The Stock Market For Beginners and Taxes by Sarah Hughes

The stock market for beginners can be quite an intimidating prospect. Figuring out all the terminology and what it all means can be overwhelming. Unfortunately, you must add that once you start trading stock, you will be responsible for reporting and paying tax on your trades.

Lets assume you bought and sold your first stock and where lucky enough to make a gain. Congratulations!....but you now owe taxes. You know the saying, "there are only two sure things in life......death and taxes". Sure enough, the IRS is going to want it's cut of that nice gain you just made. When you start stock market trading, you must be sure to keep good records of all transactions.

When tax time comes you are going to be required to fill out Schedule D and report the gain. In order to do this you are going to have to make sure that you have precise records of all your buys and sells and the dates they took place. Stock market trading just made your tax life a little tougher and there is nothing you can do about it.

It is important to note that every single time you sell a stock, whether it be for a gain or a loss, is going to have to go on that Schedule D. The brokerage companies are required to report all your transactions to the IRS and so there is no escaping it. If you fail to report your gains and losses, your information will not match what the IRS has on you and bad things will start to happen. At best you will be required to make your return correct and at worst you will owe more money in penalties and fines.

If the stock you sell for the year adds up to be a loss, you can use up to $3000 of that loss on your return. Anything over that amount in losses has to be carried forward until the next year. This is just another thing that makes reporting your stock trading gains and losses a headache.
The stock market for beginners is hard enough before you add in the taxes. Unfortunately, the government won't have any sympathy for you as they consider you rich for just having enough money to invest in stocks!

About the Author

Please visit my site Stock Market For Beginners which is set up to teach you everything you need to know to get started in stocks.

Stocks and Investments for Beginners by Chris Robertson

The stock market welcomes newcomers with open arms, but you should take precautions before jumping in with both feet. Stocks, bonds, mutual funds - all these can be lucrative sources of income if you know how the trading market works. These beginner tips can help you get started in the right direction for stock market success.

Common Types of Stocks and Investments

You can buy stocks in a variety of ways based on your financial situation, the risks you want to take, and your goals for the future. The two main types of stocks available are common stock and preferred stock. Common stock means having equity in a corporation. Preferred stock means the investor has equity that resembles both common stock and bonds, with a fixed percentage of the face value as its dividends. The prices of preferred stocks rise when interest rates fall, and vice versa.

Stocks are also categorized as mutual funds, penny stocks, growth stocks, value stocks, income stocks, and blue chip stocks. Mutual funds are securities that are diversified among many companies to reduce risk levels. You can buy stock in several companies with only one purchase or initial investment amount. Blue chip stocks are investments in well-established companies, which offer more stability due to the company's successful track record. Penny stocks are risky, low priced stocks that are traded outside of a major exchange, or "over the counter."

Stocks paying high dividends over a period of years are called income stocks. Growth stocks increase as a business grows and can also yield a high return. Value stocks are stocks that are bought while under-valued with the expectation that they will grow in the long term.

A bond is a type of investment that has a maturity date, at which time the investor receives a set amount of money. The amount is usually $1,000 per bond. There are corporate bonds, which are backed by a company, and U.S. Treasury bonds (T-bonds), which are backed by the U.S. government.

Forex trading is a form of stock trading in which a person invests in currencies, not companies. Currency trading can produce high yielding stocks as one nation's currency surpasses another in value, and it can be traded day or night through online resources.

How to Buy Stocks

Before buying stocks, bonds, or mutual funds, learn how each works and the amount of risk involved. Learn the basic principles of the stock market - how you can earn money, and how you can lose money based on the stock market's patterns. Develop a mentality for long-term goals and success, not only short-term wealth. The stock market, if worked right, can bring both short-term and long-term financial freedom.

Use the services of a stockbroker to buy stocks if possible. They do charge quite a bit, but can offer you the guidance you need as a beginner in the stock market. They can also manage your account for you, which is a huge time saver. If you have limited funds, there are also discount brokers (especially online) who might not offer full service, but can help you get started. You can also invest directly into companies with DRIP plans, or direct investment plans.

