Are these good investments?

Question

right now i am 15 and i have not started in the real stock market yet (because i am under age) anyways i am currently playing an online stock game, i started with 1,000,000 and invested in citigroup, ford, walmart, nike, Barrick gold, bank of america, and monsanto. I was just wondering are these smart investments or should i invest in different companies. Also i literally started today so if you have any pointers on anything trading/investing related pplease fill me in!!!! btw should i not invest in companies so quickly or is it really just based on how much money i have?

Answer 1

It would help to know how long you plan to play. The strategy is different for 1 month, 6 months, 3 years, or 60 years.



If I were playing for 1 month, I'd make huge bets that the stock market will go down because September is statistically a bad month. On a very short-term basis the stock market is oversold, so I would dollar cost average in, buying puts if the rules allowed it, or shorting stocks and ETFs if the rules don't allow options but do allow shorts, and buying double inverse ETFs if both options and shorts are not allowed. This is gambling, not investing, but if it's a contest with play money the way to win is take a guess and leverage to the max.



For a long-term game, I would play the megatrends of the world running out of water and inflation in the US. Obviously the current worry is deflation, but whenever the recession/depression ends, the stage is set for major inflation. Barrick would do well here and is probably the best of the gold "blue chips." GDX and GDXJ are two ETFs to play the trend more broadly. I plan to concentrate more on silver than gold, for two reasons. First, there is no question that industrial demand will rise when the economy grows, and second, I think the price of silver has been manipulated downward, and that can't last forever. Most people would consider the second reason to be totally loony but the evidence is there. The only silver mining ETF I know of is SIL. SLW is my favorite silver stock play.



There are a lot of water plays. I'm following FLS, BMI, WTS, PNR, CCC, and WTR. PHO is a water ETF.



Alternative energy stocks are not in fashion right now, but when oil goes over $100 they will start moving again. Too many choices to list, but these three companies are now in terrible shape, and if they turn things around they will multiply in price: ESLR, FCEL, and BLDP.



Good luck, and congratulations on learning about investing early, when it can do you the most good.



Houyhnhnm

Answer 2

Many new investors are lured to the appeal of a penny stock due to the low price and potential for rapid growth which may be as high as several hundred percent in a few days.



Check here http://penny-stock.gelaf.info



Similarly, severe loss can occur and many penny stocks lose all of their value in the long term. Accordingly, the SEC warns that penny stocks are high risk investments and new investors should be aware of the risks involved but you can even make very big money. These risks include limited liquidity, lack of financial reporting, and fraud. A penny stock is a common stock that trades for less than $5 a share. While penny stocks generally are quoted over-the-counter, such as on the OTC Bulletin Board or in the Pink Sheets, they may also trade on securities exchanges, including foreign securities exchanges. In addition, penny stocks include the securities of certain private companies with no active trading market. Although a penny stock is said to be "thinly traded," share volumes traded daily can be in the hundreds of millions for a sub-penny stock. Legitimate information on penny stock companies can be difficult to find and a stock can be easily manipulated.

Answer 3

Hey this investment thing sounds good maybe I should buy some of this stock it looks good and people say it is a good company. Investing sound like fun. Actually, investing should be boring. If you get a kick out of investing it is because of a gambler's high. Wow I bought IBM and it went up!! Ooh ! I bought Apple and i lost money but I'll pick a winner next time.



Brokerage houses, mutual fund companies, magazines, TV shows all make a lot of money by making you want to get in the game. The 10 best stocks to buy for 2011, Cramer's best picks, Stocks to sell now. Just like the Casino's show everyone having a great time gambling - come on and play. If you play their game you will help them make money but you will have a hard time. Note: the Casino's don't show all the people who left losing money just people having fun.



Investing is a serious matter that means risking your money. It is important to educate yourself before putting much money at risk. I suggest reading The Boglehead's Guide to Investing. It is written in an easy to understand language and will help you understand how to invest wisely.



Good Luck

Answer 4

Just because Citigroup has a low price of about $4 per share doesn't mean it is undervalued. Why do I say that?



First if we compare all the major commercial banks (JP Morgan, Wells Fargo, Bank of America, and Citigroup), they all have market capitalizations of between $112 billion and $148 billion with Citigroup at the low end and JP Morgan at the high end. Citigroup had the most problems over the last three years with about $90 billion of reported loan loss provisions and heavy loses for 2 years. If it wasn't for about $30 billion in tax credits, they would likely have gone under or required even more government assistance. Just because they wrote off that $90 billion doesn't mean it evaporated but it is likely that Citigroup floated about $90 billion of high interest corporate bonds and preferred shares or sold off assets to cover the losses.



Therefore if the price of Citigroup shares increased in price by about 30% and the other large banks remained stable in share price, that means Citigroup would be the king of the hill in market capitalization and should be the best large bank around. Do you believe that Citigroup with all its loan loss provisions (and we don't know how much is still on its books) fits that category? Obviously they are still having some major problems since they are still the least profitable of all the large banks. Also since there were large losses during the past two years and only returned to profit in the last two quarters, it concerns me that they may have changed their accounting rules to allow them to appear to have turned the corner (believe it or not, that is allowed). They could possibly have changed from accelerated depreciation to normal depreciation to make the company appear to be more profitable than it really is or did a few other gimmicks.



Bank of America had the second most write-offs (mostly from the accusation of Countrywide and Merril Lynch) and also lost money over the past couple years. It also has to overcome it loan loss provisions.



The write-offs for loan loss provisions for Wells Fargo (mostly from acquiring Wachovia) was about 1/3 of Citigroup and JP Morgan had about half the amount (mostly from acquiring Bear Stearns and Washington Mutual). Both JP Morgan and Wells Fargo were the only large banks to report profits every quarter over the past 2 years. However, JP Morgan appears to do a slightly better job than Wells Fargo in investment banking and it recently called three of its high interest preferred shares series ($700 million total) indicating that it has plenty of money available so I would consider JP Morgan as the cream of the crop.



Of all the large banks, it was only Citigroup that created their banking problems without outside help (no accusitions to create the losses).



In my opinion, the only way that the stock price of Citigroup would increase in price if JP Morgan and Wells Fargo lead the way with stock price rises dragging both Bank of America and Citigroup along with them (based on fundamentals).



Personally I don't like gold or gold mining since it is too speculative and when gold drops (like 1981), it can drop quickly to half the price and remain there for 20 years.



As far as your other picks, they are ok but they wouldn't be in my protfolio.



Stocks prices do not necessarily follow fundamentals in the short term but always gets back to fundamentals over the long term so it can be very difficult to determine the best stocks over the short term.

Answer 5

The best question is "Why did you invest in these companies?"



If you answered the above with "Because I think they will perform well," then that is called speculating. You're speculating that it will go up, you have nothing backing your answer. You might as well gamble with someone on coin flips.



If you have sound reasons as to why they will go up (e.g. Research predicts large room for growth in this industry, projects future earning growth, good balance sheet, etc.), then those are good ways to base your investment decisions.

Answer 6

we've been in and out of Canadian gold for quite a few years and in basic terms have been given out little while era. wide-unfold electric powered is a enterprise which has divested itself of non- objective incomes sources.as quickly via fact the smoke settles the shares would be in severe call for as quickly as greater.