1. Your Questions About How To Invest In The Stock Market
With Little Money
Sandy asks…
How can a 15 year old with only £100 get started with investing in
the stock market, mutual funds etc.?
I only have £100 from pocket money. I have always been a business-orientated person and I'm
becoming more interested in stocks now. I want to get involved but the only thing is I don't
know how to get started. Plus I have little starting capital. With the little money and
knowledge I have, how can I learn more and get started with investing? Thanks for your time.
Steve Winston answers:
Investing Tutorials - Basics
http://www.investopedia.com/university/buildingblocks.asp#axzz1b0PGJiek
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2. Betty asks…
College-age students in the stock market?
I know this may sound like an uncommon question, but Im looking for input from someone more
knowledgeable than I. I am a college freshman, 19 years old, working towards a four-year
biology degree with plans for graduate education, most likely medical or pharmaceutical school.
I have a network of extended family that is comfortably retired from the financial industry after
doing considerably well in it. To make a long story somewhat short, they were advising me on
saving for my education over Thanksgiving dinner today. In addition to the savings I have
accumulated in various bank accounts, CD's and bonds, they have advised me to also invest a
minor amount of money in the stock market and establish a portfolio at a young age. I'm a
little apprehensive about this, especially given the volatility of the market today. I told them that
I didn't think investing in stock is appropriate at my age and that I should go for more
conservative options. However, their point was that is important to diversify my savings among
various sources, including stocks.
What do you think about college students getting involved in the market, and how should I go
about doing it (if at all?)
Steve Winston answers:
Your safest bet is a Total Stock Market Index Fund or ETF. These funds literally own every
stock in the market, so when times are good, they go up in value. When times are bad (like
now) they go down, but will regain their value when the economy eventually improves, as it
always does. There's no way their value can go all the way to zero, unless the stock market
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3. somehow ceases to exist, in which case you most likely have worse things to worry about than
your savings
Also, the dividends paid by the stocks in the fund are collected and divided equally among
members, so you will get dividend payments that you can spend or reinvest as you see fit.
It is safer than trying to pick stocks in individual companies, which can permanently lose value
or go out of business all together. It is also cheaper than regular mutual funds, which charge
higher fees.
Ask your family members with history in the finance industry about an index fund or etf that
tracks the entire US stock market and see if they think it is a good choice for you.
Sharon asks…
Why did Jesus teach that the kingdom of Heaven and the stock
market are alike?
The one with 5 got 5 more. The one with 2 got 2 more. The one who didn't invest at all was
punished. Jesus is telling us that we must aim to get 100% return for our money or else we'll be
punished with poverty. The only way to do that is with the stock market. Jesus says that
investing in the Stock Market is like the kingdom of Heaven? If so, we should all invest in the
stock market.
I say, "Let's put our money aside for a moment and just be decent to one another. But Jesus
says to always be investing and getting 100% return?
Parable of the Three Servants
14 “Again, the Kingdom of Heaven can be illustrated by the story of a man going on a long trip.
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4. He called together his servants and entrusted his money to them while he was gone. 15 He
gave five bags of silver to one, two bags of silver to another, and one bag of silver to the
last—dividing it in proportion to their abilities. He then left on his trip.
16 “The servant who received the five bags of silver began to invest the money and earned
five more. 17 The servant with two bags of silver also went to work and earned two more. 18
But the servant who received the one bag of silver dug a hole in the ground and hid the
master’s money.
19 “After a long time their master returned from his trip and called them to give an account of
how they had used his money. 20 The servant to whom he had entrusted the five bags of
silver came forward with five more and said, ‘Master, you gave me five bags of silver to invest,
and I have earned five more.’
21 “The master was full of praise. ‘Well done, my good and faithful servant. You have been
faithful in handling this small amount, so now I will give you many more responsibilities. Let’s
celebrate together!’
22 “The servant who had received the two bags of silver came forward and said, ‘Master, you
gave me two bags of silver to invest, and I have earned two more.’
