WHERE TO GET GOOD STOCK MARKET INFORMATION

If you are a beginner just getting interested in the stock market, you need a good place to go to get quality information all in one spot. And preferably it should be free!

That is what you have with Morningstar.com which is a website where you can sign up for free and get just about all the news stories and stock information you would ever need as a beginner. They also have a premium account for about $15 a month which has a lot of added features but there is no real need for that if you are someone who is just starting out.

The Morningstar company has been around since 1984 and it is one of the all purpose investments firms on the Internet that provides a wide array of services. They are well known for their stock analysis (which you only get with the Premium account), but with the free account you get all sorts of useful things that will help you get on your feet and on your way to understanding the market.

All Your Financial News In One Place!

Morningstar is great for the stock news they put out and that is why signing up for free seems to be a no-brainer. Rather than scouring the Net everyday for your stock and business news, now you can get it all in one place. My favorite is the section they have every week which takes you directly to their most popular articles which sometimes includes videos.

If you are saving for retirement (you should be!) then Morningstar has frequent news and reports on how to better do that. Saving and growing your money in today's world is big challenge and harder than ever with interest rates so low. Having access to reliable and trustworthy news from Morningstar is great to have and most of that information is available with the free account.

Other Morninstar Features

Are you interested in tracking some of your favorite stocks? You can do that for free by creating your own portfolio and that gives you access to all the latest news for each of those stocks.

Are you a social person who wants to talk and read about what other members are saying? They have a large, active forum that comes with the fee membership where you can connect with other like minded investors.

Do you want to know what the Morningstar analysts are saying about your stocks or industries? There is an absolute ton of analysis available on the site but most of it comes with the Premium membership.

Is Morningstar Good For Beginners?

Yes it is because with all the dubious websites on the Internet today, you can rest assured that Morningstar is a reputable one. It is a great site for beginners who want to begin learning how to buy stocks. The news and information you get there will help you understand what is going on in the market and be your daily learning center. Even if you never pay mre for a Premium account, the easy access to all sorts of business and stock news will help you reduce that learning curve.

Of course Morningstar is also great for established investors as well who want stock analysis from one of the leading online investment websites.

DON'T GET YOUR STOCK PICKS FROM TEXTS!

It might seem obvious that good stock picks probably won't be found in spam. But I guess everyone wants to get in on the ground floor of a good deal and that is why this type of thing works.

Have you ever met someone who doesn't want a good stock pick? Stocks are almost like the weather: they are something people can discuss at cocktail parties, outdoor get togethers, or just about anywhere. It is a subject that is good conversation and it often is combined with people discussing the economy and how the country is doing.

A good stock pick is always welcome. It is sort of like an inside tip at the horse races and who wouldn't want that? Yes, there will always be a demand for that one stock that will be different from all the rest and turn out to be your next big winner.

That is the mentality that stock picking text spammers count on when they send a message that they have the next hot stock. There is always an urgency because this tip isn't going to last long! There service is the best (they will say) and the one stock they have for you will be going up guaranteed. Don't miss it by waiting!

Spammers have been around forever in all sorts of forms and now they have clearly moved to the texting platform. If the saying "there is a sucker born every minute" is true, don't let it be you when it comes to stock picks.

Listening to professional analysts is one thing and that always carries with it some risk. But getting taken by an anonymous text about a soon to be hot stock is clearly something even the greenest beginner shouldn't let happen.

BEST STOCK BROKER COMMERCIALS

Online stock brokers usually have pretty dull commercials but there is one company that has chosen to make their pitch a bit more interesting - E*Trade.

I don't have any statistics to be able to tell you how well these ads work but E*Trade has gone exclusively with these baby commercials since their debut during the 2008 Super Bowl. To me that surely means they must be working and I'll tell you why I think they do:

1) First of, all they are lighthearted, funny, and cute. You can't go wrong with that.
2) They make saving and investing look fun as the E*Trade baby is always upbeat and totally into his portfolio.
3) These commercials take the fear out of investing. If that baby can do it then so can you.
4) That baby and his friends are cool, hip, or whatever current day term you want to use. That makes the commercials cool and also makes E*Trade cool.

In reality, investing is a boring subject but these advertisements make it sound fun. Fast Company writes that in response to that first Super Bowl ad, E*Trade had more sign ups the next day than in any day prior in their history. These TV spots are memorable and that is good for the brand as long as people remember what the ads are selling.

