The reality is that in the modern world - especially with the power of the internet - there is very little information that is not in the public domain somewhere. However, the world now has information overload. Whilst the information might be available, few people now have the time to find or understand it. The people who know these things and can 'join the dots' have regular opportunities for stock market investment.
The use of borrowed money “levers” or exaggerates the result of price movement. Suppose the stock moves to $200 a share and you sell it. If you had used your own money exclusively, your return would be 100% on your investment [($20,000 -$10,000)/$10,000]. If you had borrowed $5,000 to buy the stock and sold at $200 per share, your return would be 300 % [(20,000-$5,000)/$5,000] after repaying the $5,000 loan and excluding the cost of interest paid to the broker.
In contrast, professional fund managers (information here) do not want tips. They have dozens of good ideas of their own. They won't be sharing those ideas with you and they will not be expecting you to share yours. Instead, they ask about how you allocate money. "Which sectors and markets do you like and why?" The difference between these approaches is like night and day.
B (Good) - The stock has a good track record for balancing performance with risk. Compared to other stocks, it has achieved above-average returns given the level of risk in its underlying investments. While the risk-adjusted performance of any stock is subject to change, we believe that this fund has proven to be a good investment in the recent past.
The first stock market in the world was the London stock exchange. It was started in a coffeehouse, where traders used to meet to exchange shares, in 1773. The first stock exchange in the United States of America was started in Philadelphia in 1790. The Buttonwood agreement, so named because it was signed under a buttonwood tree, marked the beginnings of New York's Wall Street in 1792. The agreement was signed by 24 traders and was the first American organization of its kind to trade in securities. The traders renamed their venture as New York Stock and Exchange Board in 1817. (For related reading, see "The Highest Priced Stocks In America")
While some people do buy winning tickets or a common stock that quadruples or more in a year, it is extremely unlikely, since relying upon luck is an investment strategy that only the foolish or most desperate would choose to follow. In our quest for success, we often overlook the most powerful tools available to us: time and the magic of compounding interest. Investing regularly, avoiding unnecessary financial risk, and letting your money work for you over a period of years and decades is a certain way to amass significant assets.
In most cases, your broker will charge a commission every time that you trade stock, either through buying or selling. Trading fees range from the low end of $2 per trade but can be as high as $10 for some discount brokers. Some brokers charge no trade commissions at all, but they make up for it in other ways. There are no charitable organizations running brokerage services.
In the professional world, one of the key concepts is diversification. Harry Markowitz is a Nobel prize winning economist and one of his major discoveries was that adding new asset classes can dramatically alter the overall risk profile of a portfolio. His finding was that a portfolio that contained very low risk assets would normally benefit from lower volatility and higher returns if a higher risk asset was added. This is due to the likely lack of correlation between high and low risk asset classes.
Before making your first investment, take the time to learn the basics about the stock market and the individual securities composing the market. There is an old adage: It is not a stock market, but a market of stocks. Unless you are purchasing an exchange traded fund (ETF), your focus will be upon individual securities, rather than the market as a whole. There are few times when every stock moves in the same direction; even when the averages fall by 100 points or more, the securities of some companies will go higher in price.
Dollar-cost average: This sounds complicated, but it’s not. Dollar-cost averaging means investing a set amount of money at regular intervals, such as once per week or month. That set amount buys more shares when the stock price goes down and fewer shares when it rises, but overall, it evens out the average price you pay. Some online brokerage firms let investors set up an automated investing schedule.