How to Pick Stocks

Pick your stocks carefully. Don't place all your hopes and dreams - and dollars - into one company. Diversify your investment among several companies. Buy stocks in well-established companies so you can afford to take a risk with a new company occasionally. Buy some mutual funds, which are less risky, for long-term growth. Diversifying your stock investments will help balance your portfolio and reduce your risk. Also, follow stock news carefully to find out which companies are steady in their earnings and which brand new companies have the most potential. Education is pertinent if you want to be successful with stocks.

Whether investing in stocks paying high dividends or mutual funds, approach the stock market slowly and carefully before buying stocks. Consider the stock market as any other business, with potential risks and rewards. You can easily use online resources to study the stock market and learn how it works. Go online today to start building your stock market portfolio!

About the Author

Chris Robertson is an author of Majon International, one of the worlds MOST popular internet marketing companies. For tips/information, click here: stocksVisit Majon's Financing\Investing directory.

Stock Market 2008 - Safe Growth Stock Investments for an Unpredictable Market

The stock market investing environment is certainly scary to a lot of investors in the short term. With fears of a recession on the horizon, along with problems like the falling value of the U.S. dollar, rising commodity prices, distressed credit ratings and problems with inflation, the thought of pushing new money into the stock market is definitely not a popular idea.

After testing the January lows somewhat successfully, I feel as though the market's conditions may finally be seeing improvement. In my honest opinion, we are oversold. While the market may continue a downtrend, an oversold market is no place for shorting... and reaching into the bargain bin in the first half 2008 may be the best move you ever make.

Looking into "safe" areas of the market, our selections are few and far between. Straying away from the popular markets like tobacco and discount foods, I want to highlight some areas of the stock market where high growth remains a potential... and risk remains somewhat in check. Which sub-industries am I talking about? Agriculture and Aerospace & Defense of course! :)

Agriculture

Out of all of the sectors in the stock market, agriculture is an investing hotbed that hasn't really slowed down or produced negative numbers for 2008. As we watched all of the pillars fall (banks, retailers, restaurants, etc.), agriculture's turn never came! The ag. commodities such as wheat, corn and soybeans have showed no signs of stopping their run-up, and the 2008 outlook out of these stellar companies has been nothing but positive. Whats more? Most of these companies come with low risk, despite high upside... something rare in today's market.

If you want to play this bull, and I suggest that you do, you want to keep a keen eye on Deere (NYSE: DE), Monsanto (NYSE: MON), Potash (NYSE: POT) and Mosaic (NYSE: MOS). Let's start with Deere. I feel that they are the safest way to play this ag boom because they are an industrials sector company by definition. I recommended this company back on February 11th, and my views really haven't changed. You aren't going to get a great valuation as they almost always trade at a premium to the market... but as long as you can catch a dip, I don't see this train slowing down any time soon.

Moving over to Monsanto, this is a fantastic investment if you can get in at an attractive price now. They recently announced a huge agreement with Becker Underwood and Plant Health Care to provide a new hybrid seed treatment platform. The Dow recently partnered up with Monsanto, and prospects are very good for the future.

Potash and Mosaic are really sitting on cloud nine right now. Even after we have seen a big drive into these companies over the past week, I think there is some space available and people really aren't being as aggressive as they should be. Mosaic is another stock that I recommended, this one back in late January, and their catalysts haven't changed. Their PEG is over 3. Ignore it. These ag. companies don't come cheap, but I see them continuing to stride upward.

Aerospace & Defense

Being an Industrials sector buff, you can't help but feel confident in the Aerospace & Defense industry. One thing that typically will not slow in recessionary times is the growth behind military contracting, national defense funding and aerospace development. With the ongoing war over in Iraq, there is a constant driver for most of the big five A&D firms, and much of this is guaranteed for 2008 and beyond. I like General Dynamics (NYSE: GD), United Technologies (NYSE: UTX) and Lockheed Martin (NYSE: LMT).