E*Trade was one of the pioneers of online stock trading and they also have the most recognizable commercials on television. They also have a great trading platform which I use. Here is a video showing many of the E*Trade baby commercials that have become so popular.

PROOF THAT INVESTING IN STOCKS IS IMPORTANT

There is a news article out today that is in all the major news services detailing how the wealth gap between whites and minorities has widened in the last 25 years. I think this story is very misleading because it is all about race when the real story should be about EDUCATION: people who have access to education are doing better than those who don't. This graphic should have groups split into "education" and not "race":

This story talks about skin color, politics, and all sorts of other issues that I won't discuss further because they have nothing to do with the stock market. However, stocks were mentioned twice in the article as being one of the reasons whites are doing better than some minorities.

Apparently whites are apt to have more of their money and savings in the stock market than minorities are. They might own individual stocks, 401K's, and mutual funds that have rebounded nicely since the crash of 2008. Minorities, on the other hand, are more likely to have most of their money in real estate (their houses) where we have seen valuations NOT go back up.

Stocks are never guaranteed to do well but over time they have always outperformed all other forms of investing. Everyone should have the opportunity to invest in them. It is also true that the earlier in life you start investing, your chances of making a good lifetime return are increased. However, it is understandably hard to get interested in the stock market if you don't have any money to invest! Why would someone pick up and read a copy of Stocks For Dummies if they don't have any money, right?

If there is anything you should take away from this it is that all kinds of education are very important. The basics of the stock market and investing in stocks should be taught early on in schools if we want to raise kids that will have a chance to do well financially in life. Everyone should have access to information about the stock market and how to invest in it.

Poor people not only don't have money to invest but it is also unlikely that they have the knowledge of HOW to invest it if they if their fortunes changed. The stock market is and always will be very confusing to most people and something that is looked at as a playground for the rich. In reality though, it is anything but that.

MAKE MONEY BUYING "CLOUD" STOCKS

There is a tremendous amount of buzz about the cloud almost everywhere you turn. Apple's announcement that it is bringing iCloud to you by the end of this year has only magnified all the attention this type of technology is getting.

While cloud computing isn't new, it is ramping up in importance and it appears to be the real future going forward. It won't be long before most or all of what you do will be stored in the cloud rather than on your desktop or laptop. Whether you like it or not and whether you think your information will be safe or not, everything is going to be moving to the cloud.

Over the next 10 years, businesses everywhere are going to be investing in and making the move to the cloud. This leads investors to the question: what stocks should I buy to take advantage of this trend and what stocks are poised to make the most money?

The purest stock play on cloud computing is Salesforce.com (CRM) but by the looks of it's chart it is probably much too late to get in. Here is the chart for CRM:

One thing is clear with stocks and the stock market: you have to get in early if you want to make the big money and that means being very good at figuring out what the future holds and what companies are poised to take advantage. By the time something like "cloud computing" is all over the news, it is probably already too late to find a stock that will profit and get your money in at a low price.

There are many other companies that will make money from the cloud as they are involved one way or another. Stocks like Apple, Microsoft, EMC, Google, Amazon, IBM, and Accenture among others will be involved in the cloud and should benefit from it. They all have other products though so their stock prices are not as directly connected to the success or failure of cloud computing.

I personally own EMC and it has more than doubled in the last two years. How much of that is attributable to it's involvement with setting up equipment for the cloud I don't know, but I am glad I have the stock and don't plan to sell.

WHY STOCKS SOMETIMES GO DOWN AFTER GOOD EARNINGS

Netflix has just come out with another quarter of great earnings. They made just over 60 million dollars compared to earnings during the same period last year of 32 million dollars. That's great right?

Then why is the stock down more than $12 or almost 5% in after hours trading on 4/25/2011? Tomorrow investors will probably follow through and bid the stock down when the market opens. So, what gives?

This is a great example of a stock that goes down after great or good earnings. Something like this often doesn't make sense to beginners and to people that are just starting out. It is confusing unless you have a deeper understanding of what makes stocks go up and down.

Netflix's earnings were stellar and no one is denying that. Most companies would love to be making money and doing that much better in 2011 than in 2010. But for Netflix's stock price it wasn't good enough because more important than today's earnings, their management cautioned about the FUTURE. Management said that things might start to slow down a bit. That's what did it.

