In investing into the stock market, which is an option that I’m proposing that you consider in helping to build your extra war chest of funds. I’ve made that decision myself a few years ago and it helped me in building my nest egg. Thank goodness I did so as I’m using those funds to live on today. Although my funds are dwindling down now, I’m having a great time in spending those investment dollars that I made from investing earlier in life.
When you get older like me, you’re going to need these extra funds to live on so don’t take this point too likely. You will find out that your social security benefits won’t be enough to live like you want. In having money when you are older it’s fantastic, as you don’t want to be without it. Since I want each of you to have funds also, I’m planting this seed now but you have to water it for it to grow.
However, in investing in the stock market it does have some complicated components which can be difficult if you have no knowledge of how wealth is accumulated. But it also has some easy to understand principles that the average person would grasp and that is you must buy low and sell high.
In choosing to buy stocks, you have to be very careful in deciding what stock to put into your portfolio as this process isn’t easy. It’s a daunting process because there are thousands of stocks to choose from and you want to pick the stocks that will help you to become rich.
In building a profitable portfolio you want to select good companies that have solid and consistent earnings. You want to stay away from stocks that go up one day and go down the next, as that is not value investing. You need to invest in stocks that they will give you the greatest chance to make a profit year after year, as that’s how wealth is accumulated. Personally, investing in stocks that pay dividends is a strategy that I prefer for myself, as I need the income because I’m now older.
On the other hand, if you rather invest in the high-flying stocks like Facebook, Apple, Amazon, Google, Netflix and a few other stocks, you can do that as well. This type of investing is called momentum investing, and this style is to follow whatever is hot at that moment, which is mostly technology stocks. You can hit it very big in owning these stocks, but you have to be lucky enough to buy these stocks before the crowd gets in and that is hard to do.
In investing in the stock market you need to understand that you can earn the big money and you also can lose money. In other words, you can’t take your rent money, or your car note money, the babysitter’s money and you know the rest, to invest it into the stock market, as that would be dumb. The experts will tell you that investing with money that you can’t afford to lose is unwise. In the world of investing, we call this process as knowing your “risk tolerance” level. This means if you are willing to take a high risk by investing in a speculative stock, you may hit the jack box and become very rich. Everyone wants this result but it doesn’t always happen that way. There are people who have also not done well and have ended up on the streets homeless in the Bowery, and no one wants that.
The average person who is unfamiliar with this process will go to a professional. I’m not against that approach if you have no knowledge of how the process of buying and selling stocks work. However, more people are beginning to put the time in to learn how to invest in the stock market for themselves as they want that extra income. They are no longer willing to work that nine to five for forty years like their parents and hope that the company’s pension plan will help them later on in life.
However, picking stocks is not a sure bet and that is why some people are broke and others are rich. Some are good at picking stocks and others are not. Much of this good fortune is related to those who have conducted better research. However, there are people who research stocks for a living and they still can’t get it right. I wished that I knew the secret of picking the right stock because if I did, I would be very wealthy myself.
Your next question will most likely be how do I choose the quality stocks on my own?
You have to be willing to do some homework in order to be successful at investing. Reading about how to trade in the stock market is a starting point. There is a lot of material on the internet to help you get started as a first-time investor and you should start there before you put any money to work.
Meanwhile, I have done some research on a few stocks that I believe that you may want to consider investing into as your starting off point. The list of stocks noted below is primarily for the value investor if your investment strategy is for long-term growth. (NOTE: PLEASE CHECK WITH YOUR FINANCIAL ADVISOR BEFORE INVESTING IN ANY OF THESE STOCKS).
T – The current price is 42.50 Dividend is 6.50% American Telephone
BKCC – The current price is 28.90 Dividend is 10.72% BlackRock Capital
OHI – The current price is 33.84 Dividend is 6.77% Omega Healthcare
VGR – The current price is 22.43 Dividend is 7.15% Vector Group LTD
RWT – The current price is 12.90 Dividend is 8.22% Redwood Trust
These companies have paid dividends on a consistent basis so they have a good track record. So if you have some funds on the sidelines that you would like to invest, these are some stocks that you may want to delve into. But for extra safety, you should discuss this with your investment professional before you act on this suggestion.
Now for those of you who don’t have the patience and want to swing for the fences right now by investing into speculation stocks, I have a few stocks for you, as well. However, this category is not for people who have a heart pacer, or can’t take the big stock market swings because these stocks will give you that up and down market volatility that most people can’t stomach. The profit returns can be enormous but there is also that risk where you will lose your investment. As long as you know this high-risk factor up front, let me provide a listing of these stocks.
CHK – The current price is $ 4.42 Chesapeake Energy
BGI – The current price is $ 2.48 Birks Group
MT – The current price is $ 5.66 Arcelormittal
CALI – The current price is $ 2.42 China Auto Logistics
LC – The current price is $ 4.22 Lending Club
These are the stock market symbols of these more risky stocks. If you check the website dailystocks.com you will get a listing of the latest high-flying stocks that are moving the most. You can also check out these companies by looking them up at yahoo.finance if you want to get more information on what these companies do and I suggest that you do so.
In closing, I have provided an outlined on how you can get started investing into the stock market. You can begin as a value investor like me, where you will invest in safe and less volatile stocks. Or as a high-risk person, you can go for home runs and invest in those speculating stocks noted above. At the end of the day, it’s up to you to make that choice.
I also recommend that you use a discount brokerage firm to do your trading like, Scottrade, E-trade, and TD Ameritrade as their fees are lower than the large brokerage firms. Finally, learning how to invest is something that I believe that we all have to do in order to protect ourselves for tomorrow. I hope that this information helps you in some way in building your extra bucks by investing in the stock market. You can do it, Good luck !!