I want to recommend Boeing (NYSE: BA), especially with their currently dirt-cheap valuation versus their historical trading range, but I just can't see through this cloudy future. Personally, I want to own them now, but with the disputes and such after losing a contract to a combined Northrop-Grumman and Airbus EAS team, their future is somewhat uncertain. Instead, I like General Dynamics. Not to be cliche, but Jim Cramer recently devoted an entire segment to this A&D powerhouse. They are the biggest holding in the industrials sector of the Nittany Lion Fund, LLC that I help manage, and we are very confident in their future success. If McCain is elected, this is a superstar. But even if he's not, this company is still secure in its fundamentals and is trading at a discount in a bullish industry.

The Aerospace & Defense industry is red hot, safe, and trading at a discount to its historical premiums despite leading the market averages this year. With this in mind, I like United Technologies and Lockheed Martin in addition to GD. UTX recently made a proposal to acquire Diebold, which would position United Tech for some solid growth opportunities overseas. All future implications remain bullish on the stock, and analysts seem to be loving this, the biggest domestic aerospace & defense company, for the future. Lockheed Martin is your typical flawless company that continues to impress. These folks don't disappoint and have had remarkable fundamentals and cash balance for as long as I can remember. LMT is safe and at an attractive price!

As investors, we need to look for safe havens like Agriculture and Aerospace & Defense for predictable growth, stability and recession-proofing measures in order to continue to grow our portfolios. I wanted to touch on commodity-tied stocks like those tied to Gold, Oil and Natural Gas... but we will be touching on those soon, so we will save the best for last. Focus on the Ag. and defense companies if you, like me, can sense an oversold market with some bargain prices up for grabs. Its one thing to catch a falling knife, but these industries really haven't fallen at all... so they are ripe for investment.

-The Net Fool

The author of this article is Jim "The Net Fool".

He is owner of theNetFool.com If you'd like to learn more about the stock market, you can visit http://www.thenetfool.com You'll find all the information you need!

Article Source: http://EzineArticles.com/?expert=Jim_R_Regan

Smart Stock Investing - Do You Have Time to Exit a Trade if it Goes Wrong?

Take your time

The US Securities and Exchange Commission have a great piece of advice for smart stock investing: Online trading is quick and easy, online investing takes time. This is very true. The proliferation of online brokerage accounts offering instant trading facilities for very low fees means that it has never been easier for individuals to trade a stock.

Trading a stock may have become easier and quicker however making a smart stock investment still requires the same amount of research and risk assessment. Do not go off and buy the moment you feel a trade may be a good investment, instead go away and do some more research.

Always have an escape route

If you want to make smart stock investments always make sure you have an escape route in case the trade goes wrong. A simple and effective way is to set a stop loss limit with your broker so if the price falls to a preset level, your stock will be sold, limiting your loss.

If your broker does not offer stop losses then another option is to always make sure you have access to market information and a phone so if the market moves against your stock, you are firstly aware and secondly able to contact your broker to again close the position out. Obviously if you have a massive trade on in a period of market instability, going on a 4 week jungle trek in South America with no mobile phone probably isn't the best option.

If you want to find out more information about smart stock investing, learning to trade commodities or investing in general, please visit the authors website.

Article Source: http://EzineArticles.com/?expert=James_C_Kerr

bullish strategies that work by Shaun Rosenberg

There are many bullish strategies that can make you a lot of money in the stock market. These strategies all have the power to turn a small portfolio of only a few thousand into a large portfolio consisting of hundreds of thousands to millions within time. If you already make money in the stock market these can help you increase your earnings. What are they? Below is a list of bullish strategies.

1. Buying a stock. This is the simplest way to make money in a bull market. Say you like stock XYZ. It is trading at $40. You think it is worth more than that and decide to buy it. The stock moves up to $44. You sell it and have a 10% gain. Simple.

2. Buy a call. When you buy a call what you are actually doing is, buying the right to buy a stock at a certain price, before or after a given date. If we bought a $40 call on stock XYZ when it was at $40 we would have bought the right to buy the stock at $40. Say we paid $2 for this call. When it went up to $44 the call would be worth at least $4, because $44-$40=$4. We would have walked away with at least a 100% return. While buying a call can give you huge returns it can also give you huge risks. If the stock went down to $38 you may have lost your entire investment.

3. Sell a covered call. For every seller there has to be a buyer What if you bought the stock at $40 and sold that $45 call for $1. What would have happened? Well you would have walked away with an initial $1. And you would have made the $4 from the stock. The downside to this is if the stock went higher than $45 you would have to sell it at $45. You would have lost potential profit.