You see, Netflix is a very hot company right now that has had it's stock price come close to tripling in just a year. In order for that to continue, absolutely everything has to go perfectly. When a stock is that hot, you have to have earnings AND a future outlook that blows everyone away.

Actually, management's outlook is almost always more important to investors than the current quarter's earnings no matter what stock you are talking about. That is why it is also possible to have bad earnings along with a good outlook from management and have a stock go up. You see, the future is more important than the past in the eyes of investors.

Everyone knows that Netflix has been tremendously successful in their business model and they continue to sign up people at an impressive rate. They have put competitors out of business and now they are aggressively moving into streaming video which is the delivery system of the future.

But investors want to know if their phenomenal success is going to continue and any hiccup or warning about anything slowing down will make the stock stall or go backwards as we have just seen today. That will happen regardless of current earnings as people who invest in stocks are always more concerned about what the future holds.

WHICH ONLINE STOCK BROKER IS THE CHEAPEST?

In 2011, the lowest stock broker fees are found at OptionsHouse. Just $3.95 per stock trade is the cheapest price I could find of any of the online discount stock brokers.

As you can see buy their name, they specialize in trading options which are different than stocks. Beginners won't want to get involved with options until they learned a lot about the basics of stocks and the market. However, just because they specialize in options doesn't mean that they don't have a great platform for regular stock trading.

With OptionsHouse, your money is protected by SIPC just like it would be for any other online discount broker. They have an A- Rating from the BBB and they have won several awards from Barron's as well. In short, your money is safe with OptionsHouse even though they give you the cheapest stock trades.

At $3.95 per stock trade, you are getting a price that is less than half of what several of the more famous online brokers charge like E*Trade, Schwab, and TD Ameritrade. You are also getting a much better price than brokers like Scottrade ($7) and Firstrade ($6.95).

If you are looking for the cheapest stock trades online, OptionsHouse is the place to go. I personally don't use them because I have used E*Trade for years and I don't want to go through the hassle of switching. I usually don't make more than 10 trades per year though so my extra cost is not too great. However, if I were an active trader I would seriously think about switching because the money I could save with the cheaper trades from OptionsHouse would be significant.

WHY CHAOS IN EGYPT DOESN'T MEAN CHAOS IN THE US STOCK MARKET

Wait a minute. The stock market is actually UP on Monday 1/31/2011 after we all watched a weekend of wall to wall coverage of the crisis in Egypt. How can the market be going up when there is obviously so much uncertainty and danger in that part of the world?

I have to admit I thought the stock market would be down big today as there is one thing investors hate: uncertainty.

There is so much uncertainty about Egypt right now that no one knows what is going to happen, knows what could happen, or knows what to do about it. We have hardly heard a peep out of President Obama as he doesn't know what side to back or what to say either so he is just waiting and watching like the rest of us. (well maybe he is doing a little more than that)

There are questions about the Suez Canal and whether it will be able to stay open and let ships through. If not, that would impact business worldwide. There are questions about what type of government would take the place of the current pro US regime there now if it falls. There are deep implications regarding any new Egyptian government and Israel and that also will affect the whole world. It could all eventually lead to another war between who knows how many countries.

Why isn't the US stock market going lower today? The biggest reason is probably because people have gotten over the shock of the news over the weekend. If there was any panic here in the US it would have been on Saturday and the markets were closed that day. So now, people have had a chance to digest everything and they might not feel it will have quite as big an impact on us as they might have thought on Friday or Saturday.

Investors might also see the news that Mubarak has formed a new cabinet and is working to stay in power and get things under control. This would have a calming effect on investors as they are less likely to panic and sell based on improving news. As long as Mubarak stays in power, the market will likely not nosedive.

There is also a good economic news story or two out today such as this one about consumer spending having gone up in December for the sixth straight month. Any good economic news will help stabilize the market and there are more economic numbers out later in the week for jobs, automobile sales, factory orders, and construction spending. These numbers could have a big effect on which way the market goes along with developments in Egypt of course.

One of the things that is made clear today is that the direction the stock market moves, either up or down, is very much determined by the way people FEEL about things. Today was a classic day where the market COULD have opened down 200 to 500 points based solely on what is happening in Egypt. However, because investors don't apparently think the situation is quite as bad as I thought they would, the market opened up and remains up at midday.

SANTA CLAUSE RALLY STARTS 12/1/2010? DOW UP 249

Today is the first day of December and it started with a bang up 249! One might ask: Is this the start of a Santa Clause rally?

