Stock Market Today » invest in the stock market

Are there math courses in university that teach you how to invest in the stock market?

TonyLiu — Thu, 12 Aug 2010 03:37:56 +0000

（If there is courses that teach you this, can you give me a website so I can check it out. I am planning to go to TrentU in Ontario. So if you can link me a page on trentu.ca you get best answer!）

Answer ：

To be honest with you, investing in the stock market does not involve extensive knowledge of mathematics. On the contrary, I would not be surprised if the majority of the most successful investors had very little understanding of mathematics.

Most of the time, academics develop the models used in the securities industry because they have an interest in understanding how the stock market works but they have no interest in playing the trading game.

Also, let me warn you that there is no mathematical formula that can give you a concrete answer as to whether or not you should invest in a certain company. The factors involved in that decision are very subjective.

Has it become fundamentally wrong to invest in the stock market?

TonyLiu — Mon, 09 Aug 2010 08:57:17 +0000

(Over a decade of negative growth with the most accurate forecasters claiming there is no light ahead. Have stocks proven to be an inherent bad financial investment? Do experts agree that this type of investment doesn’t have a long term positive expected value?
Noe that I’m talking in aggregation, not about individual stocks.)

Answer:

You are apparently reading the wrong newspaper, website or book, listening to the wrong radio station, or watching the wrong talking head…experts cannot help but agree (since the data are so plain) that over any two-decade period (including during the “Great Depression”), the broader stock market has ALWAYS outperformed every other investment vehicle…as it has for almost 300 years, and will continue to until humans stop having good ideas and stop being greedy!

You should do the math yourself instead of listening to whoever you are listening to!

If you had invested $10,000 split equally among the Dow components on this date twenty years ago and held it through today, you’d be up 258.77% (an average annual return of 12.9%) PLUS you would have earned close to an additional $10,000 over that time in dividends.

NO other investment will ever do that sustainably!

Should I finish paying off my student debt before I start to invest in the stock market?

TonyLiu — Mon, 09 Aug 2010 01:43:02 +0000

(I’m looking at about $15,000 in federal student loans. I believe the current rate is around 7%, but I’m hoping to consolidate and get it down to 6%.

Should I pay it all off in a hurry and then get to investing, or are there certain type of investments that are worth getting into right away?

Thanks!）

Answer：
It does depend a little on how good of an investor you are. The better you are, the more likely you shouldn’t pay off your loan.

But even if you suck at investing, there’s a great argument to not pay off the loan.

The loan’s interest is 6 or 7% per year in expense you have to pay. But, you get a tax deduction each year for that interest expense, so after tax, you could fairly reduce the interest expense by a half percentage point per year. So, it may be costing you only 5.5% per year after taxes if you consolidate.

On the other hand, stocks will return even an idiot 10% per year as long as they hold an index or mutual fund with no or low expenses. Paying off the loan will force you to incur a large opportunity cost.

So you will become wealthier over the long term if you use your money to invest in stocks rather than pay off your loans. The difference is 10% per year minus 5.5% per year = 4.5% per year better.

That 4.5% difference per year compounds too, so if you took say 15 years to pay off your loan, that 4.5% spread per year would result in 1.045^15 – 1 = 93.5% before taxes, and about 80% after taxes.

So, if you do invest, you’ll be almost twice as rich buying stocks vs paying off the loan.

The only consideration here is: Can you afford the leverage? In other words, can you afford to make your student loan payments? If so, stocks are the better way to go.

One more consideration: Margin loans to buy stocks usually charge interest rates of 7-8% and the interest isn’t tax deductible like student loan interest is. So you could look at it like you are actually getting a government subsidy to invest in the stock market that is tax deductable.

How does a regular person invest in the stock market?

TonyLiu — Thu, 05 Aug 2010 08:36:22 +0000

(Mark Cuban did it. I want to make big money off investments. How do I do it. I dont have a lot of money. I am just a single mother trying to make it .)

Answer :

As a single mother with limited income and no prior experience, you do not want to go out and buy individual shares. You will almost certainly lose your money.