4. Bull call spread. What if you sold the $40 call for $2 and bought the $35 for $6. Initially you would have lost $4. But what happens if the stock stays above $40 by the time the options expire? You would have had to sell it at $40, but could have bought it at $35. You would have made $5(what you made) - $4(what you spent) = $1 profit. This is a 25% return not bad. You just need the stock to stay at $40 or higher.

5. Sell a put. A put is the opposite of a call. When you buy a put you buy the right to sell a stock at a certain price by expiration. So what if you sold the $35 put for $2. You have the obligation to buy this stock at $35. You take home $2 for this obligation. So now all you want this stock to do is to stay above $35 by expiration. Even if it comes down to $35.01 you make money. The down side to this is even though you have a high probability of success your risk is high. If this stock comes down to $20 you have to buy this $20 stock for $35.

If you are more long-term oriented buying a stock for a little more than it is worth should not bother you as much. For this reason you should not sell a put on a stock you would not like to own.

For more information on how to make money in the stock market visit http://ww.stocks-simplified.com

About the Author

When I was young I wanted to learn how to trade the stock market. So I traveled around the country listening to professional traders talk about how they are making money in the market. Now I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.

Stock Market Tips - Prevent Your Stock Picks From Going Bust by Reggie Dunn

It's easy to make money on the stock market, right? All you have to do is buy good stocks and sell at the correct time. The experts will tell you that the stock market is a sure thing - a guaranteed money maker. Well if it's so easy, then why do so many in the stock market game lose money? History has proven over time that there are a few common mistakes by traders that cause them to pick losing stocks and here they are:

1. Refusing To Take A Small Loss

You've heard the saying "You Can't Win Them All". This holds very true with picking stocks. Even the most proficient of traders take their share of hits. What makes them come out on top in the long run is they know when to fold. It's okay to be wrong, just don't stay wrong for too long on any particular pick. If your pick doesn't work out the way you thought it would - get rid of it and move on! Traders need to have the mindset of a relief picture in baseball. If you get shelled today, you get back out there tomorrow and start over.

2. Panic Selling

As stated above, sometimes you just have to bite the bullet and sell a stock that's a loser but make sure you don't jump the gun. You should never sell just because you're scared. You should sell if it makes rational, logical sense to do so. Too many people sell stocks because the market had a bad day and they're just plain afraid it will go even lower the next day. They panic and sell and then kick themself when the stock shoots back up.

3. Not Doing Your Homework

To be a successful trader, you simply must do your research. You need some type of logical system in place for picking your stocks. This isn't the race track and you cannot allow yourself to pick a stock on a whim or because Joe down at the coffee shop told you that a certain stock is a sure winner.

4. Picking Stocks With Emotion

This is the biggest mistake of all. Fear and greed are part of human nature and this is the hardest obstacle to overcome when picking stocks. If you can eliminate emotions from your trading, you have just won half the battle.

These are just some of the things to keep in mind when picking stocks. There are many others, but just using common logical sense and having a set system in place will have you picking more winners and consistently pulling in the profits.

About the Author

To see how easy it is to make money picking stocks and to get a free trial of a proven system that has consistently produced profits go to Stock Trading Systems USA Review. Once you try the system you will wonder how you ever got along without it.

Penny Stocks Buying Selling Without Risking Your Own Money!

Today was the first day since November of 2007 that the stock market sharply increased. So what does that mean for Penny Stocks Buying Selling?

Now if you were an analyst or broker, that would be something that would get the blood pumping in your veins. And of course if your favorite blue chip made you some money today, well congratulations! The feds just loosened some of the credit restrictions they placed on banks so that probably had something to do with today's favorable report.

That's the news in the Blue Chip Market, but what about the Penny Stock Market? See, while there are similarities in both, there are some keen differences that you need to be aware of. One of the biggest differences that you see is the amount of profit you can make with the smaller stocks. While you might get a 5% gain on your Apple Stock, you could easily experience a 62% with the right Penny Option. Why? Because this market is based on speculation and that's were the big gainers come from.

