How to Invest in Stocks

Learning How to Invest in Stocks 101

Regardless of how many Wall Street films you have seen in the past, stocks and shares is not an easy topic. Those who are searching online for resources on how to invest in stocks for beginners or with little money thinking that they will “certainly” become the next overnight millionaires should, first and foremost, receive a word of warning: Yes, some people can really get rich overnight playing with shares at the stock exchange market; however, but that happens once a blue moon. Every person willing to dip a toe in the world of stocks investment should, at the very least, get prepared first and —as if you were playing chess— think his moves twice beforehand to prevent regrets after.

That being said… How to invest in stocks?

First Things First: Get Informed

Stock Profit Calculator

Stock Profit Calculator That Allows You To See Different Scenarios

Before spending one penny in a stock market, the first thing you should do is to get informed. Let’s ask a few questions so you can ask yourself if you know the answers:

  • Do you know what a stock is, and how they are currently stored?
  • How many kinds of shares are there, and which of them you can buy?
  • Do you know what a stock broker is? Have you found any for yourself already?
  • Lastly, have you spoken with your accountant about the financial and tax consequences (if any) of becoming a stock investor?

If you do not know the answer to any of these questions, then please let me suggest you the following readings:

  • Investing articles on stocks and the stock market could be a reasonable starting point.
  • The Beginners’ Guide to Investing, by the American Securities and Exchange Commission can provide you a more specific introduction to the topic.
  • Investor’s glossary page can help you clear your doubts.
  • Lists of stock brokers such as this one by Nasdaq can help you find a reputable stock trader for your assets.

Learning How to Invest in Stocks

Next, choose how you will invest in stocks

Once you have covered the basics and feel better informed to start investing, you need to find out a way to do it suitable for yourself and for your money.  There are many options and approaches for this, yet, for beginners, I like to keep things simple. Remember the goal is to make money, and that you have basically two ways to get it with stocks:

  • You either buy stocks to resell them after a short time.
  • You buy stocks to expect a profit sharing payment or resell them after a longer term.

In both cases, your goal will be to make more money from what you invested, a profit.

What are the best stocks to invest in?

The best stocks are on companies or markets you understand, so this answer will depend strongly in your background. Let’s try to make it clear with an example, anyway:

Let’s say someone offers us stocks from an ice-cream company… would you buy them? An uninformed person may go buy them just because “heard” those shares are “about to go up”, and that “it is the exact moment to buy them.” Someone who understands the ice-cream market, however, would pause for a moment and think: Ice-creams are mainly sold in summer. During the winter, their demand falls down. The wisest move would be to buy the stocks in winter, when demand is low and prices go down; and to sell them in spring or at the beginning of summer, when demand goes up and so do prices.

After learning how to invest in stocks, remember knowing the market you are about to invest in will help you get a better understanding of when to buy or sell your stocks.

Certainly, your stock broker should advise you about your investments too.

Financial Management Basics

Proper financial management is arguably the most important skill any business or individual must master in order to be successful in the short term and long term. Anyone responsible for managing their business resources, from freelancers and full time traders to multinational corporations and small businesses, will not last long unless they learn to strategically control optimize their business finances. For individuals looking to create long-term wealth, the same is also true.

What is financial management?

Financial management is more or less what it sounds like: managing your finances. This involves controlling every stage that your financial resources pass through. Financial management therefore includes planning, raising, organizing, controlling, administering and monitoring capital and other financial resources in order to meet the objectives of the business, organization or individual, in the case of personal financial management.

With good financial management procedures in place, your business will be able to use its financial resources effectively and efficiently towards short-term and long-term goals, ensure long-term financial stability and sustainability, and gain an edge over your competitors in the same niche.

Basic elements of financial management

Proper financial management can be loosely broken down into these four basic elements:

  • Financial strategy
  • Revenue plan
  • Financial management system
  • Internal financial management environment

Developing a good financial strategy

Your financial strategy is basically a highly specific plan to get you and/or your business from where you are now to where you want to be. A good financial strategy must realistically examine your current financial situation and any relevant factors influencing that situation; otherwise, you will have no way of knowing what needs to be done to reach your objectives.

Speaking of objectives, you also must have clearly defined goals for the short term and the long term. Without a specific and well-articulated idea of where you want your business to be, and over what time-frame, you won’t be able to create a successful plan to get you there.

“How to get you there” can be fleshed out in the second element, your revenue plan. But it also must involve considerations like the potential risks your business will face, and how you will deal with those risks, as well as how to balance your need to continually spend and reinvest in your business with the very real need to have a savings plan.

Creating a solid revenue plan

Hopefully you already have at least a vague idea of how you plan to generate income. This will be vastly different for everyone depending on the field of their particular business or organization. The point is, without income, your business can’t grow, and you will have an easier time bringing in that revenue if you have a plan of action ahead of time.

