What company would have a good investment in the Stock Market?
My Calculus teacher is holding a little competition: each student has to "invest" in a company, and whoever has the most money after the quarter (or after our school year ends, I think) wins a prize. Anyway, I'm not sure which company I should take up considering how our economy is working.
Should I try to invest in a smaller business first because the price fluctuates, and once I get a good price, I could probably sell and buy something else? Or is that a horrible plan? Should I invest in green technology of some sort because green technology is kind of growing?
Speaking of plans, how does one become a good stock broker? What are some of the simple tricks of trades I should use?
Thanks. And please note, I am a high school student who watches the Nightly Business Report, but gets lost every now and then when watching it.
Answers & Comments
Verified answer
Buying a stock because you think the price is going to go up isn't "investing"... it's speculating.
Contests like this screw people up, and helped lead us to a society where the dot-com bubble grew and grew and grew... and then exploded in our faces, and was replaced with a housing bubble, then a commodities bubble, and now we're in a money bubble trying to avoid the pain of those episodes.
Stock is a share of ownership in a company. An investor is looking at the company, the market it's in, it's competition, it's suppliers, it's customers, etc. The price of the stock is meaningless. You buy a sound, well-managed company that provides a product or service that people need and you'll wind up making money. If you look at the ups and downs and try to "time the market", you will lose your shirt. That sort of "investing" is no better than heading to Las Vegas.
But, for the sake of answering your question... first, find out when the final tally is taken. Think about what's happening in the world. Think about which way you think some world events might go. Maybe Israel will bomb Iran's nuclear facilities? Maybe another oil rig will go up? Maybe the Chinese will crack down even harder on rare earths? Think about the effects those events might have, and who stands to benefit. For a short-term project like this, that's all you can do... make an educated guess and hope you guess right.
Hi there,
In my experience with investing in the stock market, I was very successful in picking stocks that were brand new to the market. Usually when new stocks are put on the exchange, they are at their lowest price. Typically if the company is a booming industry (i.e. technology), hop on those stocks and make sure that they are brand new. As you will notice, they will rise initially and sometimes by a large margin. If you can get out of them after their initial rise, its a good strategy. This method is a risky method though. Like before, the industry must be booming.
Other companies that are without a doubt winners are Google and Apple.
Good luck