Larger stocks sometimes referred to a Blue Chips are traded on places like NASDAQ, while the smaller stocks are sometimes traded on NASDAQ Small Cap Market, but you will generally find them in PINK SHEETS or on the CDNX (Canadian Venture Exchange). And, Penny Stocks are Options that trade for under $5.

Given the price tag per share, you can see why this market attracts so many investors. But beware! 97% of Penny Stock traders fail, so before you get into this type of investing, you really need to get your hands on some proven penny stock tips.

Just like trading larger shares, the first thing you need to do in order to start Penny Stocks Buying Selling is to find a place where you can trade online. You need to either get a good personal recommendation or research expert opinion before you sign up. I know of one Penny Stock Advisor that even offers $100 in an online account when you sign up for their weekly newsletter.

After you decided on an Online broker, the next thing is to acquire some Great Penny Stock tips so you can begin buying and selling.

One of the best resources I know of for proven results in this fast paced market is a Stock Trading Robot Called "Marl". While human brokers can only analyze a certain number of stocks in any given day, this computer analyzes 100's of options at the same time. Then, the owners who are also stock brokers themselves, review each pick that is poised to profit and send them out in a weekly newsletter.

And unlike other similar services, Marl keeps a Monitored Profile. This is absolutely crucial to profiting with this type of trading. Most small options Advisors can tell you when to BUY, but knowing when to SELL is key to making serious money. That is why having a Monitored Profile is so critical to your success.

If you are ready to start trading in this highly profitable market, then consider trying it with other peoples money first. Minimize your risk, so You can Really earn while you learn about Penny Stocks Buying Selling.

97% of Penny Stock Traders Fail! Not our Subscribers who average a 387% return on their investment. We are so sure that our Penny Stock Picks will make you money that we are willing to give you $100 of our money to start trading with our Hot Tips.

http://www.bestpennystockstobuy.com

Article Source: http://EzineArticles.com/?expert=Janet_Brooks

How To Invest In Bear Markets

Every now and then, the stock market will make a switch from a bull market to a bear market. The bull market is when the economy is doing well and companies are making money. This provides an excellent opportunity to make money on the stock market. A bear market, however, is a different ball game. A lot of money can be lost when the market goes from a bull market to a bear market. Here are some tips on how to make stock picks in a bear market.

The stock market needs to go down about 20% before it is officially called a bear market. The truth is, though, that by the time it has gone down that much you have already lost a considerable amount of money in stocks. This makes it all the more important that you be prepared in advance and learn how to profit in more difficult times.

Stocks during a bear market are much harder to pick than in a bull market. In fact, it can be very hard to select them at all. During a bull market you can definitely expect to lose some money simply because of how hard it will be to make a right pick.

The nice thing, though, is that when companies are at the bottom, you really cannot go wrong with investments at that time because they cannot go any lower. Knowing that time may be a little hard to guess, however, unless you start to see some evidence that the economy is starting an upswing again.

You will actually want to stay away from certain types of stock during a bear market. Some of them may show promise for a little while, but then will soon age and falter like other stock at the time.

This can especially happen when the increase is due to a particular product put out by a company. Owning stock during a bear market needs to be reduced to a few so that you do not incur losses over a wide area. Select a few that you think will do better than others and consolidate with them. Only make new investments that you are more or less sure of, and avoid doing any blind or ignorant investing.

With the Internet these days, you have a lot of opportunity to get all kind of investing tips from professional individuals and from investment companies. There really is not any reason why you need to depend entirely on your own gut feeling. When others come up with the same interpretation of trends and company profitability, you stand a good chance of making a better investment.

Selling off some of your stock and buying gold may have merit as well. Investing in silver, however, is not a good idea because it traditionally will follow the market. This will require some investigation, as well as proper timing to ensure the best results. Holding on to other money instead of investing it is good until the market starts to turn a little bullish again.