Basics of financial management systems

Like your revenue plan, your financial management system will depend on your particular business or organization, but there are a few principles that are universally important for a successful financial management system, including consistency, accountability, integrity, and good record keeping.

A good financial management system will help take some of the guesswork out of decisions that involve how to best use your (often limited) resources. It involves tangible things like creating reasonable budgets and deciding where to allocate your capital, and also more abstract concepts like reflecting on whether the system makes it easier to make these decisions effectively, keeping your business’ financial goals in mind and putting them in the context of your financial management system.

Create an effective internal environment for financial management

Lastly you need to determine the various roles and responsibilities that are needed to effectively and consistently implement your financial management system, who will be responsible for each of these tasks, and how they will work cohesively towards the business’ common goals.

Fidelity Active Trader Pro

Fidelity Active Trader Pro

Understanding how to use the Fidelity Active Trader Pro will make your life so much easier.  On top of that, you’ll be able to quickly find what you’re looking for.

Start Forex Trading Without An Investment

Start Forex Trading Without Investment & Day Trading Forex

Forex is an acronym of Foreign Exchange, and Forex Trading is the global business of trading of currencies from various countries against each other. The foreign exchange market also known as FX, currency market or Forex. All of the larger international banks are major participants in Forex trading.  So, is it really possible to start Forex trading without investment?  What about Day Trading Forex?  The answer to both of these is yes you can!

Typically Forex trading is performed by the brokers, in this business you have right to choose the currency pair that you expect to change in the value and trade accordingly. As a Forex trader, you have to place an order through broker then the broker passes the order to their partner in the Interbank Market and fills your place. In case, you close the trade the broker closes your position with the loss or profit during the trade.

Start Forex Trading Business? Why Should I?

No matter what is your actual business you can do it from home as part-time, if you know how to do business and survive in the market, start by day trading Forex. It requires practice and knowledge of different markets you want to work with.

Day Trading Forex is Easy With a 24-Hour Market

As a Forex trader, you can choose your own hours to work from the morning in Australia till the night in the United States. The Forex market never sleeps, so you can join Forex trading as a part-time business, but you must have some amount to invest. You can find your peak hours to do Forex trade according to your regional time.  Find out how to combat inflation!

Low transaction costs

The physical Forex markets require large amounts to invest to survive in the market, on the other hand, online Forex trading doesn’t require anything like this. You can make transaction cost under 0.1% under standard market circumstances, and the larger markets can bid as low as 0.07%, so it depends on your investment in this market.

No commissions

As a Forex trader, you don’t need to bear expenses like brokerage fees, exchange fees or government

Stock Profit Calculator

Stock Profit Calculator That Allows You To See Different Scenarios

fees. Most of the retail brokers compensate for their services, so they don’t require you the commission.

Just like other businesses, day trading Forex also has scammers who are just like a black sheep in this field.

Before you start Forex trading, you need to avoid them, following tips helps you to avoid from Forex scam or fraud.

Google the product and research for it: If you see a new product that offers high-profit, search about it in Google, for example: write “product name scam” if the results yield with too many results don’t go with it.

If it looks too good: Websites that offers high-profit, keep in mind there’s no easy money in this market.

Scamming websites usually have one page with big/blinking $ sign and serious explanations.

Demo account: As a beginner you need to care for the demo accounts. You must ask from the people who have experienced the field to start a demo account.

Check the people on LinkedIn: LinkedIn is the world’s largest professional network with a wide audience. People who looks new to the Forex and from whom you might have scam risk then they can be searched out on LinkedIn. By checking their linked profiles you will know that whether they are trusted or not.

The Potential Value In Fitbit Inc

My Current Position In Fitbit Inc.

I’ve been watching Fitbit Inc (symbol: FIT) over the last couple of years.  During that time I’ve bought and sold shares of Fitbit here and there.  During August of 2017 I began getting more serious and started purchasing shares fairly regularly.  As of January 30th, 2018 I currently own 7,630 shares of Fitbit.  With 1,930 in retirement accounts and the remaining 5,700 in my personal brokerage account.  I have just $40k invested in Fitbit. with their current share price of $5.22.  I’m currently averaging a cost basis per a share of $6.11 (I’m down just around $6,800).  I plan to add an additional $5k over the next month to put my total original investment just above $50k.

Stock Profit Calculator

Stock Profit Calculator That Allows You To See Different Scenarios

Current Financial Situation of Fitbit, Inc.

There were a few things to call about about the latest earnings report for the fiscal Q3 ending on September 30th, 2017.

