How to make money in stocks quora

It is a question that would be incredulous, if only it wasn’t so commonly asked. Traders are dabbling in the stock market with expectations — and asking questions to stcoks effect — that would nearly be mathematically impossible to realise. A seemingly innocuous query for those not very well versed with the concept of returns and compounding. For those who are, a 6 percent profit every day, compounded socks with profits reinvested for a year would mean Rs 10, would grow into Rs 3, crore. This is not counting weekends, on which markets are closed. Do the math. Options are high-risk, high-return financial instruments that allow a trader to speculate on an underlying asset’s price movement. As with all things in the market, however, there is no sure-shot way to be certain that all your bets pay off, even with a «straddle» option strategy outlined by the user, which monney a trader’s potential loss. A third user advises watching stock tips on a business news channel, through which one could earn » percent mwke. Others advised caution, with one user rightly pointing out that if such returns were possible, a trader could grow his capital to thousands of crores. Stock prices tend to be volatile, with the best-performing stocks rising as much as 20 percent in a single day, sometimes. This could sway trader’s emotional biases, making them believe it is possible to consistently pick stocks that are performing well, ignoring the long odds they face there are thousands of stocks trading on the exchange and hundreds quorq offer derivative contracts.

How to Make Money in Stocks

Which is the best way to learn about stocks? Answer by James Altucher , Author, entrepreneur, podcaster, wall street investor, on Quora :. And I wanted to maybe learn what I did wrong so I could start thinking how to make it back. I was a gambler at heart. I went from playing poker every day to playing the stock market every day. That’s mistake 1. I had to end that habit. I hope I did. But I did learn. Although I wish I had been smarter about learning. I wish I had read all of these books I’m about to recommend. Now I’ve read them.

To make money investing in stocks, stay invested

Some of them are inspirational. Some are educational. Some are about famous investors. Some are by famous investors sharing what they’ve learned. Anyone who reads all of these books will understand the stock market and investing at a very deep level. Warren Buffett has his famous two rules about investing.

When you own a stock, you own part of a company. So study what makes a good company.

Unfortunately so do a lot of market participants. The apparent simplicity of the answer hides sophisticated concepts that can be broken down in two part: statistical and psychological trading edge. Most market participants believe that stock picking is the alpha and omega of alpha generation. Stock picking is merely everything that precedes entry. It excludes bet size and exit.

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We want to hear from you and encourage a lively discussion among our users. About the authors. Occasionally, during market bubbles, you may have the opportunity to make a profit by selling your stock to someone else for more than the company is worth. The offers that appear in this table are from partnerships from which Investopedia receives compensation. In other words, when you buy a share of Harrison Mkney Company, you are buying the right to your share of the company’s profits. Compare Investment Accounts. The company can send you a cash dividend for some portion tl the entirety of your profit. How to make money in stocks quora can reinvest the funds generated from selling stock into future growth by building more factories and stores, hiring more employees, increasing advertising, or any number of additional capital expenditures that are expected to increase profits. InQuora joined the startup accelerator Y Combinator. Investing involves risk including the possible loss of principal.

The eighth wonder of the world is compound interest.

Nothing could be further from the truth. Investors today commonly refer to Graham’s strategy as «buying and holding. This means that at an absolute minimum, expect to hold each new position for five years provided you’ve selected well-run companies with strong finances and a history of shareholder-friendly management practices.

As an example, you can view four popular stocks below to see how their prices increased over five years. Other everyday investors have followed in their footsteps, taking small amounts of money and investing it for the long term to amass tremendous wealth.

Here are two noteworthy examples:. Still, many new investors don’t understand the actual mechanics behind making money from stocks, where the wealth actually comes from, or how the entire process works. The following will walk you through a simplified version of how the whole picture fits. When you buy a share of stockyou are buying a piece of a company. In other words, when you buy a share of Harrison Fudge Company, you are buying the right to your share of the company’s profits.

If you thought that a new management team could cause fudge sales to explode so that your share of profits would be 5x higher in a few years, then this would be an extremely attractive investment. Instead, management and the Board of Directors have a few options available to them, which will determine the success of your holdings to a large degree:. Which strategy is best for you as an owner depends entirely on the rate of return management can earn by reinvesting your money. If you have a phenomenal business—think Microsoft or Wal-Mart in the early days when they were both a tiny fraction of their current size—paying out any cash dividend is likely to be a mistake because those funds could be reinvested into the company and contribute to a higher growth rate.

During the first decade after Wal-Mart went public, there were times in which it earned more than a 60 percent return on shareholder equity. Those kinds of returns typically only exist in fairy tales yet, under the direction of Sam Walton, the Bentonville-based retailer was able to pull it off and make a lot of associates, truck drivers, and outside shareholders rich in the process.

Berkshire Hathaway pays out no cash dividends while U. Bancorp has resolved to return more than 80 percent of capital to shareholders in the form of dividends and stock buybacks each year. Despite these differences, they both have the potential to be very attractive holdings at the right price and particularly if you pay attention to asset placement provided they trade at the right price; e.

Occasionally, during market bubbles, you may have the opportunity to make a profit by selling your stock to someone else for more than the company is worth. The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors.

Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. Investing for Beginners Basics.

By Joshua Kennon. The company can send you a cash dividend for some portion or the entirety of your profit. The firm can repurchase its shares on the open market and keep them in-house. It can reinvest the funds generated from selling stock into future growth by building more factories and stores, hiring more employees, increasing advertising, or any number of additional capital expenditures that are expected to increase profits.

Sometimes, this may include seeking out acquisitions and mergers. The company can strengthen its balance sheet by reducing debt or by building up liquid assets. An increase in share price: Over the how to make money in stocks quora, this is the result of the market valuing the increased profits as a result of expansion in the business or share repurchaseswhich make each share represent greater ownership in the business.

Dividends: When earnings are paid out to you in the form of dividends, you actually receive cash via a check in the mail, a direct deposit into your brokerage accountchecking account, or savings accountor in the form of additional shares reinvested on your behalf.

Alternatively, you can donate, spend, or save up these dividends in cash. Continue Reading.

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Three excuses that keep you from making money investing

Initially, Quora had no revenue model. Based in Palo-Alto, Quora was launched in InQuora joined the startup accelerator Y Combinator. Quora’s content is entirely dependent on the community it cultivates; the community generates questions and provides the answers. Quora democratizes knowledge on a platform accessible to all, from the lay reader to Mark Cuban and Mark Zuckerberg. The answers with the most upvotes are highlighted and viewed the.

Unless you know your math, there is no end to being optimistic.

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