Interestingly the Santa Clause rally you may hear talked about this month refers to the week AFTER Christmas and includes the first 2 days in January. Now this is not the "official" definition because there isn't one. But most industry experts agree that it is the week after Christmas and not the whole month that is part of a Santa Clause rally if one takes place.

Most people automatically assume that a Santa Clause rally is for all of December because that makes the most sense. It has been speculated that stocks go up then because people are more optimistic around Christmas and in a stock buying mood. It has also be attributed to people getting money as Christmas presents and/or Christmas bonuses and being more apt to buy stocks rather with that money.

December has historically been one of the best months for the stock market but nothing is ever guaranteed of course. Todays rise of almost 250 points is a great start but things can change fast in this economic environment.

Remember that there is always trouble around the corner and this year we see high tension between North and South Korea as well as some uncertainty in Ireland. We also just have news that 2 million people are about to lose their unemployment benefits so December could be a rocky month for stocks despite today's big gain.

ARE INDIVIDUAL STOCKS INVESTORS "DUMB MONEY"?

A writer in The Wall Street Journal yesterday called the money individual investors put in the stock market "dumb money". You can read the article here.

The article goes on to say that because earnings are up, optimism is up, and the economic numbers are improving that more and more regular people are putting their money back in the market.

The term "dumb money" in stocks is similar to the term "dead money" in poker tournaments. In a poker tournament, all contestants that are recreational players are thought to be buying in with dead money since they presumably have little to no chance of winning. Only the professionals put in the smart money because they have the best chance to win.

Dumb money in the stock market is similar in that it presumes that individual investors have no idea what they are doing and are incapable of analyzing stocks and making decisions based on fundamentals. It assumes people invest with their hearts because they like certain stocks but they lack any concrete data or reasons to pick those stocks. When individuals pick their own stocks and decide it is time to go back into the market, they are doing it with "dumb money".

Stock analysts and anyone in the industry have smart money because they presumably know what they are doing. It is their "job" to know what they are doing. I assume that if people put their money in mutual funds or any vehicle where a "professional" gets a commission it wouldn't be as dumb of them.

Wall Street has often been portrayed as a very exclusive "club" of young professionals who get paid millions and live the high life. Whenever there is a stock scandal of any kind, politicians spew on and on about how Wall Street needs to be regulated or controlled in some way. Wall Street is viewed as a haughty group by many and using the term "dumb money" doesn't help stop that perception.

Articles like this which propagate the myth that individual investors are dumb seems to me to be a dumb thing to print. Why insult people? Actually, why insult the very people that you are hoping will use your professional money management services? It sure doesn't make me want to run out and hire a financial expert to take my investing to the next level!

IS IT TOO LATE TO BUY APPLE (AAPL)?

Is now the time to buy Apple stock? Is it too late or should you buy some in anticipation of it going up more for Christmas? I bet thousands of stock investors are asking themselves that question right now and have been for months.

The time to buy AAPL in 2010 was about a month before the iPad came out on April 3rd. You can see in the chart below how the stock was going sideways until the beginning of March and from that point it went up fast. Some choppy waters during 4 months of uncertainty after that and then straight up again.

If you bought Apple stock before the iPad was released you were betting that it would be a hit. That is how people can make a lot of money in stocks very quickly: by being correct about things in the future. But if you bought AAPL before the iPad release and it was a bomb, you would have lost a lot of money so that is the risk.

Right now people are trying to figure out just how big the iPad is going to be. All the signs show that it will continue to be huge as Dell and other competitors are going to be coming out with their own tablets. Apple has also said that the 2nd generation of the iPad that will be released in 2011 will have a smaller screen.

The question is though, should you buy Apple stock here at it's all time high of 283? Or should you wait and hope to catch it at around 250? Will this Christmas be the Christmas of the iPad and see off the chart sales? If you wait to buy, it may never go down and continue straight up and you will never get in.

These are the questions stock market investors have to ask themselves all the time. Greed plays a big part in people's investing decisions and greed has probably played some part in Apple stock going as high as it has gone so fast. People just don't want to miss out and that means they keep bidding the stock higher!

An analyst at Kaufman Bros. has just come out with his new price target for AAPL of $374 which is almost $100 higher than where it closed today. This high number adds fuel to the fire and makes people want to get in now so they don't miss out. But at $283 there is a lot of room to fall and so the risk is there. If iPads don't sell as well as hoped this Christmas season, the stock may fall rather than go up.

