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How to manage risk
How to analyze investment opportunities
The importance of long-term planning
Risk no more than 1% of the trading account on each stock trade.
Let’s say that I am trading a $100,000 account. I will risk only 1% of my account, or $1,000. If I enter the stock at 100 and the 50-day moving average is at 95, that means that my risk is 5 points on the stock (100-95). In that case, I should only buy 200 shares of stock. If I buy 200 shares of stock, and the stock falls 5 points, I will have lost $1,000 or just 1% of my total account size.
The key to making a lot of money is not losing a lot of money in the process.
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Great companies that are rapidly growing will always trade at high P/E's (Facebook, Amazon etc). Value investors will always tell you to stay away from companies with high P/E's. Ignore them.
Matthew's advice: buy growth stocks that are hitting new 52-week highs, or even all-time n...
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Investing is not magic. Remember that ...
If you can stick around long enough and keep learning, you will be successful at...
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A dividend stock will usually make a cash payment into your brokerage account every 3 months. Works well as you can take the cash from a dividend payment and use it to buy more dividend stocks.
A dividend yield is how much money you make yearly compared to the share price (see image): ...
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Find stocks with the following characteristics:
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Get out:
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Every stock has a bid price and an offer (or "ask") price. “You sell to the bid, and you buy from the ask.”
When you are buying a stock, you can use 2 different kinds of orders:
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An index is simply a collection (or "basket") of stocks. An ETF allows trading an index just like a stock. The best-known indexes are:
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Active investing strategies means picking your own stocks and building and managing a portfolio. It's hard and few people do it well.
Passive investing strategies mean investing in an index. When indexing, most people like to invest the same dollar amount ...
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Let's say that a company's stock trades for $100 and that the company has earnings per share (EPS) of $6.50 over the last 12 months.
We can calculate a trailing ("last 12 months") P/E ratio for that stock by simply dividing the stock price ("P") by the EPS ("E"), so 100/6.50 equals about 1...
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Popularized by investors Benjamin Graham & Warren Buffett, value investing is about buying something for less than it is worth. It's based on this idea that you can find undervalued companies (companies with low P/E - price per earnings). It's hard to do it these days:
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It's where shares in companies are traded. The most important ones are:
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CURATED FROM
Life-long learner. Passionate about leadership, entrepreneurship, philosophy, Buddhism & SF. Founder @deepstash.
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An advantage of inverse ETFs is that they do not require the investor to hold a margin account as would be the case for investors looking to enter into short positions
While you can try to duplicate the Nasdaq 100 or the Nasdaq Composite with individual stock purchases, it would be more efficient to invest in an index fund.
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