust me . Nobody can be successful unless he loves his work and put in work second place is the first losers place. In order to work like a slave you must work hard daily learn how to balance family school and other things with work. Read your competitors like a book constantly think of new ideas to receive more costumers everywhere you go bring out business cards .Go to the bookstore and place business cards in books that relate to your business. Put a banner on your car put it work and you will eat like a king.

•Put in work
•Eat like a king

Follow these proven methods and you will see results

Disclaimer : Note working constantly may lead to depression and ttiridness

financi4 answers:

Good things happened to those that wait. Nonsense good things go to those that work. Nothing is going to come to you if you wait for money and depend on someone else to give you money is the guaranteed path to failure. I am going to teach you about something I’ve mastered ,the art of making money. I will teach you how to make money fast and make it last! Now before you read forward I need you to say “Everything I know about money is wrong” Believe me when I tell you I know more “tricks” to making money I am not talking about the cereal. I strongly believe if you can count your money by hand it’s not enough. You can’t make money being a good guy and following rules you must bend the rules and twist the rules. Bill gates the wealthiest man in the world(and soon to be second) stole various ideas from the rival company of Microsoft Apple to not only have what apple has but to have more. Bill gate is a marketing genius his products have all the features of apple and more and are the same price. Which one would you buy? Its obvious, how could a guy who didn’t finish college become the richest person in the world. How could Shawn Carter (formally known as jay z) become extremely wealthy? Once again a person who did not go to college and grew up poor created something out of nothing. So how could people who did not graduate from college and even some junior high school dropouts become so wealthy? Formal education will make you a living; self-education will make you a fortune. Also they have mastered and implemented these proven techniques and now I will share them with you. I will teach you how to successfully run a business. Here at the 6 tips to “Create Something out of nothing.” Create a realistic business plan stick to it. Work Like A Slave Eat Like A King , Never stop looking for the best deals on products to buy low and sell high.

Something out of nothing

Fubu a clothing company started in a basement but now is a multi million dollar company. The people who created the clothing line didn’t have a lot of money but they took what they had and made something from nothing. The company was created by 5 neighborhood friends living in queens New York the largest projects in the world. The company then became popular amongest queen new York and it became bigger. The 5 neighborhood friends who never thought they would grow this big, did. How did they do this ? They took what they had ,their expertise, and made something out of it . If you are a great drawer, draw and auction your pictures.If you are a good writer sell your writings. Even if you have a basketball goal in your backyard charged to get on the court you will gain enough money, eventually, to extend your idea. If you know how to teach offer to help a student in return of money. Once you gain enough you can even start your own tutoring company.Have a big screen get some movies charge people to come in your house to watch them. Go to a used bike store bikes cost about 5 dollars fix them up make them look better and they will sell for any more. Once you make a profit invest half of it back in your business. Is it snowing, shove snow. Good with computers teach the elderly how to operate them. Mow lawns ,wash cars, baby sit, . And as soon as you make enough money washing cars you can buy more supplies hire a staff and send them to different areas to wash cars . Let them keep 25 percent of the money the made and you take the rest, you can do the same for shovling snow mowing lawns etc . Once you gain enough money you can expand your small company, always looking for ways to make money.You must be an opportunist and you must be persuading if you want to be wealthy.

•Create An Idea
•Expand on it
• Hire employees(optional)
•Launch it
•Advertise (business cards)
•Go find costumers
•Sell your products
• Be polite To Consumers give them two business cards one for a friends and for themself
• Business Plan

Create a business plan stick to it if you are not making profits from it create another one. As Canibus once said “A wise man sees failure as progress, A fool divorces his knowledge and misses the logic”. This philosophy is very important. First you must determine your objective. What are you trying to accomplish in your business what do you want to achieve? These are the questions you must ask. How will you achieve your objective? When will you achieve this? How will you make your company better then other similar company’s? Create a list of these things and then put it in an essay form get it copywrited and you have your business plan.

•What is your objective
•How will you achieve this
•When will you achieve this
•Create A List
•Put it in a essay form
•Get it copy writer

“Work like a slave eat like a king.”

Nothing will come to you , you must go out and get it. This is serious, “good things go to those that wait” is a lazy philosophy and it truly disgust me . Nobody can be successful unless he/she loves their work.And does work better than second rate. In order to work like a slave you must work hard. Learn daily how to balance family school and other things with work. Read your competitors like a book constantly think of new ideas to receive more consumers everywhere you go bring business cards .Go to the bookstore and place business cards in books that relate to your business. Put a banner on your car, put this to work and you will eat like a king.