Highlights From Fitbit’s Q3 FY17 Financial Report

  • $659 million in cash, with current assets totaling $1.23 billion
  • $564 million in current liabilities
  • $392 million in revenue, with $174 million and -$27 million in gross profit and operating income respectively
  • -$113 million in net income
  • Operating cash flow was $5.5 million, net change in cash for Q3 FY17 was -$38 million.

There’s a few important things to call out from Fitbit’s Q3 FY17 Financial Report

  1. Has a very strong cash position, with operating cash flow remaining positive.
  2. R&D spend remained at $84 million contributing to the lower net income

The Long Term Strategy Of Fitbit

If Fitbit is able to enter into the healthcare side of things.  I believe there is a lot of potential for this company.  During FY18 I’ll be looking for YoY sales increases and their plan for expanding their services.  I still believe that Fitbit is undervalue at it’s current price.  With the market cap just under $1.3 billion, this company has a lot of room to go, if they can prove to the market their value.

What Do Investment Bankers Do

What Do Investment Bankers Do?

So, what do investment bankers do exactly?  The simplest explanation is that investment bankers are the world’s deal makers, usually acting as a type of broker. Basically, they match projects with money. Investment Bankers find projects, analyze them, cherry-pick the best, then structure them as investments and, lastly, find the investors (or in the case of an in-house investment banker present the project to the firm’s investment committee.) Most investment bankers will review over one hundred projects per year and eventually reject 99% of them. It’s a really difficult job. A great investment banker is literally worth more than his or her weight in gold. There are few great investment bankers… and even fewer after the 2008 financial crisis.

My Background In Investment Banking

To better understand what do investment bankers do I’m going to provide my background.  I have been an investment banker for the past thirty-eight years. I started at the ripe old age of eighteen with the purchase and syndication of two apartment buildings in Northern California, then went on to start one of the first video store chains in the United States. On my first group of syndications, I tripled my investors’ money within three years. Honestly, it was luck and timing.

Somewhere along the line, I developed a reputation and I managed to pick up hundreds of clients that I helped raise money for and manage their investor relations. Some of those clients you

Stock Profit Calculator

Quickly find your profits/loss with our Stock Profit Calculator

might recognize: IBM, AT&T, Chevron, ADP, FMC, Motorola, Lockheed Martin, Intel, State Farm, Allstate, and 19 other Fortune 500 companies. I have personally syndicated over 100 investments in my career and helped raise billions of dollars in equity for my clients.

 

I also worked in the entertainment industry writing, directing and executive producing motion pictures. There are 7 motion pictures based on my screenplays, two of which I also directed. I personally invested in or helped finance over 100 independent movies and I founded several successful media services companies in Southern California. Those are my credentials.

I have had my ups and downs–2008 was particularly tough–but I have survived and even prospered. Over the years, I have learned a few secrets about investing that I would like to share with you. If you are not already wealthy, I hope this information makes you become wealthy… like REALLY WEALTHY!

And if you are lucky enough to already be in the top 1%, then I hope this information helps you stay there and sleep better at night knowing your nest egg is safe.

They Usually Specialize

Investment bankers usually specialize in industry sectors such as energy, real estate, technology, consumer goods, minerals, communications, transportation, media, etc. They also specialize in the types of deals that they put together. Some work in mergers and acquisitions (M&A), while other develop IPOs. Many work in equity placement or financing. Some investment bankers specialize in financing startups and growing companies, while others only handle mature companies. Still others stay away from corporate finance and instead specialize in project financing (my personal favorite) like commercial real estate development or acquisition financing.

Their Education

To answer What do investment bankers do?  We need to understand more about their education. Most investment bankers start off graduating from a prestigious university, then working for a number of years at one of the big investment banks; Goldman Sachs, , Morgan Stanley, JP Morgan, Deutsche Bank, Credit Suisse, etc. Once they gain their confidence and develop their contacts many leave to launch their own firms and develop their own projects. Some end up running investment funds, while others remain independent putting deals together for sponsors in need of capital.

Those Rolodexes

Investment bankers keep massive Rolodexes or databases of investor contacts. My personal database has over 8,000 investor contacts all of which have over $100 million in assets. Investment bankers are similar to sports or entertainment agent in that their power comes from who they know and who will take their call on short notice.

Keen Eyes

An investment banker must always understand current capital market conditions, so they know which projects will get funded and which are a waste of time. They must have a keen eye and are always on the lookout for quality projects and sponsors. An investment banker must know how to structure an investment deal so that it is marketable to investors, while still leaving enough meat on the bone to incentivize the performance of the investment sponsor.

Now you should be able to answer what do investment bankers do!  Most successful investments over $10 million have an investment banker behind them. The new arena for investment bankers is crowdfunding. It is the ultimate free market system for raising capital and very well could change the way American business are financed. But more about that in posts to follow….