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Question: Is their an easier way to understand investing?

(Posted by: James on 2010-09-04 05:50:55)

I been reading books, asking tons of questions to other investors, I go to google finance, yahoo finance. Investopedia.com. But it seems im not processing the information about investing very well. Im currently 18 years old, i been interested in stocks since i was 16. I want to be a financial analyst when i grow up. Investing is not easy at all, but is their a easier way to understand it. Please help.

Posted by: Blazenskyy.com on 2010-09-04, 06:53:26

In my opinion the best way is to watch programs on the stock market such as CNBC, Bloomburg and read investment magazines. More importantly read books such as Investment Gurus or Stockmarket Wizards or a Random Walk Down Wall Street. Watch the PBS series on The Acent of Money which explains the history of the stock and bond market, banking and goes into bubbles in financial history. Also watch Nova's Mind over money or Frontline business and economics episodes. If your not processing the information learn what is the best way for you to learn. Is it video, ipod podcasts, radio, books, talking classes or talking with the experts. Don't worry it takes years of experience and education to become a good financial analyst. Take your accounting classes now along with finance courses. If your investments aren't doing well it's probably because of the recession. Even the experts will have trouble making money. Learn to shop or buy only the best and either reduce your risk or focus on quality. Sometimes putting your money in a money market fund is the only way to sleep at night especially in a bear market. Other books that may interest you include pyschology books or Malcolm Gladwell books. I do believe in the 10,000 hour rule so you do need to gain experience especially on the job. Try doing a summer internship at a brokerage house or find a mentor. Good luck!

Posted by: John J. S on 2010-09-04, 05:54:42

Think of buying stocks on the secondary market (no IPOs) as a casino and the major brokerage houses own the casino. They have rigged the game so they win no matter what. They charge you to buy and charge you to sell and tell their salesmen in one place to tell people to buy and in another place to sell and they take out options (puts and calls0 to manipulate the price of the stock.

Posted by: MACD on 2010-09-04, 09:31:56

No, if it was easy...no body would bother working for a living. Best advice I can give is to study human nature and psychology of crowds. Look at financial markets over a one hundred year period or more. History repeats itself with major boom/ bust cycles that seem to endlessly replay themselves. When all the people who were alive during the last great cycle are gone (passed on) ...watch out...it's time to repeat the ride again. Math/ statistics/ financial formulas can't determine what human beings (who do all the buying and selling) are going to do. Observe market behavior over time....when you see a cycle look like it's going to repeat...act on it and monitor your results. Know when to buy and when to sell (YOU have to determine this). If you listen to other people all the time....you will succumb to paralysis by analysis. Think for yourself.

Posted by: Mike on 2010-09-04, 10:10:03

No prior to the 1980s, investing was based primarily on technicals (mob rule) and fundamentals (value and growth). Since then the market has become much more speculative each year with hedge funds that buy and sell large positions daily, short the market or short covering, and high frequency trading. High frequency trading (trades made in microseconds) has come under heavy criticism lately for tactics of flooding the market with trades (trade stuffing) that will never be executed causing systems to divert orders to less liquid exchanges causing large swings in prices. Also because of the current tactics of hedge funds, fundamental investing has been left in the dust. The only suggestion is that you hang on to stocks that have good fundamentals since eventually the power of hedge funds will shift (may take 5 years or more) and that is the best recommendation you will be able to make to your customers when you become a financial analyst.

Posted by: Robert on 2010-09-04, 11:42:02

I have been where you are - it does seem hard and just like art, it takes practice. The other thing is that there are a hundred ways to be successful, all of them different. Some swear by news, some fundamentals and some technical. So, how to figure it out? First, decide if you are interested in investing (long term - think months and years) or trading (days to months). Then find a site where you can paper trade - no money, only the game. Find a strategy that works for you. There is no one approach that works for all - that is the good news and the bad news. Keep in mind that a world class strategy may only have a 70% success rate on any one trade. Once you have a feel for what works for you, start trading with real money. Finally keep it simple - the market trends up and down and volume changes. You would be surprised that some people make a lot of money with a chart and a ruler!

Posted by: nithya on 2010-09-05, 00:12:28

ITS NOT VERY THOUGH TO UNDERSTAND... PRACTICING WILL MAKE YOU A GOOD INVESTOR.. For more details contact srilogasen@gmail.com

Posted by: Party on 2010-09-06, 03:33:20

Hey there u need practical experience buddy so why dont you trade the markts with play money. Invest the play money on different stocks, commodities and currencies and learn to know more about investing. gnutrade online trading paltform will help you in understand abt investing