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How safe is the Stock Market





carl_fernandes
How safe is it to invest in the stock Market... Are there any rules to follow before investing in a company... How does the price of shares work... I mean how can the price fluctuate so much everyday.. On what basis are the calculations made.. I see the stocks of some companies swinging by 4-5% everyday.. does it mean that the company is doing so well that its value increases by the day.. and when a stock falls is it the indication of the company doing badly... Any views and answers on these question ?
pikachu25
How safe is it to invest in the stock Market...

Not very any event (like oil prices or a flood) make the market crash Crying or Very sad

Are there any rules to follow before investing in a company

Check to see of the company has a good history (no crime coverups...) and demand for what they do

I mean how can the price fluctuate so much everyday On what basis are the calculations made

% of company total vaule C
ompany vaule goes up stock $ goes up
deanhills
carl_fernandes wrote:
How safe is it to invest in the stock Market... Are there any rules to follow before investing in a company... How does the price of shares work... I mean how can the price fluctuate so much everyday.. On what basis are the calculations made.. I see the stocks of some companies swinging by 4-5% everyday.. does it mean that the company is doing so well that its value increases by the day.. and when a stock falls is it the indication of the company doing badly... Any views and answers on these question ?


Your questions reveal a low level of knowledge, and at that level it would be very high risk to invest on the stock exchange. If you intend to invest on the stock exchange you have to learn much more.

Bear in mind that some countries have rules and regulations and it may be safer to invest where you are dealing with licensed advisors and brokers.

If you do not want to go through the hard work of taking a training course nor have time to watch your stocks on a daily basis, you can see a registered and licensed broker. Depending on how much you wish to invest (if it is pennies you will be wasting her/his time obviously) the broker will be keen to educate you.

Otherwise there are plenty of books out there as well as information on the Internet.

When a stock falls it is not necessarily an indication of the company doing badly. There could be news such as the Chair of the company resigned, a number of things. Also sometimes the stock falls slightly after dividends have been paid out. Many factors involved in the price of a stock.
sucram
carl_fernandes wrote:
How safe is it to invest in the stock Market... Are there any rules to follow before investing in a company... How does the price of shares work... I mean how can the price fluctuate so much everyday.. On what basis are the calculations made.. I see the stocks of some companies swinging by 4-5% everyday.. does it mean that the company is doing so well that its value increases by the day.. and when a stock falls is it the indication of the company doing badly... Any views and answers on these question ?


In terms of safety do not worry, it is really safety! The thing is that some people invest in the stock market without having enough economic knowledge. So my advice to you would be to ask for a professional advice and above all do not believe if somebody tell you that he knows a secure and profitable investment! Nobody can predict the future!
badai
if you are afraid or do not want to learn, just invest in trust fund (or whatever they call it in your country, where an organization or a person called fund manager will manage it), and they usually will put your money in stock market.

this way, you don't have to fork out lots of your money, so you won't lose much if the fund manager screw up.
ddoonie
Stock market is far from safe. Traders have the same success rate as new business, ie 80-90% fail... Trading futures, i've lost 10,000 in 2 minutes, and have also made 30,000 in 10 minutes (6 contracts). I suggest you paper trade for a minimum of 6 months. Place trades as you would in real life. Then see what your outcome is. If positive, move on to real money, MAKE sure to limit how much you are learning on. Trading with real money is a different game. Trading is, in my opinion 90% emotional. Read as much as you can, learn strategies etc... The stock market is a zero sum game. If you make money, someone else lost. Now think about the traders that gave been in the game for years, and do you think you have a real chance...

If you plan on doing say 1-2 trades a month, than it is not as dangerous. More research etc...

Two different trading strategies, technical and fundamental. I'm technical, but i also trade intraday.
ddoonie
Sorry forgot to add... Stocks range more thaan 5% a day, maybe from open to close, but intraday, it is ridiculous how volatile a stock is. Invest in some charting!
singh.gurjeet
ddoonie wrote:
The stock market is a zero sum game. If you make money, someone else lost.


Well... It's no completely zero sum!!! The brokers and broking agencies earn their millions from you guys. Whether you buys or you sell, whether you gain or you lose, these blood sucking brokers gain out of it!
{name here}
carl_fernandes wrote:
How safe is it to invest in the stock Market... Are there any rules to follow before investing in a company... How does the price of shares work... I mean how can the price fluctuate so much everyday.. On what basis are the calculations made.. I see the stocks of some companies swinging by 4-5% everyday.. does it mean that the company is doing so well that its value increases by the day.. and when a stock falls is it the indication of the company doing badly... Any views and answers on these question ?

It's as safe as you want it to be. You can trade risky stock that has the potential to give you a high rate of return or bank on stable stock which will give you a more gaurunteed small return.
ddoonie
singh.gurjeet wrote:
ddoonie wrote:
The stock market is a zero sum game. If you make money, someone else lost.


