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Deciding Which Stocks To Invest In

When looking into which stocks to invest in, it is important to decide whether you want to pursue a high-risk or low-risk strategy of investing for beginners. High-risk investments are typically stocks that are not well-founded and may dramatically change in just a short period of time. Low-risk investments would be buying stocks in companies that typically show only small increases or decreases in their stocks over a long period of time, therefore maintaining more security in protecting your investment. In this article, we will focus on the high-risk investment strategy, in which it would be possible for one who buys and sells stocks to make a considerable gain in a short amount of time.

While it is possible when investing to make profit quickly, investors should always remember that high-risk strategies usually come with a similar chance of loss as they do gain. It is most commonly advised not to invest a large sum of money into these stocks without prior investment experience or consulting with an financial advisor. If starting on your own taking an “investing for beginners” outlook, begin with a small sum of money to test the waters and see how well your choices perform. There are many ways to go about selecting stocks that have a high quick-gain potential.

It could be a company that offers a product or service that is currently not utilized, but will be heavily utilized in the future. For example, stem-cell companies may shoot up in value if the use of stem-cells becomes more widespread and legalized throughout the country. Medical companies offering vaccines, such as GeoVax Labs, could also see a significant increase in their stocks if the current vaccine trials prove successful and they begin marketing the vaccine to distributors and the general public.

Also look for technology that may be pertinent in the future. These new devices or machines (if the companies making them prove successful) could soar once widespread use is common. In additional to looking at products that could go mainstream, you can also check on companies that may be rebounding from a serious fall. Many financial companies fell severely during the beginning of the recent downfall of the economy, and now some have been able to regain a respectable value for their stock again. Though these companies were high-risk because of the potential of the companies collapsing (going bankrupt), those who have made a strong rebound have certainly made an amazing return for those who invested when the stocks would have been at an all time low. These opportunities come about consistently during a business scandal, E. Coli scare, faulty equipment or product production, etc., and if you make a smart investment in a company that is able to pull itself out of a troubled time, you can find your wallet growing bigger and bigger by the day.

All in all, you must do your homework and weigh the options in order to decide an investment strategy that is right for you. Many people choose to buy a mixture of high-risk and low-risk stocks in order to take a chance for quick gain while still maintaining the security of their money in the safer stocks. Do not feel that you have to rush into an investment – you may wait for three or four months… or longer… until you find the right stock at the right price and make your move. Whatever you do, always make sure not to walk in to an investment without knowledge, as you will only be putting yourself in a position that would greatly increase your chance of failure.

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Trading With TD Ameritrade

Over the past year I’ve been getting a lot of investors and traders asking me what online discount broker do I use to buy stocks online. I’ve mention it in past posts, but I guess I should give a more of a clear answer to why I use TD Ameritrade.

I’ve been trading stocks for many years and over those years I’ve used different online brokers. I started with E-Trade which is a good site, but I wasn’t too happy with their customer service as well ad their fees. Of course that was many years ago and they have changed since then. I then moved to TD Ameritrade after it was recommended to me by a good friend who was using them and loved the service he was getting from them. It’s now been several years since I went to TD Ameritrade and I will never go to another broker no matter how much they want to give to me.

When I started with them, they were called TD Waterhouse. Their prices were competitive with their competitors, but their customer service was so much better than anyone else. After a short time of trading stocks with them, I called them up to discuss a few courses they were offering to their clients. When I asked the representative about why I shouldn’t go to another online broker since they keep sending me offers to join them at lower rates than what TD Ameritrade was charging, she asked if I could hold on for a moment to look into something. When she came back on the line, she informed me that she will be lowering my fees per transaction to what I was being offered by the others. The funny thing was that I wasn’t looking for her to do so since I felt that the quality of service they provided me with justified the fee I was being charged.

As for TD Ameritrade’s other services. they have a large selection of courses for their clients can take to improve their trades. Courses that will explain different trading techniques and so forth. These courses are free to any and all clients. They also offer consultations with one of their many representatives, also at no charge. The research they do for their clients is far beyond any other online broker that I’ve used in the past.

A little over a year ago they teamed up with SinkorSwim.com to increase the programs they offer to their clients. Sink or Swim is awesome for those who need to learn more about trading stocks or if you’re looking for some great investment tips. The seasoned investor and trader will also benefit from the program as well.

I don’t know who you are using to make your trades, but I will say that TD Ameritrade is the on stop for all you online stock market trades. No matter what trading style you use or how often you make a trade, they have everything you’ll ever need in an online discount broker.

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Buying Dividend Paying Stocks

The following is a guest post written by one of our readers and friends, Bryan Postern.

There are many advantages to investing in dividend stocks. Most dividend paying stocks outperform those that do not pay dividends in both the short and the long term. Besides the obvious advantage of getting better returns over time, there are several “hidden advantages” to investing in dividend paying companies.

An investor focused on putting his or her money into top dividend stocks needs to do a sufficient amount of research. They should make sure that the company is profitable, that the dividend yield is significant [over 2%], that the dividend has been increased over time, and that the company is poised to grow and become more profitable each and every year. After the initial purchase however, things should be on autopilot for the most part.

Dividend investing is not about trading and trying to make a quick buck; it is about buying and holding for as long as you can. You should still monitor your investments and make sure that the companies you are investing in are still doing well, but the work involved in dividend investing does not even compare to other types of investing. When you are investing in dividend paying companies and you plan on buying and holding for the long term, you only need to be correct once, in which company/companies you buy. When you are trading or at least more active in trading, you need to be right three different times to be profitable. You need to be correct in your assumptions of what company to buy, when to buy it, and when to sell it. I do not know about you but it is hard enough for me to be correct once, let alone three different times. If professionals have a hard time profiting from rapidly buying and selling companies with little rhyme or reason, what makes you think that you would be successful in doing so? Warren Buffet did not make 40+ billion dollars from investing in companies he knew little about and then quickly selling them. Buffet buys a stake in a company and expects to hold the company for decades, not days, weeks, months, or even years.

There are less low points in dividend investing. This is a documented fact. You will not completely avoid recessions, depressions, or simple downturns in the market by investing in dividend paying companies, but you will experience higher and less “lows”. Dividend paying companies are much more stable then companies that do not pay out dividends for several reasons. Dividend paying companies tend to be profitable and they tend to trade at lower valuations. Also investors do not put their money into dividend paying companies with the intention of selling the next day, they buy and hold these companies for the most part.

There is simply much less risk involved in dividend investing. Not only will you get better returns in the long run, your portfolio will be more stable and you will not have to do nearly as much work. It’s a no brainer

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