Stock Market!??!!??!?!?
Answers:
I would actually venture to say that most long term investors that are committed to adhering to a diversified financial plan for their assets do make money. The average investor with a time horizon of greater than 5 years can expect to earn between 5-8% in average annual returns if they implement a financial plan usually with the assistance of an advisor. Some people make more if they are willing to take risk and deal with the volatility, and some make less if they choose not to invest in the market at all, they simply invest in cash equivelent securities. The key to making money in the stock market is time in the market, NOT timing the market. The market is tempermental you can loose a lot of money by constantly putting money in and taking money out of the market. Studies have shown that if an investor misses the 40 best days in the market over a 15 day period their average annual returns can be cut in half. Check out this link for more interesting data.
Probably not more than 20%. Most of them would make moderate amounts of money, but only a few of them would make large amounts of money.
The biggest problem that I run into as a financial planer is that people do not understand the markets. When investing in any type of securities you need to do you due diligence and understand what you are investing in. When investing, you need to weigh out the level of risk and reward for the investment. If you want to see the “big” returns, the risk is very high. I personally like to hedge any stock that I recommend. What I mean by this is you can buy option contracts to protect your downside or you would also be able to put a stop loss or stop limit order to protect losses. A stop loss is an easy way to sell a stock that suddenly drops, because it is an order that you put into the market to sell a security when it hits a particular price. For example, if you bought Wal-Mart stock at 48 dollars and you do not want to own it if it drops past 45, you will sell the stock automatically when it hits 45.
The next big reason that I find people are unsuccessful while investing is lack of knowledge of the market. Many people buy into stocks at the high, and sell at the low. This is because by the time they find out about the stock, it has already go up a lot, and the big investors will start to sell there position. Remember all stocks are winners, it just depends what side you are on. If you think a stock will go down, you can “sell short” and if you think a stock will stay the same price you can sell a straddle.
My biggest recommendation is to make a financial plan and stick to the plan. The number on reason why people do not hit there goals at retirement is because they do not follow there financial plan. The markets will always show volatility, but in the long run they have shown to be profitable with time.
I hope that helped
First of all, the question I have for you is what is the stock market? Instead of talking about making money "in it" do you know what "it" is?
For instance, take the Dow Jones Industrial Average. What is it? Exactly? It's the weighted average price of 30 large industrialized companies...companies that produce goods and services which you and I buy every day.
Walmart is one of the Dow stocks. While I don't particularly like the company, each week more than 138 million people shop at Walmart.
Microsoft is a part of the Dow. How many people use Windows? Johnson and Johnson sells thousands of products. Do you have tylenol in your cubboard? Listerine? Rolaids? Home Depot is a part of the Dow. When do you ever see their parking lot empty?
It's not about buying a stock, it's about owning companies. I'm so tired of people treating stocks as if it's a game or gambling. People make money every day in stocks.not by trading them, but by owning companies. Being a part owner in a company that sells goods and services that you, your neighbor, your brother and other people need and use every day.
Over the long-term owning successful, profitable, viable companies builds real wealth.not paper profits that vanish before you blink or hit that "sell" button. Buy stocks allows you to participate in ownership of some of the best run companies in the world. And being an owner provides financing for growth and expansion.
How many people make money in stocks? Very few. How many make money owning good businesses? Millions.
Now, go think like an owner...
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