Monday, April 17, 2006

Money from stocks

It’s been a rough month of March. I’ve been busy with my assignments and studies. However, I’ve made 2000 bucks from my initial 6000 investment in the stock market! Woohoo! That’s a 33.33% returns in less than 6 months and I barely touch the stocks!

Well, I’m going to write about stock market this session as its one of the easiest to make money if you have done your homework. Stocks are basically an ownership of a company. This will make you liable for the dividends i.e. parts of the companies’ profits. There’s two ways u can make money in stock market, either by getting dividends or by capital gains i.e. selling it higher than the purchasing price.

There are a few tips I can give you on top of my heads. I might add some more later. They are:

- Do some research about the company first. Their background, what they do, who their directors are and their financial statements.

- Invest on penny stock. They are stocks with prices less than a dollar each unit. History has said that most capital gains and money are made on penny stocks.

- Take time to learn financial education. Read books on how to be a smart investor. I recommend reading Rich Dad, Poor Dad series as they’re the books that gave me a new perspective in life and financial freedom

- Get in the market when it’s low and less active rather than when the market is hot as they tend to be unstable and unpredictable. It can crash anytime soon. Get out while u still can. Get in it back after the market has crash.

- Try looking stocks as a long term financial vehicle. Don’t expect to be rich in a month or 2 except if you’re extremely lucky. You can gain a lot by practicing patience.

- Stock market is a league of smart and educated personals. You’ll get crushed if you went into it without knowledge and expertise. Try looking for a mentor to teach you to trade wisely.

I guess that’s all I got for now. Will post later with more things to say!