Monday through Friday the stock market is alive and millionaires are made. There is no reason why you cannot make money off of the stock market as well. I’m not saying your going to make a million dollars here but there is nothing wrong with making a couple hundred bucks for about an hour to two hours of work a day. You do not have to be Gordon Gekko (get the reference?) to make money off of the stock market. Rather, you just need to have a general understanding of the market, be able to see trends and have an idea of what the future may hold.
So how can you make money off of the stock market?
1. Download the Bloomberg app for your smart phone. This will give you all the information you need about the stock market.
2. Pick a industry that interests you and read, read, read. I personally am interested in the technology/internet/banking industry so I research all companies relating to those industries. I do about an hour of reading every single day on stocks relating to those industries and I do all of my reading right from the Bloomberg app. It gives you articles related to the companies in your portfolio and articles on global matters that will affect the stock market.
3. Find stocks that you think have potential for growth. There is nothing out there that is a 100% a sure thing. Everything is speculation. As time goes on you become a better speculator. Speculation is why doing step number two is so crucial. For instance Facebook is going public in March so odds are companies that are affiliated with Facebook will do well once Facebook goes public.
The biggest thing before taking the plunge in investing in a stock is asking your self “Do I believe in their product/service”. If you don’t then you simply should not invest in the company. If you would not use their product than why would you invest in their company? If you do decide to invest you have to be completely emotionless with the money you put down for the stock. What I mean is that there will be days where the stocks decline and days where the stock increases. You cannot panic and just dump the stock if it has a bad day. The stock market follows trends and look at any graph and you will see that it looks like a heart rate graph. Even stocks that are considered “bullish” (meaning they are increasing) will have bad days. The difference between the average investor and a great investor is they foresee big drops/raises in a stock and know exactly when to sell/buy.
To start you should research the stocks you put in your portfolio for at least three months. Pay attention to them every day, watch how they react to certain events and study their graphs. Eventually you will start to notice trends and will be able to set a good buying point.
Expect losses. You have to know that even though the stock market follows some sort of pattern some stocks do plummet and never recover. This is why you have to do your reading and find out if the company is going bankrupt or is reporting losses quarter after quarter. Speculation is not perfect but if you get good enough at it you will make a lot more money than you lose.
Your now on your way to starting your very own portfolio. Remember when you choose to invest to have your selling points and stick to them. Do not get greedy. It will be tempting to just let it ride but stay disciplined and make the right decision.