Has anyone made regular and decent income out of stock market ? If yes, what are the tips?
I am a college student who has a couple hundred dollars invested in the stock market. From my experience, your income depends on three primary things.
1. The stocks you invest. Basically, not all stocks have dividends. And those that DO provide the income to investors ( dividends), are highly stable companies. In other words, investing in stable companies will be reliant, but you won't see huge peaks in profit . Therefore, it is very unlikely to make a lot of money from these dividend stocks. Regular, yes. But decent? well, that depends on your skill as an investor, and many other factors too complex to discuss now. But onward to the next point.
2. The nature of industry you choose. Stocks in technology are most reliable. While the gas industry is wishy-washy and the medical industry tends to be difficult to read and unpredictable. Of course, choose the industry with which you are the most familiar. But avoid unpredictable ones, and gravitate to industries that sell computers, devices, consumer electronics, or even retail those ( like Amazon etc. ) These tech companies offer decent dividends. In the long run, they pay up.
3. Thirdly, is the knowledge that you have as an investor. I am a college student; therefore, the gains I make on my stock are small since I don't have the breadth of knowledge and experience that others do. The longer you do this, the better you will become. Stocks are situational. That's why reading books about stocks is useless--- the author might advocate a stock that is now worth zero or doesn't even exist.
What you need to do, is look for the principles and techniques that great investors use. You could obviously get lucky and invest a ton of money on the next Apple or Microsoft. But your chances are slim.
If your goal is to gain a decent income, please remember these 3 points. The third one especially. It takes time, a lot of knowledge, and practice. Look at your sector, try to read the situation, and buy or sell based on solid information.
Don't try to predict the market, as it is very unlikely you will . Instead , play it slow with the old tech companies and start buying when you think the company's products or services are showing greater than normal praise or critic reviews.This is investor hype. The media goes crazy about Company A's product Delta. Consumers love product Delta. You buy more shares of Company A, anticipating growth. Company's A stock soars.
There is a beautiful truth in most of life. If you invest your time and hard work and diligently apply yourself to the education of an activity you can do it for a living. Very difficult to do in many areas, from house painter to doctor. People who professionally write or folks in sports usually have to work very hard to make a living.
The stock market is no different. In fact it may be easier because the whole focus of the game is to make money. I traded in physical commodities for a while and lived comfortably. The problem for me was that I did not like spending everyday focused on money. For me it is better to find activity that focuses on some creativity and appreciation of things other than profit margins and be paid for actually accomplishing something.
I am a beginner at Forex, which is the currency market. I started around 3 months ago and started with $100, I got down to $9 dollars and currently up to $50. I lost money for trading with insticts instead of a plan. But now its different, and I am sure I can turn those $50 into thousands of dollars, even if I am still a rookie with much to learn.
As you can see I am still in learning mode but I have made a breakthrough, and that is I have advanced in Risk Management. By that I mean I risk $5 dollars to win $30 of even $60. So my two cents from my short experience to anyone going into trading are this:
1. Master Risk Management before anything else. The ability to not lose money is far more important than How to make thousands of dollars. If you can´t lose money then there is only one other option, to make money.
2. For beginners we live in a Social world were experienced traders share their advice for free. I follow the "Daily fx Expert Picks", they post on average 3 trades a week with excellent analysis, they tell you when to enter and when to exit, where to place stop loss (when you lose a trade) and how to risk manage your trade. So far their trades have excellent performance. There are blogs, forums etc. Find one that is reliable and that fits to your trading style, practice with mini lots while you feel comfortable.
3. The biggest thing to master in trading are your emotions. I studied Forex for 4 months before investing, but those first three months of losses taught me emotions are your biggest problem in trading, the rest is easier. Don´t waste money reading about traders psychology and such, you will learn with time and experience to control emotions. So do it with small lots to avoid burning your account.
4. Enjoy it! If you are asking this question because you want money and not because you have an itch of how the stock market works, then I suggest to trust your investment with a good broker. Like anything in life, if you have a passion for the market you will learn and become a pro. The thousands of dollars will come easily then.
Life Story: I know a trader who began with $400 and 2 years later has a $400,000 account.
I made money over the years through my 401K. I consulted with my broker, and over the years, we change the investments. Eventually, an annuity was offered by an insurance company which guaranteed I could withdraw five percent of the corpus each year, and that amount would always be equal to any prior higher amount. The money is there. The yearly withdrawal is made. It goes into my IRA and is then sent to me on a monthly basis. It also carries a death benefit which is worth more than the value of the annuity. Assuming I die before my wife, which almost a sure thing, she will receive the benefit and can either purchase another annuity like the one we have or invest elsewhere. She knows our broker, and I have typed out a plan of action to give up some guidance when my time comes. (Men in my father's family died in their 60s, and the women lived to early 70s. My wife's family lives to their high 90s. She is going to outlast me.)
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