So, it is your decision how much you have to have Apple stock. It is your decision whether you can risk missing out by waiting for it to go lower. And it is your decision whether you could stomach the loss you might have if something goes wrong and the stock stalls. Like all stocks in the market, every individual investor has to make up their own mind how much they are willing to risk and what to risk it on.

SUPPORT AND RESISTANCE AT 10,000 On 8/26/2010

The Dow has been going up and down all year and August has been a bad month. Today it closed below 10,000 and if you look at the chart below, you will see we have gone nowhere in over 10 years now. The Dow Jones first closed above 10,000 on March 30, 1999 and here it is August 26, 2010 and we are right back at the same place! That is a long time to have gone nowhere.

Was there support at 10,000 and have we just broken below it? Will tomorrow and the weeks ahead mean the selling will accelerate because we have closed below 10,000? And what exactly is support and resistance in the stock market anyway? These are two terms that you might need a Stock Market For Dummies book to understand.

Support is a technical term that means there is a bottom price where there seems to be more demand than supply. In other words, once a stock (or the Dow) drops to a certain point, there seem to be enough people that rush in to buy because they feel that is a good price. This means that it is difficult for a stock to pass below support because people will usually buy it up. Once it does pass below support, that is a bad sign because it shows that there are few buyers willing to buy.

Resistance in the stock market is just the opposite of support. In the case of resistance, it is a price above which there are more sellers than buyers. If a stock goes up but has trouble passing a certain point, it is because that is the price that people are happy to sell at and take their gains. When a stock rises above resistance it is a very good thing because that demonstrates that demand for the stock is high and there is more demand than supply.

10,000 in the Dow is not a technical support or resistance level: it is just a number. However, it is a number that is special for psychological reasons because 10,000 sounds and looks so much better than anything in the 9,000's. People, whether they are aware of it or not, respond to these psychological stimuli and are more apt to attach importance to them.

The Dow closing below 10,000 on August 26th, 2010 may make people sit up a little more and wonder whether this signals more bad things to come. Or, they may think nothing of it and the market will go back up tomorrow. That is what is so fascinating about stocks: you never know how people are going to react to situations that come up on a daily basis and it is people willingness to part with their investment dollars that drives the stock market up and down.

HOW BAD ECONOMIC NEWS AFFECTS THE STOCK MARKET

The stock market is greatly influenced by the general economy and I have always stated that on this blog.

Following up on my last post about is this summer rally real?, we are now seeing that August hasn't been a good month for stocks. I am writing this on 8/20/2010 and as of mid morning the Dow Jones chart for August looks like this:

As you can see, August has seen the Dow go from a high of a little over 10,700 down to just under 10,200. That's around a drop of 5% and bad news is now starting to come out about the economy more regularly.

Just today there was this MSNBC article about more an increasing number of people are having to take hardship money out of their 401K's. That money comes with a 10% penalty and taxes have to be paid on it so anyone that does this REALLY needs the money and is desperate. This is a big indication of just how bad it is out there and how many people are in big trouble financially.

Also just yesterday, the market went down because of a bad jobs report. More jobs were lost in July then economists had predicted and companies look to be pulling back their hiring. I have talked about how I think we are in for bad times ahead as I think all the debt and foolish stimulus bill shenanigans are starting to catch up with us. I think the real unemployment numbers are MUCH HIGHER than the "official numbers" and I think things are going to get worse.

Now, the stock market CAN go up in troubled times but that is rare. The politicians can spin all day long about how things are about to get better or things are really not as bad as they seem but I don't believe them. I THINK THINGS ARE MUCH WORSE THAN THEY SEEM and we are going to be seeing that soon.

It the bad economy news stories continue to come out day after day and week after week, it is going to seriously stop average people from wanting to buy stocks. That will make the market go down and that is where I think it is headed. Reality sooner or later has to catch up with us and the stock market is going to act accordingly which means it is going to go down.

Let's hope I'm wrong but that is the way I see it.

IS THIS SUMMER 2010 RALLY REAL?

We have had a bit of a summer rally and July has been a good month for stocks. Profits have been good for many companies that announced this 2nd quarter earnings season and so the market has responded accordingly. But will this upward momentum be able to be sustained? Is this summer rally going to continue or die?

