Basic investing tips


The first key of investing is: do not put all your eggs in the same basket. Do not put all your money at the same place or you may lose it all. You have to diversify your investments so that if one goes wrong, another may go right. There are a few investments where your capital is protected, but they give you very little interest and that's it. If you want to win big, you have to take some risks. The bigger the risk, the bigger the chance that you will either lose big or win big.


You need to have secure investments: obligations, guaranted investments. You can also buy mutual funds made up of obligations. These investments have low risks, they also have low returns. Next, you can invest in mutual funds composed of obligations and stocks. This is a little more risky. You get more returns if stocks go up, but you can also lose some of your capital if they go down.

The key: diversification

High Risk Investment: Investing in Stocks


You can also invest in stocks. There are stocks considered more secure like stocks of big respected companies. But no stock is ever completely secure. We only know that it was a good investment after it goes up and that it was a bad investment after the stock goes down or the company goes bankrupt. That's why you need to have many different stocks and funds. You can invest in stocks you think have good potential. You can buy a stock when it goes down and you feel it's a bargain, but there is a risk that it may go down even further. If you bought the stock and this happens, you have to decide whether to sell the stock with a loss or wait till they have more good news. Sometimes, it's best to take a small loss than see the stock go down even more. Some investing experts recommend selling stocks that go down more than 8% of the price you paid them. On the other hand, if it's just a bad day or a bad period, maybe it's best to stick it out and watch it go back up later. A stock will usually move on news or on the anticipation of it. If the news was leaked or anticipated, there could be a big sell-of on the news as many people "buy on rumor and sell on news". The news can be a good day to sell the stock and get back in lower unless it is extraordinary news. You can find news as soon as it comes out on Allstocks.com: NYSE (Dow Jones) news NASDAQ news NYSE, NASDAQ and OTCBB news Some news do not make their way there though. So it is a good thing to also check other websites having news about stocks. You should check the price and the news about stocks that you own with one of the three companies below and you should also have a list of stocks that you watch. You can watch the prices of US stocks, find past news and company profiles and get portfolios to track stocks at: Yahoo Finance (you have to put .ob after the symbol for OTCBB stocks and .pk for pinksheets stocks) CBS MarketWatch (there you can also sign up to be notified by e-mail when news about companies you select come out.) MSN Money and at your own investing company. Also see my quick quotes box below. If you live outside the US and you want to buy US stocks, you can find the exchange rate for your currency at the Yahoo! Finance of your country. For example, in Canada, here is the address: http://ca.finance.yahoo.com You can also use this money currency converter:


You can also buy stocks of emerging companies, hoping they will get big some day. This is usually speculation and is very risky. But it might be the best way to make a lot of money, sometimes very rapidly if you're very lucky, sometimes after having had to be patient and waiting months and even years for the stock to go up. You can also lose everything if the company goes bankrupt. But you can take a chance on these stocks with money you can afford to lose. If you buy a stock at 20�, you can get 10 times your money if it gets to $2.00. A stock priced at 20$ would have to get to 200$ to give you the same results. If you buy a stock for 2� a share, you get 10 times the money you invested if it goes to 20� and 100 times your money if it gets to 2$. You can also take a "smaller" profit of 100% when a 2� stock gets to 4� or of 20% when a 5� stock gets to 6�. But of course, the stock can also go down. If you want to wait for a very big profit, you may have to wait a long time. The stock can stay around the same price for months, even years, it can go down (even to 0.0001$) or the company can go bankrupt or do a reverse stock split (increasing the price of a share artificially, but decreasing the number of your shares proportionally). This doesn't make you lose any money, but it makes it more difficult to win a lot of money. If there is a 10 for 1 reverse stock split for a stock priced at 2�, it will now be priced at 20�, so it must now go to 20$ instead of 2$ for you to make 100 times your money. It's not the same thing at all. There can even be 200 for 1 reverse splits You can find many low-priced stocks in the OTC Bulletin Board (OTC BB). You should do some research on the company and buy only stocks from companies you believe have good products and good marketing plans. Since there are usually also lower volumes on these stocks, it is important to understand how the stock market works.

