Check Out My Youtube Channel

I just started posting How-to's and stock investing tips on my new Youtube Channel.  Be sure to check it out and leave me a comment as well.  Here's my first post:

How To Play This Market Nosedive

I have read a lot of strategies over the years and the common idea that sticks out is to buy when everyone else is selling and to sell when everyone else is buying.  This may seem obvious but not when the emotions of the market get to you.  It goes against the natural feeling that we all have of self preservation.  Whenever we see a crowd running away from something our own nature is to run with the crowd because there must be something dangerous in that direction.  The strange thing is we have not seen it for ourselves. 

Here in lies the issue.  You must investigate something before you run away from it.  Take the time to research a stock and find out whether the company is being managed well.  Then look at the financials as well as the technical analysis.  Lastly consider the market sector.  Is there still potential growth in this sector and is this company in a strategic position to take advantage of it? When you are confident in the direction of the company, do not worry about jittery fluctuations in the market based on insufficient data and world events.  Consider a drop in the stock price an opportunity to buy that stock on sale. 

Investing in a stock is like buying a property

When you buy a property you look at the value versus the price.  You also look at the neighborhood because you can change the property but not the neighborhood.  You also have an inspection done check to see if the systems are intact (HVAC, roof, foundation, etc.).  Lastly you check to see previous owners and check to see if there are any outstanding liens.  

You should do the same for a stock.  The old adage buy low sell high always applies so check to see if the stock is overvalued or undervalued. Instead of the neighborhood check to see what industry and sector the stock is in.  Is this industry declining or going through a rough patch or is it likely to go up (like the marijuana bandwagon).  The “systems” of a stock are the management, facilities, infrastructure, etc.  Look to see the pedigree of the people running the company, are they competent?  How long has the stock been around? What have the returns been?

Finally, if you are going to put a whole lot of money into anything make sure it has some value.  The goal is to increase your holdings not to gamble.

End Of The Year Dividends

So here's another tip that I just figured out... a lot of companies will pay larger dividends at the end of the year, sort of like a Christmas bonus. Just got mine and I'm glad I found out without even knowing.

How Do I Start Trading?

By Photokanok, published on 26 July 2013
Stock Photo - image ID: 100186685

The first thing to do to start trading is to set up an account with one of the online brokerage companies.  The most well-known are TD Ameritrade, E-Trade, Scott Trade and Charles Schwab.  I use Trade King because the commissions are low ($4.95) and you can call a broker to place a trade for you. The on-call brokers work magic, they can get your trade in better than your price sometimes. If you choose them let me know there's a referral program where we both can get $50.

For charts and analysis nothing beats Think or Swim. I have a TD Ameritrade account just for the Think or Swim paper money and for their Investools free classes. I don't trade on them however because their commission is $10, just for practice and info.

This will get you up and running.  The key however, is to practice before you trade.  Be sure to make use of the paper money trading tools.  This helps you to practice strategies and get used to the stress of pulling the trigger.  Your emotions will get the better of you if you let them so it's good to plan your entrance and exit strategies and to be disciplined.  

 

Investing in Software

Another idea I came across in my constant research on creating residual income is to buy software or apps that people have made and are still generating income.  There are a couple of sites that have been set up as a clearinghouse for people who have created apps and are selling them to investors.

Some of these apps are being sold for as low as $500.  Many of them range, however, from $1,000 on up to $50,000.

The key to making a good investment in this type of product is to make sure that the software or app is still being used.  You can check this by analyzing the data on Google analytics and through the website that is selling the app. 

By KROMKRATHOG, published on 27 April 2013
Stock Image - image ID: 100162204

However, even if the app is not making any money at the moment the question is has it made money in the past and what would it take to get the app to make money in the future.  Just like Warren Buffet's approach to investing in companies you can buy a company with a strong idea and balance sheet but is not performing based on temporal conditions. 

Sites to buy apps:

http://www.apptopia.com/

http://www.sellmyapplication.com/

For Beginners

If you don’t have a lot of money to trade (which is most of us) start out small and learn how things work.  You can start with as little as $100 but I suggest going with $500 to $1,000.  Now before you trade a dime you should spend at least 2 weeks to a month trading paper money on Think or Swim from TD Ameritrade.  It gives you a handle on how to place a trade, what things mean, and how not to make major mistakes.  I suggest doing your actual trading on Trade King or any other low commission site because TD Ameritrade’s commissions make it pointless for small investors.  Its nigh impossible to make a profit when your commission price is $10 a trade which means it will cost $20 to get in and out of a trade.  That’s my profit horizon on some stocks.

The goal is to keep it simple.  I start out with saying I’ll make $20 a day on one trade and even if my profit is $8 I still made money.  

Disclaimer: I am not an endorser of any trading platform I just found out which platform worked best for me and was a good value for the money.