The fact is that the economy has not gotten any better. The unemployment rate is still around 9.5% and people are out of work in all demographics. Both personal debt and the countries debt is higher than ever and President Obama keeps throwing money he doesn't have at every problem that crops up. How long can this last and not have an effect on stocks?

The world's economy isn't doing much better as we have seen problems in Greece and elsewhere. Remember, any bad news from other countries now has an immediate affect on our US markets as this is truly a world economy. Our US companies do business everywhere and if something bad happens overseas, our market will go down as well.

The November elections are also right around the corner and there is going to be a lot of media coverage everywhere about that. People are upset and Obama's policies and the economy is going to get a lot of scrutiny which will expose some of the realities that people might have momentarily forgotten. I don't think any of this is going to be good for the stock market and for bolstering people's confidence in a continued rally.

All this adds up to my belief that this summer stock rally of 2010 could be about to be over. This Stock Market For Dummies blog believes we might be in for some tough times ahead and cash might be a good place to be. The stock market may have a little more upside to it but I think we will soon see a lot of ups and downs with perhaps more down days in the immediate future.

THE CLOSING PRICE AND AFTER HOURS PRICE: WHAT IS THE DIFFERENCE?

One of the things that might be confusing about the stock market for dummies is the closing price for stocks and the after hours price.

The closing price you see in the newspapers is the 4:00 PM price of the stock which is when the market officially closes. However, there is some after hours activity that normal investors like you and I don't get involved in. Usually this activity is not very important to the price of the stock unless some big earnings announcement is made or some big important news story happens after 4:00 PM.

The New York stock exchange, with the proliferation of news and people's access to it, has become a more global entity in recent years. The Internet and ease of making trades from anywhere in the world has contributed to this. Information of all sorts is available all the time to anyone who wants it and this means some changes were made in the after hours of the stock exchange. This means that there is now after hours activity and things going on behind the scenes that "normal" investors can't get involved with unless they know how.

If you have a stock that closes at 100 and then announces great earnings, you will see the price go up on all the tickers online and maybe on television. The next morning, even though the stock closed at 100 the day before, it may open much higher and you will have to buy it at that higher number. The same goes for bad news being announced as stocks can go down in after hours too.

By looking to see if there is any activity in a stock after the market closes, one can usually determine whether anything important has happened to the stock since the close. If you see the price of a stock being quoted higher or lower in after hours by a significant amount, it can often mean they announced great earnings or made some other important announcement like a merger or new product.

The after hours price of a stock is not something you should get too caught up in or worry about in my opinion. After all, you should be buying stocks as an investment and if a small movement in a stock's price after hours is going to influence your decision, then maybe you should find a stock where you expect bigger gains.

INVESTING FOR DUMMIES - AN OVERVIEW

The stock market is just one of many places where you can invest your money. Other investment options people commonly use are bonds, savings accounts, money market accounts, treasury bills, gold, silver, and I am sure there are many more. Every one of those investment vehicles has a different level of risk and which one(s) you use should depend on your individual situation and goals.

Investing in the stock market over the long term has, for many years, been recommended by experts as the place you can get the greatest return. Take note that this is over the long term only as it is agreed that stocks can be very risky if you have a short investment time horizon. We have all seen first hand evidence of this as the market started going down steeply in 2007 and didn't rebound until the beginning of 2009. Many people lost a lot of money during that time and many lives were changed for the worse.

Here in 2010, if you want to invest your money safely with little risk you will not be able to make much more than 1%. Interest rates are very low and they pretty much have nowhere to go but up from here. However, there is no indication when things will begin to change as there is financial turmoil across the country. It is likely that interest rates will remain low all this year.

Bank certificate of deposites (CD's) and treasury bills are the two most common ways to invest the money you have sitting around that you want to earn interest on. Savings accounts and money market accounts also pay interest buy usually a lower percentage. You can also buy bonds and sometimes do better with those.

Gold and silver have done very well in the last dozen years or so. People buy these metals for different reasons: some buy them as investments and others buy them as a form of insurance. Both gold and silver are thought to be hedges against uncertainty and thus a form of insurance during difficult times such as we are having now. People who buy them with insurance in mind do not care too much whether they go up in value and are hoping they can just retain their value. Gold and silver have never gone to zero in value and most likely never will.

Other people like to buy these metals for investments in hopes that they will keep going up in value. Anyone who has invested in either silver or gold in the last 5 years have done very well as they are both near their historical highs.