Very High Risk Investments: Investing in Penny Stocks


When you look at the price of a stock, you will see a Bid and a Ask number. You may see a Bid of 0.15$, with a size of 1500 or of 15 expressed in hundreds and a Ask of 0.18$ with a size of 2500 for example. It means that 0.15 is the highest bid by people who want to buy the stock through limit price orders and that there are 1500 stocks available at that price and 0.18 is the lowest price asked by people who want to sell the stock through limit price orders and that there are 2500 stocks available at that price. If you want to buy or sell at market price less shares than the amount available at the Bid or Ask prices, you will pay 0.18$ a share if you buy the stock and get 0.15$ a share if you sell the stock. If you want to buy more shares, then you will get all the shares available at the Bid or Ask prices, plus shares at the next lowest price if you sell and at the next highest price if you buy. This is how stocks go up or down, Buyers take the Asks which get higher and higher if there are a lot of buyers. Sellers take the Bids which get lower and lower if there are a lot of sellers. For the OTCBB, the number of shares of the bids and asks are always indicated to be 5000, so in fact, it means that you do not know the actual numbers of shares at the price indicated. Also, the next price after 0,18 might 0,20$ or 0,50$, it depends. Here is a link where you can see a list of the highest bids and the lower asks of the market makers on a particular stock (delayed 15 minutes). Just put the symbol of the stocks you want: OTCBB.com For the OTCBB, it is usually best to put an order with a limit price. You can put a price lower than the Ask price or higher than the Bid price if you want to be the next one to be taken. You can also put a price much higher than the Ask price and much lower than the Bid price and hope that the market will get there. But you may have to wait days, even weeks for your order to be executed. At one point, you can decide to buy or sell at the market price or decide to buy another stock.


Stocks usually rise up when the company announces good news. So it can seem to be a good thing to buy on the news instead of having to hold a stock for a while hoping that maybe news will come one day. The problem is that news often leaks or is anticipated before it is announced. So the stock often starts to rise up before the news in anticipation of it and a lot of people " buy on rumor and sell on news". So if youb uy on the news, you may pay a higher price and see the stock retrace below your entry point when the profit taking starts. Still you can buy a stock on news if it is extraordinary and/or unexpected. Here is where you can find all the news about OTCBB companies as soon as they get out: Allstocks.com To know get tips on which stocks to buy, you can listen to an online radio station only about what is going on with small cap stocks during market hours IBCRadio (click on Listen Now) To get an idea of how people feel about some stocks, you can check message boards like this one: Raging Bull Message Board (enter the stock's symbol at the top), but beware, do not believe everything you read there. There are pumpers trying to make the stock rise up so they can sell higher and bashers trying to make the stock go down so they can buy lower. To get you started, here are the symbols of a few OTC BB or pinksheets companies I think have some potential: SSWH, CMKX, IDTA, IVOC and PRIM. But I can't predict how they will do and you have to do your own research and use you own judgment before investing in them or any other stocks. There is no guarantee and it's always at your own risks.


More tips about: Using the Internet - Working at Home - Building a Website


For more tips about how to trade (when to buy and when to sell), see my TRADING page

Bid and Ask Explained

When and What to Buy

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Mutual funds are composed of many stocks, usually those of the best companies in all sectors or in one particular sector, like technology, energy, biotechnology, etc. These funds often follow the trend of the market in these sectors. The fund is influenced by all the stocks it contains. If one stock goes up or down or the company goes bankrupt, this will influence the fund, but it will be counterbalanced by the other stocks. If nearly all the stocks go up or down, then it will have a big influence on the fund. If a sector is hot, you can take advantage of it and put a lot of money in a fund of that sector for a while, but be aware that at some point, it will get to a peak and then fall down (as the techs did in 2000). You can buy funds from different sectors to lessen your risks. You can buy mutual funds from your bank and from companies like Fidelity, Aim, CI, Guardian, etc

Middle Risk Investment: Investing in Mutual Funds

Low Risk Investment: Investing in Obligations