Investing and Investment Tips

Investment FAQs

If you have some nagging questions about investing, you might find some answers here. We have answered some of the most basic questions on investing in case you’re too shy to approach your finance-savvy friends. So here they are. Just browse through this page. We probably have you covered.

investing FAQs

Can I get rich by buying stocks? Am I missing out by not investing?

Simply buying stocks won’t make you rich. But, knowing what and when to buy stocks will. There are many forces that influence the stock market, including consumer sentiments, company earnings, natural disasters and political events. These are all rather volatile variables, so there are really no guarantees in investing. However, if you have a sound strategy and a long term plan, experts agree that investing is the best way to grow your money.

What’s a dividend?

It’s that portion of a company’s profits that is paid to people who own shares of the company’s stocks. Some stocks, however, don’t pay dividends. For example, small, fast-growing companies need to reinvest their earnings back into the business so they usually do not pay dividends. However, as the company becomes bigger and more established, growth may slow down. When no major gains are being made, a stable company may pay out dividends to keep stockholders happy.

What are the telltale signs of a healthy stock?

The answer to this can be pretty subjective. It all depends on your goals and priorities. If you’re after high risk high yield stocks, then you want them to have the highest value possible over a short period of time. If you’re after more stable, but slower growing stocks you want those with very little fluctuations over a 52 week period.

Do you think buying stocks from companies or brands I patronize is a good idea?

The value of buying stocks from brands you use is it will help you gauge the extent of consumer demand. From there it helps you identify critical changes in market trends or changes in the industry. However, you shouldn’t stop there, but check stock price fluctuations, price-earnings ratio, analysts’ forecasts, and the company’s health.

What does it mean when someone shorts a stock?

A person who shorts stocks is speculating a drop in the price of a particular stock. The speculator then borrows stocks from a brokerage house and sells them at the current market price. When the stock’s price dips, the speculator profits from the difference in prices and pays back the brokerage house the amount it owed. If the stock price rises, the speculator takes a loss.

So if there is shorting is there longing of stocks?

Longing a stock is what we know as conventional investing. It is the foundation sound investing – a long-term strategy where you buy and hold the stock for an indefinite time period. The growth will be slow but steady.