vjarnot

Post your investment questions and answers here, so we can keep the stock recommendation threads cleaner and more to the point.

hersheyjan

hersheyjan

Investing information for new investors - http://money.cnn.com/pf/101/lessons/4/index.html

EvoVII

OKay, couple questions:

1.) When is a good time to sell? Let's say you have a stock, and it's doing well, is there a general rule when to sell? (like after it increases by whatever %)
2.) How much is the bare minimum one should put into a stock to yield a substantial gain ($1000? more?)
3.) Are penny stocks good or bad?? (should you stray away from cheaper stocks?)

vjarnot

I'm guessing you're not talking retirement savings - you can hold those stocks for 10-20 years. Day-trade type penny stocks are a different animal. Hold on until you think it's done going up. Some people will sell when a stock goes up 20% or down 20%... There's no fool-proof method, if there were, we'd all be rich. If you hold too long, the stock may go back down - erasing your gains; if you don't hold long enough, you're not realizing all the potential profits. If you read that other thread, I bought ARTG and sold for 15% profit - as was pointed out later, I could've held on for 30%. This doesn't really bother me, as you need to be comfortable with the amount of risk you're taking. There have been many instances when I was greedy and ended up taking a loss - now I'm a bit more conservative.
You're looking for a $1000 gain? Well, just reverse engineer it - if you expect the stock to rise 10%, you need to invest $10,000...
A lot of investment professionals and other knowledgeable types would say that penny stocks are to be stayed away from. I'm not going to tell anyone to not do something, but be aware that penny stocks are the closest thing to taking your money to Las Vegas. They are arguably the riskiest investment on Wall St. and a very easy way to lose all your money...

MattH25

[QUOTE]Originally posted by EvoVII
[B]OKay, couple questions:

1.) When is a good time to sell? Let's say you have a stock, and it's doing well, is there a general rule when to sell? (like after it increases by whatever %)
2.) How much is the bare minimum one should put into a stock to yield a substantial gain ($1000? more?)

mns2k

I have to agree on good advice on the above. I think that you need to be clearer on your investment goals and time frame. For example I purchased 1000 shares of XL-B for $25 a share. It has a five year call and pays 7.625% and is currently @ $27.56. Short term, I have had it for less than a year, I could make about $2,500 or I can hold and get the interest along with a guarantee pay out of $25 from my initial investment. At this stage in my life long term is better. If I was younger I would take the profit and run.
As far as selling an easy way to make your best educated guess is go out on MSN, Zacks, MotleyFool, etc. and see what the pros expect the stock to do in the short and long term. As stated above you still need to make the call. As Kenny Rogers would say "you gotta know when to hold em and know when to fold em". As MattH55 says pigs get slaughtered. I agree that there are three kinds of people in the market. Bull, Bears, and Pigs!
I do not play with penny stocks but, I do go for some "flyers" like TGEN (not a plug). Bought after the IPO fervor died and I just hope that one of the drugs in their pipe line hits. If not I own about 600 shares of nada.

Just some personal thought to share.

Saab9-3

Two questions...
1. What time does the market open and close?

2. What exacly is shorting a stock?

MattH25

1. It opens at 9:30 A.M. and closes at 4 P.M. Eastern Standard Time so adjust locally.


2. Shorting a stock is the practice a selling a stock with the intention of buying it back later at a lower price. Say you believe stock XYZ is going to underperform and it's pps (price per share) will decline. Shorting a stock would be to sell XYZ now and then at some future date buying it back at a lower price (thus covering your short...the shares you sell aren't yours, they are borrowed)...the difference in prices is your profit (sans fees). The shares you sell will be borrowed from another investor (your broker will most likely charge a fee till your short is covered). When you buy-back the stock the shares are in essence returned to the original owner. Shorting stocks can be risky, make sure to use a stop-loss to prevent getting squeezed. It can also be very rewarding and is one way to make excellent money in a bear market.

Saab9-3

Thanks Matt- I knew the basics of shorting a stock, but I could never make any sense of it. Since you are borrowing the stock, does the brokerage charge interest, as well as a transaction fee?