Well... It's no completely zero sum!!! The brokers and broking agencies earn their millions from you guys. Whether you buys or you sell, whether you gain or you lose, these blood sucking brokers gain out of it!


This is still zero sum. The money they are earning, is from those losing. If you are talking broker fees, those arent related to the stock market.

As the last poster stated, it is as risky as you allow it to be. There are stocks that move 3 cents in an entire week, and there are those that move 20 handles in one move...
singh.gurjeet
ddoonie wrote:
singh.gurjeet wrote:
ddoonie wrote:
The stock market is a zero sum game. If you make money, someone else lost.


Well... It's no completely zero sum!!! The brokers and broking agencies earn their millions from you guys. Whether you buys or you sell, whether you gain or you lose, these blood sucking brokers gain out of it!


This is still zero sum. The money they are earning, is from those losing. If you are talking broker fees, those arent related to the stock market.


In that case, every transaction in the world is zero sum.

So, it completely depends on the point of view. From my POV, there are a few people other than the sellers/buyers who are making money out of it; and thats not just brokers, even the stock exchanges and their employees are being paid for from that measly fees they charge.
knowledge08
More and more magazines are saying that now is a great opportunity to buy stock and shares because the rates are just so low and they are bound to increase. Really?
ddoonie
knowledge08 wrote:
More and more magazines are saying that now is a great opportunity to buy stock and shares because the rates are just so low and they are bound to increase. Really?


Sure they will increase, but in what time frame? Speaking in generalities, it doesnt matter what you do in the market. You can go long or short, you can flip a coin, all that matters is when you exit your position. You are usually right at some point in your trade, unless it's rimm (or a stock tanking based on crucial news).

So, yes it (stock market) will increase, but maybe in 1 month, maybe in 6 months, no one knows. Can anyone say when oil will stop hitting new record highs?

The stock market is full of uncertainties. If all these analysts, and advisors could accurately predict what was going to happen, they would be trading, not analyzing and advising...
Chris24
The only thing I would invest in the market right now would be shares of UPS stock. Their stock has dropped ten dollars over the recent weeks. To a years low $59 and change. The reason I would opt to buy this stock is that this company is going nowhere. They have been in business for over 100 years, they have diversified there material and services to the point where no one single action can cripple this company.

In time their stick will rise back to normal, thus making me a nice chunk of change. The large rop was due in part to their previous quarterly earnings post.
evilryu530
you have to build your stocks investing mentality and philosophy. what kind of ivnestor are you? risky or conservative? stocks is basically high tech gambling. no one can really predict 100% what a stock will do. a lot of people have the inside scoop on information. a lot of successful investors read and live and breathe stocks news and world daily. i suggest reading investopedia.com and getting your basics first. if you want something that is not risky, go with a high-yield savings or government bonds.....
the-guide
Stocks investing same as Gold trading, Oil trading and Forex trading are high tech gambling like "evilryu530" mentioned, all are very high risk investing. No one can really predict 100% how about them in future.
justtj
In India our Sensex is not much stable..
specially now a days when the price of Oil is sky high...
the overall sentiments of market are quite sensitive..

today morning was watching bussiness news when a viewer called to ask "can you please tell me some safe investment option in mid-caps"

and the host of show replied that there is no such thing s safe in stock market Smile
justtj
knowledge08 wrote:
More and more magazines are saying that now is a great opportunity to buy stock and shares because the rates are just so low and they are bound to increase. Really?



not really Smile
haven't you heard abt firms closing down and going bankrupt Very Happy
this also happens when the stock keeps declining..
Satori
The safety of your investments depends on many factors. One of the biggest is timeframe. Over the long term (10+ years) the stock market is actually quite safe. Many investments in major companies return some sort of gain over the years. How much gain is really the question. But if you're looking to make quick money, you're just as well to head over to the casino. There are few, if any, opportunities to be "safe" while making a lot of money over a short period of time. It's all about risk mitigation. One of my best investments was in Nintendo back in June of '07. I was relatively sure the companies value would only continue to increase, and I was right. But it was still a risk...just not a large risk. If I had known even better, I would've invested in Nintendo *before* the Wii came out, but anyone can look back and say "oh I should've done this, or I should've done that." Hindsight is easy, foresight is not.

Your best bet is to do all the research you possibly can on a company and watch it's stock price daily until you see what looks like a good opportunity to you. There will be trial and error...you're likely to make some money and to lose some money, but you can hope that you learn enough to tip the scales in favor of making money over losing money. Diversify! Don't put all your money on one stock. That's like betting all your money on single hand in blackjack. This will mitigate risk, and therefore losses, because you WILL lose SOME money. How much you lose, compared to how much you make is a combination of your research, your effort, your ability to spot an opportunity, your ability to mitigate risk, etc. So many factors out of your control, so do your best to be on top of the ones you can control.
Guelila
justtj wrote:
knowledge08 wrote:
More and more magazines are saying that now is a great opportunity to buy stock and shares because the rates are just so low and they are bound to increase. Really?



not really Smile
haven't you heard abt firms closing down and going bankrupt Very Happy
this also happens when the stock keeps declining..