You can learn more on how to invest from http://www.howtoinvest.freedvd.com.au

James McInnes is a professional share market trader and investment entrepreneur, with many years experience trading the Australian Share market. You can visit his site at http://www.freedvd.com.au for further information on trading the Australian Share Market

Article Source: http://EzineArticles.com/?expert=James_Mcinnes

Marl The Stock Trading Robot - Daily Stock Picks Given Out For Free by James Blunt

Can there be such a thing as a stock picking robot. No, you say. Well, maybe you should continue reading and start thinking outside of the box. I recently came across the latest craze to sweep the stock trading world off its' feet. Apparently, there is a stock picking robot on the market that can provide stock picks that are ready to make tremendous gains and from my experience it seems to work. Allow me to explain. After using the traditional methods of picking my own stocks and taking advice of so-called stock gurus', I was able to lose a fairly large portion of my investment portfolio.

So, one night while searching the net, I came across this offer for a penny stock picking service. I subscribed to their newsletter ($47) and within a few days, I had received my first stock pick. Well, that pick went on to gain over 87% in less than one day. Then about a week later, my second pick went up 50% within less than an hour. I was astounded that a stock could gain this much in such a short amount of time.

As two or three weeks went by, I continued receiving stock picks, and then one day, I was offered a chance to purchase their stock picking robot named Marl for a mere $97. At first I was skeptical, but I went ahead and purchased Marl. Well, let me tell you, this was the best investment I have ever made. I was posting on a stock forum one night about the success I was having with Marl and was told by a traditional trader that Marl was a complete scam and I had been conned. It was amazing to me this guy could somehow see into my stock portfolio and tell me how my stock picks were doing. This stock picking guru, Aiki14, who claimed to have over 25 years of stock trading knowledge, also challenged me to a stock picking contest. So, I did what any red-blooded American would do - I accepted.

MarlStockRobot.com

About the Author

Click Here!

Learn Stock Trading and Know When to Pick Stellar Stock Online

Learning how stock trading works is an important part of online investment. Even if you don't plan to pursue stock trading as s full-time career, knowing when to pick stellar stock options is primarily based on knowing the ins and outs of online stock trading.

For beginners like you, it is essential to have a working background on online stock trading, or, instead of learning how to pick stellar stock, you might be the one being taken for a ride. The best way to learn all about online stock trading rests in your choosing a reliable and reputable online trading firm.

When picking an online stock trading firm, you may start by surfing one that offers free account registration, with a beginner level. Many stock firms would say that you don't need to learn the ropes to pick stellar stock on the floor; all you need to do is sign up and type in your credit card information and they'll do the rest --- beware of such statements.

It is essential for you to learn how online stock trading works, so that you'll know where your money is going and if it's working for you, and not for the online trading firm. Be clear about what you want, and go for it. Don't rely on sites and traders who state all you have to do is sign up and they'll do all the rest. Fraud works by making you feel like you don't have to worry about anything else, at all. An online site with beginner levels is one way of knowing that that site cares about its investors, and not just the profit.

Another key feature of a reliable online stock trading firm is its ability to give you access to real-time and delayed stock quote news, updates, tips, picks and stock analysis that will help you pick stellar stock options. Many online stock trading sites offer beginners with information that would help them learn how to manage their investments, and how to pick stellar stock using stock reports, day trading stock tip updates and information. This is essential, because the key to making great buy offers is information.

Many online brokerage sites offer real-time day trading stock tip and stock quotes to keep you informed of the shifts and movements on the floor. Some may even offer after hours stock tip and updates for your mutual fund options and stock investments. Just to be on the safe side, try searching for sites that offer the best ways for you to get firsthand information from the market. These sites offer day trading stock tip developments, stock quote data, and other stock trading information. Getting real-time stock information is essential especially for day trading and direct stock investments.

On the other hand, delayed stock quotes are often used for after hours trading on mutual fund stock options, as well as stock analysis and market projections. You can also use these information in developing your own stock trading strategy, while earning the experience to make the best day trading stock tip.

As a beginner, you may be handling relatively solid stock options just so you can get a feel of buying and selling stocks. Soak in as much information and experience you can. After some time, you'll be able to move on to bigger and more volatile stocks, and your learning experience will make the difference between being able to pick stellar stock and mediocre ones.

Learn how you can pick stellar stock online. Find a stock market investing guide to help you get started with stock investing.

Article Source: http://EzineArticles.com/?expert=Zachary_Riff