Stock Markets Exposed

Making money in the Stock Market...?

My husband has been reading A LOT about the stock market lately. He has $25,000.00 in savings. He does not want to start with much. Maybe 1,000.00...He'll deposit whatever he has to though, to start...just only use 1,000.00 in the beginning. I would consider him very tech-savvy, business oriented, and quite intelligent. Realistically, what would be the best way, for him to do this professionally, starting at 1-5 thousand dollars, and be able to turn 60-100 thousand a year? I do realize the risks, already. I do realize the scams of the books...ect. I'm not looking to receive discouraging comments, only honest opinions, one way or the other. Have any of you made 60-100k a year working only with 1-5k in the beginning? Thanks in advance, your comments are truly appreciated!

Public Comments

1. In my twenty plus years of investing, nothing beats long term growth through various plans offered by top employers. Once I did have a big gain, and that was back in 1991. Then, most banks were in trouble, and real estate was also being hammered like it is today. So I did some searching and found a Texas bank that was in deep trouble. I decided to take a chance and bought 300 shares of it's preferred stock. Soon, the F.D.I.C. took them over and sold all their branches. When the F.D. I C. announed they made a profit selling the bank assets, the preferred stock I owned went from $1.00 a share to $39.00 in three months. I cashed in and bought a racehorse. That racehorse gave me three wins, lots of seconds and thirds, in 38 races over four years. Today, I play around with various companies, noting that the solar energy stocks are seeing some nice gains. You might want to start with a few small investments in some emerging stocks like solar energy. Do a search and look for them, and then decide which ones you believe are going to be big hits. I had SOLF go from $12.00 to $26.00 recently. Whatever you decide, don't expect to make sixty grand from a one grand investment. That longshot rarely connects. Instead, expect small gains and some losses as you forge ahead. Good luck.
2. A handful of best-performing equity fund managers this year have pulled in maybe 120-300% growth (mostly China equity funds) this year... these are experts- full-time, skilled, experienced, backed by large companies, huge arsenals of stock analysis tools and teams of PhD researchers at their disposal. But aside from the few stars, the majority of equity fund professionals have actually failed to beat the S&P benchmark. So I'd say turning $1k into $60-100k in a year is improbable unless you get VERY lucky with some high risk investments or have some illegal insider info. I hope this isn't seen as discouraging, but please be aware it takes great skill to win (and lose) on the stock market over such a short timeframe. You're really better off researching sectors/countries you like and sticking the money in the relevant fund. It's not as fun though as investing in the market yourself; and of course the only way for your husband to truly learn the markets is to get in there, research and play. great, maybe he'll have a "nose" for it - but be prepared to underperform the benchmark and forget these unrealistic 600-1000% goals. Be prepared to lose everything! Best of luck.
3. What do you mean by "professionally"? Is he planning to manage other people's money for them? If so, how does he plan to attract money with no previous experience? Or, do you mean that you simply want to live off the earnings from his investments? I'm not sure that I understand that part of your question. I'll assume that you mean the latter. Making 60k a year with a 1k start is very ambitious. The stock market has historically returned about 11% over the long term. At that rate, you would need a portfolio of about $550,000 to make $60,000 and you would need more than $900,000 to make $100,000. It will take years of disciplined saving and investing or an investor of near miraculous talent to build a thousand bucks into a portfolio of that size. That being said, investing for the long term is a great goal and can provide you with long term financial security. I started out with just $3,000 twenty five years ago and I'm on track to retire comfortably. Go for it! Just be realistic in your expectations. You may get to that $60k a year, but it's going to take time - probably a lot of it - when starting out that small. Good luck!
4. If everyone could make $60k-100k from $1-5k, then everyone would be multi-millionaires. The stock market is full of risks and you might hit big with one stock and lose big with another. No one really knows. I made a lot of money with high flying stocks in the past and I lost a lot of money also. Now I still invest in the stock market but just a little wiser. I feel the best way to get ahead with the stock market without much work is with time as in long term investments. Here's my honest opinion though. I would take $1k-$1.5k and start a ROTH IRA. Check if you qualify first. Every month contribute to the IRA and make sure at the end of the year, you're maxed out to the maximum contribution. I invest with Vanguard. They are among the lowest fees around and I don't need to do much. Almost all investment companies now have funds where you just pick your retirement year and the fund automatically adjusts so that the fund is less risky as you get closer to retirement age. That's as easy as it gets. If your company has some sort of 401k or Thrift Savings Plan in which the company matches your contribution, then join that also. Make sure you contribute enough money to get the maximum match from the company. In the long run you'll come out ahead if you contribute every month. The reason for it is dollar cost averaging. There is so much more to investing than looking at tech stocks. There's mutual funds, bonds, etc. Look into portfolio diversification or allocation. I learned a lot from personal experience and from reading. Picking single stocks works for some people but I just don't want to go though all the hastles of reading their prospective, balance sheets, etc. And who's to say they aren't lying with their numbers as companies did in the past. I would just do a Roth IRA, 401k, etc and stay in the stock market long term (20 years or more if possible). Check out Vanguard.com There is so much info at the site about beginning to invest and answers to questions. If not, then I would take some money and invest in a stock you picked. See what happens. You might hit or miss. But I'm speaking from experience. Long term in a roth will make you happy. I know I'm VERY happy when I look at my statement of my ROTH and TSP and I still have so many more years left before retirement. GOOD LUCK!
5. Be realistic! :-) Reading A LOT is not enough. You need experience. Overseas investments would be the best choice for you. Starting a small business would be the way to go if you have time. Alternatively try to invest in someones business. You may receive up to 20% guaranteed interest a year. You will not get such high returns on stocks, mutual funds, bonds or CD's. If you invest $1,000 at 20% annual interest rate, you will get back $2,488.32 in 5 years. I run my own business and my net profit is over 5% a month (over 60% per year). Do not invest in HYIPS! Beware of Nigerian spammers and scammers (419 fraud). Best of luck!