23 “The master said, ‘Well done, my good and faithful servant. You have been faithful in
handling this small amount, so now I will give you many more responsibilities. Let’s celebrate
together!’
24 “Then the servant with the one bag of silver came and said, ‘Master, I knew you were a
harsh man, harvesting crops you didn’t plant and gathering crops you didn’t cultivate. 25 I was
afraid I would lose your money, so I hid it in the earth. Look, here is your money back.’
26 “But the master replied, ‘You wicked and lazy servant! If you knew I harvested crops I
didn’t plant and gathered crops I didn’t cultivate, 27 why didn’t you deposit my money in the
bank? At least I could have gotten some interest on it.’
28 “Then he ordered, ‘Take the money from this servant, and give it to the one with the ten
bags of silver. 29 To those who use well what they are given, even more will be given, and they
will have an abundance. But from those who do nothing, even what little they have will be taken
away. 30 Now throw this useless servant into outer darkness, where there will be weeping and
gnashing of teeth.’
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5. Steve Winston answers:
In Aramaic, the idiom used to describe sin had economic implications. There was no way to talk
about sin except through the metaphor of debt. The way in which we talk about something
obviously affects how we understand that thing, therefore, in Jesus' time, the idea of sin was
inseparable from the idea of an economy, or of debt. It makes sense, then, that many of his
teachings equate the two.
Thomas asks…
Investing in the Stock Market?
Hi. I'm 20 years old. I want to know all about how to invest in the stock market. What's the
best website to start an account with, is there one that doesn't have a ridiculous account fee?
HOW to I invest in stock? About how much profit do you make, a little or a whole lot? There's
so much information on it, I don't even know where to begin to look. I need to know basics,
about how much you invest, and how much you get back from investing. Do you get money
automatically? Details please. I really would like as much help as I can get. Thanks!
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6. Steve Winston answers:
Read Investing For Dummies - it's for beginners, and you can get so many questions answered
though
an easy to read and understand format.
Carol asks…
best way to buy stock with little money?
i got around 1000 dollar and want to invest to the market. im looking for the best way how! im
going to just spend the 1000 dollars and not put month playments in. fees and commsion and
min ARE all important!!!
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7. Steve Winston answers:
Whatever you want to buy, timing is very important.
You MUST get in the market at the right time and get out of it at the right time ( so you can buy
low and sell high)
To do so you could use the free services on http://www.mystocksignals.com/ that provide free
buy and sell stock signals. Subscribers also get full chart analysis on any stock market.
Maria asks…
How to Make a Little Money?
Hey guys, I would like to make a little money... Not crazy money, but just some so I could go
to the movies when I'm offered. There are some things that I would like to set as 'guide lines'.
1. It shouldn't be something like a lemonade stand... (LOL)
2. I'd rather if you didn't tell me to " Invest in the stock market"
3. It can't be a website. (This includes scams)
4. I encourage that it is something I could do math with... Such as calculations and percents...
When you are commenting please check and make sure that what you are offering is something
you would do if you were in my position.
Thank you in advance!
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8. Steve Winston answers:
Check out www.mauthor.wordpress.com, maybe you might get idea on how to make a little
money. Hope this will help you out
Ken asks…
starting in the stock market?
So i was interested in starting in the stock market. I am pretty young, 21, and dont really know
how to go about it. I've done a little work with stocks and stuff in my econ class in high school
but very minimal. i would only start with $100-$200 or something around there but i wanna get a
feel of it b4 i invest anything more than that. I know the risks of losing it all and i would not put
more money in then i can afford to lose and not affect any other aspect of my life other than a
little disappointment. Now the part that confuses me is how to go about investing. Im guessing
you cant just invest in a certain stock without going thru a company and probably paying them.
