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INVESTING BASICS Questions
From Beginner Investors:
Why should you consider trading online?
Over 10 million people trade on line, and that is projected to increase
to 32 million in the year 2003, with trades valued at over $1.8
TRILLION ! Why do you think you see so many TV ads for discount
brokers ? Because the volume is growing leaps and bounds, and I
can tell you why: because with online trading you can take control
of your investments, save money in expensive broker commissions
and make a higher rate of return on your money than you would otherwise.
It can enable you to retire earlier in life, live a better lifestyle
and gain a sense of accomplishment and satisfaction at the same
time. There is nothing more thrilling than knowing that you can
work within the stock market to control your future wealth.
Why do You see so many ads for brokers?
Large full service brokers make their money by commissions. It does
not matter whether your stocks go up or down, they still make the
same commission from you. In fact, it is to their advantage for
you to trade (buy and sell) constantly, since they get paid every
time you exercise a trade. And their motivation is contrary to what
a beginning investor philosophy should be: learning how to recognize
well managed companies, purchase their stock, hold them for 6 months,
and then re-examine your positions.The rewards can be phenomenal
if you take it seriously and decide to control your own personal
finances through online trading. Did you know if you invested in
the stock market for the last 20 years, the average rate of return
on investment would be 15%. Compare that to a 6% CD or a 2% bank
account. Believe it or not YOU can do much better than that with
a little bit of knowledge. By taking control of your own investing,
you can make 25%, 30% or even 40% per year ! Some people even make
200% or more. I live in southern California, and I can guarantee
you many people in San Diego made millions of dollars on Qualcom
in the last years alone. You see, the large brokers are slowly losing
their advantage, since YOU are being empowered to act as your own
financial manager. Online trading and discount brokerage firms allow
you to: track your stocks every 15 minutes, buy IPO's (Initial Public
Offerings) and even trade "after hours". Those privileges
were only reserved for the big brokers in the past, but now YOU
can have those advantages also.
Is it really safe for me to trade stocks
over the Internet?
Security is the primary concern of all the major brokers that offer
online trading. They use sophisticated encryption (scrambled code)
devices and also have implemented what are called "secured
servers". These are large computer networks with high levels
of security, some of which are even in vaults with fingerprint recognition
for entrance. In addition, password protection is required, and
you must identify yourself in a number of ways to access your account
information by phone. Many times your phone calls are even recorded,for
your own protection. I can tell you from my own experiences, they
take security very seriously and you really do not have to worry
about the security of your account with online trading. You also
receive what is called a transaction number each time you trade,
and you can print it out and save it if any questions arise.
How much money do I need
to get started?
You can open an account with some brokers for as little as $250.
Many of them also offer new customer signups and will give you from
$75 to $100 just for becoming their customer. If you are interested
but concerned about some aspect of trading, start small and "learn
the ropes" first. You can even not invest any money at all,
but simply create a "dummy" selections of stocks (portfolio)
and then track it for a few weeks or months. That is what I did
at first. I selected some stocks, checked their price that day and
pretended I invested $10,000. In that way, you become accustomed
to seeing your stock prices change as well as how to make changes
to your holdings. That method will also allow you to test new trading
ideas and concepts. It does not matter how much you start with,
the important decision you need to make is to get started today!
How much can I expect to earn?
This is not an easy question for anyone to answer. Let me give you
my own personal experience. I quit my job to devote myself full
time to my software company. At that time, I had a 401K with my
previous employer. I had to close out that account and roll it over
into my own IRA account. After using the methods I will explain
later, I made over 60% return on my money. Pretty good for one year
isn't it ? Well, I made 60% in my first MONTH of investing ! That
annualizes to 720% per year. Quite honestly, I thought I could make
25 or 30% per year with intelligent investing. I would be very happy
with that return for the rest of my life. If you follow my steps
for investing, you should earn a reasonable return on your investments.
There seem to be so many brokers, how do
I choose the one for me?
The last time I counted the number of brokers on the Internet, there
were over 150 of them doing business online. They charge anywhere
from $7 per trade to $29.95 per trade. Why do you think there is
such a wide variety of pricing ? As the expression goes, in some
respects, you get what you pay for. The higher prices come with
additional services you may need to get started. I have identified
the 10 key factors you need to consider in making your broker decision.
I can help you easily make the right choice for your personal needs.
What do you have to do to get started
in Online Trading?
Trying to make sense of the new stock trading revolution can be
very frustrating and tedious. There is so much to learn and so many
choices to make, you can suffer from information overload. You have
to decide which broker to choose, which stocks will be a good investment
as well as learn new terminology for the stock market. Then you
have to know how to prevent yourself against fraud on the Internet,
particularly when thousands of e-mails are flying through cyberspace
touting the latest hot stock that promises to be another Microsoft
! Lastly, after you have an account for online trading, you need
to be able to create, track and manage your portfolio. Sounds a
little bit overwhelming doesn't it ? Well I have done all this work
for you and I can show you how easy it is for you to do. I can save
you hours of time that I have already spent in researching and evaluating
different techniques. If you are considering trading online, I can
make the job much easier for you. I have already taken all the time
and done all the research that is necessary to choose a broker,
select great investments, and set up and track a portfolio.
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