•Put in work
•Eat like a king

Follow these proven methods and you will see results

Disclaimer : Note working constantly may lead to depression and tiredness

George asks…

Is time to take a ‘Good close look at Capitalism’ as it is practiced in most parts of the world?

The definition of Capitalism:
‘An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.’
A critical part of the definition of capitalism is the idea of laissez-faire, a French term which roughly translates into “allow to do” or “leave alone.”
This is what many so called ‘Conservatives’ around the world believe especially here in America. The less regulated.. businesses are, the more than can operate and stimulate business. At least this is the argument. But does it really make sense? If all us really take a step back into history and understand that through Capitalism, the common man invested in companies so that said companies could produce goods and or services that said investor needed in his or her community or state. As time progressed investments were soon made in many companies with the sole purpose of making money on the return from their investment. Now with ‘speculators’ and millions literally ‘playing’ the stock market, the whole concept of what Capitalism was meant to do has changed dramatically.
Economist Thomas Sowell described it this way:
When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring the people to do the work. Without that, nothing happens. Even when one person decides to operate a store or hamburger stand without employees, that person must first pay somebody to deliver the goods that are going to be sold. Money goes out first to pay expenses and then comes back as profits later—if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.”
But who is investing in the small businesses of today?…no one! People don’t invest in small businesses today for the sole purpose of said business to succeed. For the most part, people invest today to get rich.
Moreover, individuals and corporations have violated the principles of fair trade, by concealing and falsifying information, and while their own personal freedom and wealth may be enhanced, both society and the free market they have conned are suffering.
So I ask in all seriousness, do we all need to take a good close look at how we operate as Society, and if more and stiffer government regulations are not the answers….then what are?
I would really like to some unbiased thought on this issue.
The definition is very ‘accurate’. I am sure you can simply Google this to find out. As i said, I would like serious thought into solutions and your thoughts.

financi4 answers:

Yes, I agree that there is a big problem with the way the economy works now. And something needs to be changed. It doesn’t make sense to continue as before, when things are clearly falling apart.

But changing things just for the sake of change also doesn’t make sense. The only kind of change that makes sense is where the root causes of the current problems are clearly identified and fixed.

I think the root cause of the present crisis is too much diversification of investments. Vast majority of investors spread their investments over tens and in many cases hundreds of different companies. And for this reason they usually cannot watch closely the companies they own and change the management of these companies, when the management starts making bad decisions.

A lot of managers and executives of failed companies came millionaires and billionaires out of this crisis. While the shareholders and the taxpayers are left holding the empty bag.

And this kind of thing has to change. The owners of companies need to take more responsibility for the companies they own. And one way to encourage that would be to give tax breaks to investors who put most of their money into one or two companies instead of diversifying their investments. And tax a lot all those investors who diversify their investments a lot.

Chris asks…

Could I become a billionaire by investing into growing small cap penny share companies?

I am 17, nearly 18 years of age. I am looking to trade penny stocks as soon as I turn aged 18. I know quite a lot about investing using various vehicles that can be used to invest, i.e. CFDs, options, forex and penny shares.

Now, I personally would choose penny shares to begin with because you can get very good returns on them with your money. I know for a fact that if you had invested £100 into Microsoft when it first began you’d be sitting on a £1 million fortune, or if you invested £10,000 into Wal-Mart when it began, you’d have £130 million!

What I’d like to know is if you had say £100,000 and you invested into a company like Microsoft when it first began because you saw it was the future of an entire industry, could you end up with £1 billion, or even £10 billion if you took a risk and had £1 million to invest. Would this work and has anybody in the history of investing ever done something like this and made that much money out of a reletively small investment?

financi4 answers:

Most or possibly all CFD providers don’t offer penny stocks.

You don’t need to buy penny stocks if you want to trade CFD’s, options or trade with a margin account because the leverage decreases the amount you put down and increases your potential return.

I’ll give you an example. Let’s say you want to buy 1000 Cadbury shares at 5.50 pounds. That would be 5500 pounds total value. If a CFD provider offers 5% margin, then the margin required for that position would only be 275 pounds. So if it goes up by 27.5p you’ve doubled your money

It’s best to start out investing in companies such as those in the FTSE 100 index with your own money for a while. Leverage can increase you potential profit, but it can also increase your potential loss.

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