What would be the best option for me to pay the least amount to a company to get going. I
know i dont have much money so i'd rather spend it actually investing then paying fees to
invest. Any help would be appreciated thank you
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9. Steve Winston answers:
I don't think you are going to do anything. You are still in the "wonder if I could," or "wonder if I
should" phase, rather than actually taking the first step, or trying to actually learn something.
Instead, you're trying to get around the system on the cheap, asking the wrong questions.
It is possible to buy stock directly from some companies, for those few that are set up to do that,
but you won't get the market price, it will take numerous phone calls and mailings and several
weeks, and generally is a big hassle not worth the time.
You can't access the NYSE to trade without a membership, or a contract with a member
(broker). Currently, a membership (seat) is about $850,000.
Broker's fees are so small right now, less than $10, it's really the only way to go; online that is.
But even then, you would start out with a 5% loss.
Even if you had more money, what you should be doing is getting books from the library and
studying. It is a fascinating subject. Then you can develop a plan, and eventually a system to
trade.
Then you could trade free on a simulator for several months at Investopedia.com, and when you
start making "virtual" money, you can risk your own.
Or you can jump right in there and blow your $200. I'll sure take it from you, and there's a whole
system out there designed to do just that.
"Which Is Better, Buy-and-Hold or Market Timing?"
"Do You Have What It Takes to Be a Market Timer
The Beginner's Bible in Technical Analysis is:
Edwards & McGee"Tech. Anal. Of Stock Trends"
Droke, ClifTechnical Analysis Simplified
Kahn, Michael N.Tech. Anal. Plain & Simple
Kamich, Bruce M.How Technical Analysis Works
Lefevre, EdwinReminiscences of a Stock Operator
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10. Lofton, ToddGetting Started in Futures
Lowenstein, RogerBuffet (Warren)-The Making of a Capitalist
O'Neil, William J.How to Make Money in Stocks
Oz, TonyHow to Make Money From Wall Street
Rotella, Robert P.Elements of Successful Trading, The
Schwager, JackStock Market Wizards
You need to do the work first, learn a few terms, read a few books, which you will have to do
anyway. Go to the library, and browse through the row upon row of the subject. All of these
questions will be answered as soon as you take the first step and read a beginners guide to
investing.
Try to determine your time horizon. Short-term, long-term?
Take a look at charting and Technical Analysis for following trends in the markets. Why would
you own a stock that is in an obvious decline?
Realize right away there are two sides to the market, not just the upside. What goes up,
eventually comes down at least part way.
Learn how to analyze risk, and make this your primary approach, not by compounding profits
and erroneously analyzing how much money you can make. For example, most traders don't
make any money at all; more than 80% blow out.
Learn about money management techniques, and maybe you'll stick around awhile.
Try to find these books:
They say "Buy and Hold" for the long term is better, but that depends on when you get in, and
what your definition of "long term" is. The phrase "Buy low and sell high" infers that you buy
after a decline; but how much of a decline? If you had bought after a 1000 pt decline in the Dow
in 2000, you would still be waiting to get back to even, six years later in most stocks.
How to start trading online:
http://www.bernanke.cn/stock-trade/...
Http://www.stock-trading.jims-info.com/....
Http://money.howstuffworks.com/......
Http://www.investopedia.com/
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11. http://sharebuilder.com/
www.stockcharts.com
Charles asks…
Why does a Stock Market downturn affect Corporate Layoffs?
Every time I hear about the Stock Market plunging, I start hearing about mass layoffs and
everyone starts working about their jobs. But why? If a corporation makes its money on sales,
what difference should it make that their stock has dropped? The two seem unrelated.
The only cause-effect I can trace, with what little I understand about the economy, is that
stock investors sell their stocks when they see stock values plunging, but also stop buying
things. They stop buying things, companies stop making as much revenue, and when they stop
making revenue they lay off employees. But is it really that fast? Are there really that many
stock-investors supporting the revenue streams of that many companies? A majority of the
people I know don't invest in stock at all. The only stock I have is indirectly through my IRA or
401-k, and they just sit out there going up and going down and going up and going down like a
tide, having no influence on my buying of consumer products and services.