If you have at least $1000 to invest, open a ROTH IRA at Vanguard and buy their STAR fund. This will give you an excellent spread of risk, and will over time make you money.

If you have less than that, open an online trading account (like e*Trade) and buy ETFs. I suggest one that tracks the Total Stock Market to begin with. Vanguard have these too, but you can buy various ETFs.

How do you invest in the stock market?

TonyLiu — Thu, 05 Aug 2010 07:35:31 +0000

(I am interesting in saving and investing for my daughter future. I don’t have a lot of money and I don’t know the first step in investing. Would someone help with this question only serious adult respond please.)

Answer:

First you need to start an account with a company like Schwab, Scottrade, Vanguard, or T. Rowe Price. The kind of account depends on what you are saving for. If retirement then a Roth IRA, college, then a 529 Plan, or for long-term savings with stocks, then just a regular stock account. After filling out a application, you send in the money, and it goes to your account. Then you get to pick what you want to invest in.

For a younger person it is better to be more aggesive in investing, so invest in stocks rather than CDs or bonds, and maybe mutual funds. Mutual funds are more diversified yet they usually don’t make as much if you do proficient research for stocks.

So what do you want to look for when buying stocks from a company? Look into different companies that you know that you think do well, sell good products and have room for growth. Once you do that, look at the history of how the stock has done. Also look at the recent new, the ratings, more on what the company does, and what others say about it. Then when you narrow it out to a few companies that you know a good amount about, watch them some before you buy them, and see how it responds towards the recent new about them.

If you really don’t have time and don’t want to keep looking into new companies and you just want to forget about it, then you’ll never get the full potential, but mutual funds will be a little better for that situation.

How do I begin to invest in the stock market? where do I go to buy?

TonyLiu — Thu, 05 Aug 2010 04:28:04 +0000

Answer:
Before you give any consideration as to ‘WHERE” to go and buy you should first know what you are doing, why you are doing and how to do it. Once you understand all of that, then you can look at where to do it but by then you’ll know where.

Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.

Here is some reading material that can get you started in the right direction,
The first book you should read is Rich Dad Poor Dad by Robert Kiyosaki
Then try some of these
What Works on Wall Street by James O’Shaunessey
Beating the Street by Peter Lynch
One Up on Wall Street by Peter Lynch
The Warren Buffett Way by Robert Hagstrom
Trading For a Living by Alexander Elder
Mastering the Trade” by John Caster
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Disciplined Trader by Mark Douglas

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why. This site has some basic information for beginners. If any site offers free information, take it.

Other website that can provide instructions and help with procedures and terminology are
Investopedia – http://www.investopedia.com/ Stock Charts – http://stockcharts.com/
http://www.investorshub.com/ http://www.1source4stocks.com/

Visit some of the more professional websites like Zacks – http://www.zacks.com/
Smart Money – http://www.smartmoney.com/ Schaeffer’s – http://www.schaeffersresearch.com/
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.

Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses. Try to get some fee information from the stocks exchanges they all have (had) free

Good luck on your journey

Is it wise to invest in the stock market while still in debt?

TonyLiu — Thu, 05 Aug 2010 02:25:16 +0000

(Im currently about $5,000 in debt (will be paid off by August!), is it okay to invest right now?)

Answer :

It would be foolish for a market novice to invest available money in the stock market if you could use that money to pay off your debts.

Investing in the stock market ain’t easy and involves significant risk. The obvious risk is that you could conceivably lose all of your money and still have all of your debt — and wouldn’t that really, really suck?

Is it a good time to invest in the stock market?

TonyLiu — Mon, 02 Aug 2010 05:24:22 +0000

(We never invested in the stock market and now that it is down, we are thinking to invest around 20K, all of our savings. is it a good time?）

Answer ：

The stock market is like gambling at a casino. You can have runs of luck and a few people get really lucky, but most little players get hurt.

The only sure thing is investing in foreign currency like the Japanese Yen or Euro. They always have and always will become more valuable as the dollar goes down in value.

