Coli brehs... are stocks this simple?

[Broke Wave]

I'm going base on what my cousin told me (he's a CPA) 4 years ago but that's part of it another part of it is
looking at a company statements is the most important part of this
Don't go based on hype go check their financials to see if in the long term will they be profitable, make your decision there

Your cousin was probably trying to simplify a complex situation to you. A CPA is an accountant anyway and not legally allowed to give professional investment advice. That would need to be a CFA. Anyway point is there's no such thing as a free lunch in investment. You can't just use simple knowledge to make a buck. You're in the a market worth trillions, do you think it's that easy to get a garunteed buck? To know when the Iphone is being released and buying based on that??? Cmon.

 

[Malik1time]

Your cousin was probably trying to simplify a complex situation to you. A CPA is an accountant anyway and not legally allowed to give professional investment advice. That would need to be a CFA. Anyway point is there's no such thing as a free lunch in investment. You can't just use simple knowledge to make a buck. You're in the a market worth trillions, do you think it's that easy to get a garunteed buck? To know when the Iphone is being released and buying based on that??? Cmon.

I never cared for stocks anywayI rather put money in a mutual fund
I make money off forex market
Forex is more simple to me then stocks

 

[KidJSoul]

Yo I just wanna thank all of y'all for the advice and help

To clarify, stock price and company profits are not necessarily related. The stock price is tied to demand. More folks want to buy the stock, it goes up. More folks want to sell it, it goes down.

Sure, if a company releases it's earnings and they're better than expected, people TEND to buy the stock and it goes up. But the stock price doesn't automatically go up because the company exceeded expected profits.

The average individual stock buyer either tries to anticipate short term market movement or trails stock price increases/decreases. In both cases, you're likely not to do well. Don't try to ride bandwagons. If you see a stock price rising over a short time, you likely already missed that wave and end up buying high, the opposite of what you want to do. The opposite is true. Folks will own a stock, see the price dropping and sell, again, the opposite of what you want to do.

My advice is to buy for a long term hold. Good companies tend to do well over time, so their stock price tends to rise long term. Bad news or bad earnings for a quarter may knock the price down for a short while. The key is holding onto the stocks you believe in so yo don't miss when it rebounds.

So aside from long term holds, how else will you get any dividends from the companies?

 

[BezO]

So aside from long term holds, how else will you get any dividends from the companies?

Look for companies that pay dividends. They tend to be bigger, more established companies with large market shares. GM, IBM, Coke, Walmart, etc. They pay quarterly, so you'll get paid 4 times a year for as long as you hold the stock.

Be aware that tax on dividends is higher than tax on capital gains.

If you're just starting, I strongly recommend mutual funds. Folks much smarter than us group stocks according to type... large, medium, small, value, growth, foreign (emerging & developed), so each fund is already diversified. I'd also recommend diversifying further by buying several types of funds, split according to your goals.

Buying individual stocks, if done right, takes a good amount of research. And you would want to diversify by mirroring what I suggested with mutual funds. Buy some stock(s) from each group, split based on your goals.

I recommend 2 books. The Bogleheads' Guide to Investing by Larimore, Lindauer & LeBoeuf and The Four Pillars of Investing: Lessons for Building a Winning Portfolio by Bernstein. And a couple of economics books won't hurt. They tend to be slanted, liberal or conservative, so try one of each.