The basics of stock trading

First of all, the stock market is almost gambling. Almost. When you put money in, know damn well you could lose all of it. There are safe investments, somewhat safe investments, and risky investments.

The good thing about the stock market is, if you stay in long enough, with enough stocks you are basically guaranteed to make money. The problem in my eyes is too many people are too impatient.

Let’s start with safe investments. You can do a large index fund like VTI, or just hand your money to Vanguard for one of their mutual funds. Funds like these can get you 5% to 10% a year on your money. But in a collapse like 2008 you can still lose a little money or only make a gain of something like 1%. Still a safe, and great long term investment in my opinion.

Then you have somewhat safe investments. Stocks that trade around $20 to $50 a share, different tech and pharma companies. Etc. If you do your research these can be a good buy. You can possibly double your money in a year, or the stock could tank and you could lose most of it. These stocks need monitoring and regular research

Then you have high risk (but also high reward stocks). These are stocks that can trade anywhere from 1 penny to 3 or 4 dollars a share. The beauty of these stocks is that if you get lucky with a big breakout stock you could have something go from a dollar to 8 dollars in just a few days. A few hundred could easily turn into thousands. But the huge breakout stocks are rare and despite what the clowns on the web say, no one can really predict them. When you put money into a penny stock, be well aware there is a good chance that money disappears overnight.

I put about 70% of my money in safe stuff, 20% into somewhat safe stuff and 10% into pure penny stock gambles.

So who do you trade with? Well you can open up an account with Robinhood and trade for free. Or use one of the more reputable online companies and pay $5 to $10 per trade.

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