True that
A friend of mine bought a few shares of a pharmaceutical company, and the company went bankrupt a week later.
He lost some five digit number worth of money because the stock price plummeted
adoreyourself
Quote:
How safe is it to invest in the stock Market...


Not safe, given the questions you are asking here..

Quote:
Are there any rules to follow before investing in a company...


There are various rules that people follow, e.g. technical, fundamental, momentum trading


Quote:
How does the price of shares work... I mean how can the price fluctuate so much everyday.. On what basis are the calculations made.. I see the stocks of some companies swinging by 4-5% everyday.. does it mean that the company is doing so well that its value increases by the day.. and when a stock falls is it the indication of the company doing badly... Any views and answers on these question ?


Price is dictated by the market, there is a BID and an ASK - i.e. what Market Makers (MM's) will BUY the stock for vs what MM's will SELL the stock for - last price paid is the price of the shares you will see.

Long term markets will recover in my opinion, but there will be plenty of volatility in the mean time, never invest what you can't afford to lose.. and don't invest if you are easily worried about losing it all.. trading / investing in shares is not for the faint hearted.. hope this helps a little
jessic007
Not safe at all. I just made money by switching to Geiko. Nah, j/k, but if you really want to money on the stock market, it would be a good idea to invest in a company that is just starting versus a huge company such as Microsoft.
Satori
jessic007 wrote:
Not safe at all. I just made money by switching to Geiko. Nah, j/k, but if you really want to money on the stock market, it would be a good idea to invest in a company that is just starting versus a huge company such as Microsoft.


Bad advice!

Investing in a new company carries a lot more risk than investing in a solid, well run company. The best way to make money in the stock market is to use it as a tool for long term gains, and to not try to make a lot of money quickly. You're much less likely to have favorable results through day trading. Do your research and invest for the long term and in the end you have a much better chance of making a profit.
eekieskywalker
It's like the God gave, the God takes away...

in Mr Buffet's words: do not care the short time profit. choose companies by it's basic value
La_ruso
Id hate to break it to every1 but things are going to get real tricky.

The markets are now geared on debt as opposed to the growth generated by exporting. Long story short, we borrowed too much which made our economy grow at a fast rate and the States repackaged that debt and re-sold it to everyone meaning that most countries like the UK have become pegged to the States.

That is why everyone is abandoning the dollar. The debt that they have is worthless..... like a donkey carrying zeros it is present on the books but now needs to be written off. Unfortunately, now the value of the pound and dollar is weaker relative to veryone else in the developing countries its time to tighten the belt because now the developing countries want more dollars for their grain and oil to compensate for the extra risk of a possible devalueing of the currency.

Now commodities talk!! we're swinging towards the barter end of trade so that you will have to start exporting physical goods instead of financial packages.
piygoy
Hi,
If you want to invest, start with mutual fund with an expert's guidance.
smasha
If you buy in now while the market is low you can't go far wrong. Invest in about 10 stocks or an index.
friuser
I have to agree with the person who says stocks are not safe. They are not safe at all especially during a depression/recession. I don't think it is wise that you believe financial advisers or tv personalities on the stock market on how they still get about an 8 percent return historically and all that stuff because they themselves are vested in having people in the stock markets.

People seem to forget that in the beginning before the stock market was regulated the person in charge of the stock market said there was no need to be regulated only to be caught and jailed for doing illegal things. Look into the present and you can see the numerous cases of fraud and a few bailouts.

If you are filthy rich you can expect the government to protect you. If you are the common investor than you will most likely be a victim to bad investing and stock manipulations before the government will help you. Not to say you shouldn't invest but it's not safe at all.
Snizneth
Also agree that stocks aren't very safe right now. In general, stocks don't really benefit the little guy. Assuming you don't have hundreds of thousands to invest...you're a little guy. Stocks are a measure of market peception, not actual stability.
Silk2008
Well I've been asking that myself lately. I found a neat site that allows you "pretend" trade and see how you do. I highly recommend that you check out this site a put your theories to test. It's a great way to see how good, or bad, you are without risk. They even have public contests that you can enter and compete against others. http://www.howthemarketworks.com/

Just for the record, I suck! Glad I decided to try this first rather than going straight into live trading. I would have lost my........
Socioed
Not safe at all. However if you don't have any money in it, now's the time to fill her up. Unless you think the whole US economy will crash and destroy the government.
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