The stock market is the place where most people invest their money with the hopes of making the most in return. The stock market has historically outperformed all other forms of investments when looked at on a long term chart. However, you should never invest money in stocks that you know you will need soon.

You can make money in the stock market by buying stocks of individual companies yourself through a stock broker or you can buy baskets of stocks known as funds that are managed by a professional. Choosing which stocks to buy and then figuring out when to sell them is something that can take a lifetime to master. For this reason, many people favor and recommend you buy funds so that someone who is qualified can make the decisions. There is a fee for most funds though, and that is another expense that you have take into account.

You will owe taxes on any money you make from any of your investments. Whether you make interest income, dividend income, or profit from the sale of stocks you will owe taxes on that money to the United States government. If you make in the thousands of dollars this may require you to send in money on a quarterly basis otherwise you will incur late charges that can be quite steep. The US governement (and all governments) always want their share of any money you make.

If you feel you are in the "investing for dummies" category, note that learning how to manage money is not something that is learned overnight. It takes time to learn what all your options are and what risks you feel comfortable taking. It is important that you take only the amount of risk that allows you to sleep well at night. Your money is hard earned and if you don't feel comfortable taking risks to try to get bigger returns, that is OK. Investing is a personal issue and there is no formula that is right for everyone.

ARE PENNY STOCKS FOR DUMMIES?

8/11/2010 Update: While I think penny stocks are risky, they continue to be of interest to many investors. I have found this Penny Stocks VIP newsletter that is 100% FREE to sign up for. All you have to do is enter your email and then click on the "confirm email" link when they email you. You will then be set up to receive their free VIP newsletter.

____________________________

For years, people have been fascinated with penny stocks and the idea of making money by investing in them. One reason is that because they are so low in price, anyone can afford them. But are penny stocks a real investment opportunity you should be looking at or is it one you should never get involved with?

There are many definitions of what constitutes a penny stock. Some people consider every stock that is under $3.00 to be one while others make the cutoff at $1.00. No matter what you deem to be a "penny stock" the important thing is that it costs very little for a reason.

Some people believe that all stocks start out as penny stocks and grow from there. They might get this ideas because of the stats on some stocks which include all the different times a stock has split. Big stocks like Microsoft may have split so many times that after that has been factored in, it looks like the stock was originally offered for just pennies or a few dollars. Seasoned investors know, however, that Microsft and other high fliers like it were never offered for such low prices and the opening cost was much higher. The adjusted stock price is something you should understand before you make incorrect conclusions.

There are several things that make penny stocks much riskier than other higher priced stocks. One of the things is that in most cases, stocks that only cost pennies or a dollar or two are that way for a reason. When you get down to such low valuations, there is usually a reason why they don't cost more and that reason is never a good one. This makes most penny stocks very risky to buy but they continue to get interest from beginners and certain sectors of the market because of the "potential" upside.

Something that is the case with many penny stocks is a lack of history and information. They are often listed on "pink sheets" and anything there is not required to file with the SEC. This means you will be buying penny stocks without the usual scrutinization and regulation that is associated with regular stocks on the NYSE and Nasdaq. Of course even with regulation, things can go very wrong with any stock you buy as evidenced in recent years by stocks such as Enron that have gone bankrupt and lost investors millions. However, buying penny stocks can mean taking an unnecessary risk on something you know very little about. That is truly the stock market for dummies you might say.

Another problem with buying penny stocks for beginners is that with any stock priced so low, there is a lack of liquidity. This means that you may have trouble selling your stock because there are not enough buyers. Penny stocks are something that you should really understand before you get into them and you should only do it with money you have to lose. Too often, young investors who don't have much money choose to take shots at penny stocks just because they are cheap and they hope to find the next Dell or Google and end up losing their money.

STOCK INVESTING IN 2010 - GREEN LIGHT AHEAD?

This is the last post of 2009 for this stock market for dummies blog and we have seen a very good year for anyone who bought stock this year. After a horrendous 2008, the market bounced back to settle in at over 10,000 once again. Will there be more good things to come next year?

As the job situation and economy is really not much better than it was a year ago, one has to wonder whether stocks have gotten ahead of themselves a bit. When and if people start to realize they are paying higher taxes, the unemployment rate is still around 10%, and the prospects for a quick turn around under Obama isn't happening, it seems the stock market may slow down and even turn back around.