All these corporate layoffs seem to have begun almost immediately after Lehman Brothers
bankrupted. Why should unrelated corporations care that a bank went bankrupt? Aren't they
making their own revenues selling their own wares / services? If they are laying off "unneeded"
workers, gosh, isn't that something they should have done before? Or golly gee, maybe they
shouldn't have hired "unneeded" workers in the first place? Seems a lousy way to run your
business to suddenly "trim fat" when you shouldn't have had any fat to begin with.
The auto makers are suddenly in all this trouble because people are buying less cars this year?
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12. So what? Why do we have to reach into our taxes to help them?
I also understand the reciprocal affect: reports of mass layoffs could cause stock market to
drop because the stock market is affected by perception. Because it is based on perception,
the news media actually makes the stock market worse by reporting how bad everything is,
and everything gets bad when the stock market gets worse. It's like a psychosomatic tailspin
caused by this tango between the news and the stock market, and the news will certainly not
own up to having any part in this.
But I do not see the reverse: why would the stock market drop cause sudden mass layoffs?
Sorry this was a bunch of questions, but maybe someone can set me straight categorically.
(While we're at it, why would the price of oil drop so drastically at the same time? Is there a link
with this particular economic downturn or is that coincidence?)
Steve Winston answers:
The two are related - but you seem to have missed the relationship.
Stock prices go down because the profits of the publicly traded companies are expected to
decline. Company have lay offs when their profits are declining to cut costs.
The stock market tries (and sometimes succeeds) at predicting future profitability, while
companies often respond to profit shortfalls after the fact.
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13. Michael asks…
Need help with E*trade and the stock market, New to it.?
I'm really interested on investing in the stock market, long-term. I'm planning on just buying
one share to start with and seeing what happens from there. Can someone tell me how to use
E*Trade? How much I have to start with? When I do earn money what I can do with it? Is the
money for me to keep? Am I locked in to trading or do I just sell my shares and I free from the
stock market? If the stock I own fails do I have to pay anything. I'm new to this and I have an
account with E*Trade with no money or even started anything yet, I just got the account to get
familiar with the links and view of it. I know how the stock market works a little but not to
much. Any info will be helpful.
Steve Winston answers:
Okay, when you put some money in the account it will stay in your " cash" portion until you buy
some stock.... Then the value of your stock will rise and/or fall during each trading day.... When
it rises and you look at your "portfolio" , your account will be worth more...now anytime after that
you can sell your stock and that amount goes back into your cash... ( you cannot buy again with
THAT money for three days ... If the amount left in your account after that first buy is enough to
buy more stock you can use that portion... " day-trading" is NOT for small accounts )
You can withdraw from your account whenever you like...as long as you maintain a certain
balance I'd guess about $500./ $600.
If your stock loses money...you are " out" that much...rarely does anyone " lose
everything"...and you do not owe any more money..it's just that some of the money you used to
buy the stock is ..poof!...gone. Same as with a gain, you can sell your stock and " take the loss"
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14. and what money is left will go back into cash...for you to buy something else..in three days
..after the transaction is " settled.
Does it sound complicated...it really isn't...but if you log in to:
http://www.top10traders.com/
...you can open a phony account to learn a little about buying and selling,,,
I hope you figure it out.... I think wayyyy back in some of my answers I told someone more
about how to actually buy and sell on E*trade, stuff like market orders, limit orders, etc. Maybe
you can look back to find it....
Figure to start with about $ 500. If they'll let you...and you'll be looking to buy maybe 10 or 15
shares of something in the 9.00 to $20.00 range.... Do you know how to use finance/yahoo to
get quotes, etc?
If you do look up some of these : ICO...HTE..XSI...TITN..BZP..SGIC..SNS..
They are " in" all different things, but all pretty decent, with a low share price right now.
Couple more: QCOR..FINL...TSYS
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