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Monday, December 21, 2009

Stock Market Can Be A Respectable Source Of Income

By Johnny M Junior

I seriously don't blame the numerous people who have turned their investment options towards the stock market only to lose them all in one night of gruesomely speculative market activity. The stock exchange is very tempting for those of us who would like to raise capital for starting businesses. And while it is a good place to make money there are a few secrets that people are yet to learn.

The very first thing you should know is that the stock market is a very unstable arena where prices change and fluctuate several times in a week. Owing to this unpredictability it can be a risky option to invest in the stock exchange. Today a share might go for $3 and the day after the price would have gone down to $0. 50, anything can happen. With that in mind you should plan your investments carefully so that you don't lose out on hard earned money.

Having realized that the stock exchange is unpredictably uncertain you must start by investing a small amount of money before you go big. Starting small has always had the benefit of giving a good vantage point from which to observe trends and influential market forces. So once you have held stocks for a good year you can then decide on how much more to invest and in what.

I recently read an article on stocks and shares that breathed a scintillating breath of life in me. It was about attaining a balance between household expenditure and stock investments. As a beginner you won't have that much money to start off with and this can be dangerous if you don't manage your expenses well. Look at your fixed income and make a budget of all monthly expenses. The excess money remaining behind is what you must invest to avoid being in financial doldrums.

Before we get into the nitty gritties of stock investment, I want to share something with you. Doing your research on the stock market and how it works is the best way to start a career on the stock exchange. Monthly and yearly reports of stock performances, magazines on the stock market and bestselling books are good sources of information to give you basics on how the stock market is handled.

At the present moment precious metals are gradually rising. Four months ago gold was pegged at about $950 but now gold is being sold for over $1200 per fine ounce (28grams). So if I were to invest in a commodity it would definitely have to be gold because it has been rising so steadily that there are no fears of a sudden crash. Another metal following behind is silver.

But one must be wary of investing in commodities that are rising in share value. The reason for this is that a high is normally followed by an all time low. So when it comes to the oil price that has risen considerably following the fall in the US Dollar, it is important to remember that it can also fall drastically.

I would also recommend that you refrain from investing in certain things. Such examples would be ETF's and mutual/shared funds. These can be very unpredictable at times. - 23212

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