Having gone up so much in 2009, it might be a good thing to become a cautious investor in 2010 just to be safe. The stock market moves on perception and if the public perception of our economy turns real negative again, the stock market will head right back down. Obama healthcare and all the other taxpayers money he has used for bailouts and pet projects cannot be making the situation any better.

The Christmas sales numbers aren't out yet but I have a feeling they will be average at best. Will be see another rash of companies declaring bankruptcy after those numbers come out like we have seen in years past? Christmas is such a big percentage of the retailer's year that a bad Christmas is enough to send many of them into bankurptcy in this economy.

The stock market gave a lot back last year of what it took the last two years but that doesn't mean the same will happen in 2010. You have to be smart with your money and not have too much of it in any one place. Those that have all their money in stocks are gambling to an extent and for them it truly is the stock market for dummies.

STOCK PICKING FOR DUMMIES (AND SMART PEOPLE TOO!)

Picking the right stocks is a challenge for any level of investor. It is almost made more difficult by the abundance of "professional analysts" that freely give their opinions on radio, television, the Internet, and magazine. Anywhere you look, you can find free stock tips and suggestions which make the stock market for dummies a difficult place to navigate.

So, where does one go for stock picks they can trust? There are two places and they are both free. The first is Morningstar and you can sign up for a free membership or a free 14 day trial to their premium membership. Obviously, you will be getting more with the Premium membership, but you don't have to sign up for that and can go with just the totally free one if you like. Either way, you will be getting stock news, stock analysis, and stock picks all for free.

Morningstar has been around since 1984 and they have put together one of the most comprehensive stock market sites on the Internet. They have more than 6 million registered users and they are often ranked with the best investing sites on the web. I like them because they have Pat Dorsey who makes stock recommendations that are always conservative in nature. He makes suggestions and analysis that I know has been well thought out and can be trusted based on his past record.

The second stock picking for dummies resource is Jubak Picks. Jim Jubak has just gone out on his own after writing for 12 years for MSN Money and his new site is much of the same but just more of it. He is another conservative stock picker who has consistently beaten the market year after year and his site is totally free. All his buys and sell are well explained for investors of any level and his picks are documented for anyone to see.

Learning the stock market is hard, especially if you have little time to keep up with the market and individual stocks. These two investment websites will at least give you a starting point and some interesting stock tips to learn. There are so many stocks out there that one has to have some sort of sifter that identifies companies that might be worth a look. The fact that both of these sites are free makes them that much better.

HOW TO FIND GOOD STOCKS TO BUY FOR DUMMIES

One of the most difficult things any stock market dummy or veteran has to do is to find good stocks to buy. Figuring out how to buy stocks for beginners is relatively easy and something you only have to learn once. Figuring out what stocks to buy, on the other hand, is a decision that has to be made over and over for the rest of your life.

There is no shortage of opinions on TV business shows and magazines from the stock gurus. Jim Cramer and his type on TV always have a list of stocks they say you should buy. In my experience, their choices are no better than the ones I can make myself by throwing a dart at a dart board. For instance, how many stock gurus warned us to pull all our money out of stocks when the Dow was in the 14,000's? Some experts might have been cautious but no one saw anything as bad as what really happened.

So, where can you find trusted opinions of what stocks to buy? One good choice seems to be Morningstar. Morningstar is one of the most respected names in independent investment research and opinion, as well as the recognized leader in stock and mutual fund analysis. Their mission is to create great investing products to help people reach their financial goals.

Consistently ranked among the best investment sites on the web, Morningstar offers a wide range of online portfolio management tools, financial data, unbiased stock and fund analysis, video commentary, and more.

There is one reason above all others that I like Morningstar. Pat Dorsey is a stock analyst who both writes and does video analysis of the stocks he deems worth investing in. As a conservative investor, I like to listen to those experts who are not afraid to say they do not like a stock's potential and that they recommend not investing in it. Pat Dorsey is someone who often says "no" to a stock and many of his picks are conservative in nature. By contrast, many of his colleagues seem to be positive about almost everything which really provides no value to any stock market beginner trying to come up with some good stock picks.

Morningstar and Pat Dorsey is one source that should be considered when putting together a list of best stocks to buy right now. Their website is comprehensive and will provide good value to both stock market beginners and stock market veterans alike. Of course, when you are trying to find stocks to buy you should do as much research on your own as possible and get several opinions as well.