Those two economies don’t use inflation to pay off today’s debts. Since WWII the US has used inflation / deflation of the dollar, to pay off the national debt. It is easier to pay off a debt in the future with dollars worth only 50 cents.

Does Islam allow Muslims to invest in the stock market?

TonyLiu — Mon, 02 Aug 2010 04:53:01 +0000

（Is it permissible for muslims to invest in the stock market or is that wrong because it’s kind of a gamble?）

Answer ：

Yes, Muslims are allowed to invest in the stock market as long as the companies are in compliance with Islamic rulings.

First of all, stock isn’t gambling to begin with Imagine that you own a business. If you were to divide that business up into small pieces and sell those pieces, you would essentially have issued stock. Quite simply, stock is ownership in a company.

The money you raise from selling those “pieces” of your business can be used to build new plants and facilities, pay down debt, or acquire another company. A smart owner will keep at least 51% of the stock, which will allow them to retain control of the day to day activities. Any person or institution that owns over a majority of the stock is called the “controlling shareholder”. Essentially, this person can do anything they want – right down to firing the CEO.

The Quran is explicit in its advocacy of all forms of legitimate commerce through dozens of verses, such as Chapter 2:275 which reads, “Allah has permitted trade…” As long as the companies operations and businesses comply with the Sharia (Islamic Guidelines), it is okay to buy their shares.

Similarly, financial investment is given relevance by the Prophet as can be seen, for instance, from the Hadith of Amru bin Shuaib related from his grandfather that the Messenger of Allah said: “Whoever is entrusted with the money of an orphan should trade with it and should not leave it sitting to be used up by zakat” (Tirmidhi).

The Messenger (PBUH) urged the trustee on the estate of people who due to age (or other reasons) cannot manage their own financial affairs, to invest it in a business that will yield a return and make it grow until they are in a position to do so themselves. For, if proper investment is not made with such funds, the same will be depleted by zakat (obligatory annual charity), thus leaving the orphan with little or nothing.

Allah knows best,

May Allah guide us all

How can I invest in the stock market?

TonyLiu — Mon, 02 Aug 2010 03:54:54 +0000

(Okay, this may seem like a stupid question, but I’m a teen and I really want to invest in the stock market (small amounts, just for fun). Right now all of my money is in cash… how can I use it to buy stocks?)

Answer :
1. Where ever you buy your stock, they will want your Social Security number, for tax purposes.

2.. You need to get a bank account. I don’t think brokers take cash. Plus if you use an online broker, you will need a bank account anyway to transfer money to your stock account.

3. Know that any profit you make is subject to be taxed after you sell your stock. Plus, any time you buy or sale, somebody gets a fee.

4. You need to find a brokerage firm. Either a real live stock broker, or an online company. These are the people that take the fees.

5. Some brokers require a minimum investment of like $1000 or $2000, so you need to find a person or online broker that doesn’t require minimums.

If you buy online, be sure to find a company that charges lower fees for each trade. I bought $15.00 worth of stock yesterday and got charged a $10 fee to buy it. That sucked. But, the online place I’m using is supposed to give me $25 in a few weeks for opening an account. I figured I would get my money back like that, or I wouldn’t have used that company.

I think you should try it. Study hard about the company you want to buy stock in. See what the stocks high was over the last 2 years. If it was a lot higher, then there is a chance that it will go back up, when the stock market gets better. Just make sure that the company isn’t about to go bankrupt.

You can use yahoo to build a portfolio and watch the stock market. They even follow it live. Also, yahoo will help you find out about the company. They have a list of recent articles about what is going on with a company. Also, you find find out what the company makes and what kind of profits they make.

go to my yahoo, click on Add content, at the right there will be a list hit all and then click on money, then click on the ADD box stock portfolios , then click on where it says Please visit Yahoo! Finance to create your own portfolio , then click Create new portfolio, then click Track a symbol watch list
Now you are ready to start building and watching stocks you are interest in.