Penny stock trading is a concept that applies to those stocks that are less than $1 in value. You will find that penny stock trading is a great place to start if you are new to investing, because you can start out with small investments while you are learning. However, it is also important to realize that with penny stocks there is generally less information for you to base your trading decisions upon.

The trade off though, is that you can get involved with penny stock trading for a very low amount. You don't have to have too much money placed aside for the investing to take place. They can be risky but you can make a decent return on them as well. When you take part in penny stock trading you aren't going to get rich quick, but you can build a nice bit of profit to put away for a rainy day-- or to re-invest into larger stocks.

Penny stock trading can also help you to build up your level of confidence, and then you can move on to more advanced types of investing. Some people really do enjoy investing in penny stock trading so they continue with it even after they have learned the ins and outs of it. They have also learned how to do some additional research on such companies-- this way they can significantly lower the risk involved for them in such investments.

As a result they have found their niche where they are comfortable, and they have also been able to successfully make money as they are aware of the heavy peaks and valleys that can occur with penny stocks. They can change rapidly in a short period of time so if you do make such investments you need to keep a close eye on them.

Some people don't take penny stock trading too seriously due to the low dollar value of them, and you will have to decide for yourself if this is a type of investing that you are willing to experiment with or not. Even though there aren't high dollar amounts involved, you can still experience the thrill, the fun, and the profits from such types of investing.

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Most people are aware that penny stocks can be risky. However, if you have a good strategy or penny stock finder you can greatly decrease these risk. The reason penny stocks have gained this bad reputation is because people see penny stocks as a way to get rich quick. They will usually invest in a stock due to a gut feeling, then they end up losing their investment because they didn't undertake the proper research.

I have found that there are two different strategies that I could call the best penny stock finder. The first is a penny stock newsletter. These newsletter are useful resources which give you valuable stock picks. They are based on valuable well researched information done by professionals. Therefore the stocks they provide are usually very accurate. If you are looking for a way to choose your stocks, this resource will contribute greatly.

The second and perhaps most accurate penny stock finder, is stock picking software. These programs are very accurate because they are based on extensive and research done by the program. The reason that these method is better than any other is because computers are able to analyze, research, and make far more accurate predictions than any human can. I highly recommend this method. While stock picking software isn't cheap, it is the most effective way to pick stocks. When you use one of these, you aren't leaving your stock picking to chance. You are getting reliable stock picks, that have a high likely hood of turning a profit.

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With the implosion of the global financial and credit markets, leading to the worst conditions in at least 70 years, it might be important to have a better understanding of the stock market and it works.

First, why is it called a market? Well, a market is a place where goods are bought and sold. The stock market is where people buy and sell stocks, or shares of ownership in a company. Potential investors can choose from many companies that are listed on the stock exchange (or market). When people buy and sell stock, it's called trading.

Who Am I If I Own Stock?

When a person buys stock in a company, that person becomes a shareholder in that company. (Stockholder is another name for a shareholder.) A shareholder is also called an investor in the company. When that company makes money, the value of the company's stock often increases. Then more people become interested in investing in the company. Sometimes, shareholders receive a dividend, which is part of the company's earned income in the form of a cash payment.

Some people try to make money by buying and selling stocks. Stock prices move up and down. Sometimes very dramatic changes in prices occur and as we have seen with the crash of the markets in October of 2008 prices can fall very sharply. When that happens, shareholders lose money by selling stocks that they own. A company's stock price may be affected by market or economic conditions or in the case of a market crash, just irrational fears.

When people invest in a company's stock it has an effect on the stock's price. As more people want to buy shares, the stock's price usually goes up because more people want to own it. On the other hand, if more people want to sell their shares and there is less demand for them, then the price of the stock goes down.

Just like an individual, a mutual fund can also buy or sell shares of a company's stock. A mutual fund is a group of stocks and/or bonds that is owned by a group of people. The advantage of a mutual fund is professional managers select stocks to buy and when to sell. The people who invest in mutual funds are also known as shareholders because a unit of ownership in a mutual fund is called a share. A mutual fund uses the cash invested by its shareholders to purchase stocks, or in some case, bonds. Since a mutual fund may contain the stocks of many companies in its portfolio, shareholders are often able to own a greater and more diverse number of stocks than if they invested directly in the stock market.

Two Common Measures of Market Performance

Stock market averages are quoted in the media because they provide clues about overall movements in stock prices and whether most investors are trying to sell or buy shares. The most often-quoted market average is the Dow Jones Industrial Average. The prices of a specially selected group of 30 industrial stocks (some of the largest companies in the United States) are averaged each day to determine the Dow Jones Industrial Average.

The Standard & Poor's 500 Index (S&P 500) t 500 different stocks. It's an index composed of the stocks of 500 US companies. Created by the Standard and Poor's Corporation in 1923, today the S&P 500 follows a number of sectors, including financials, information technology, health care and many others.

A big difference between the Dow and the S&P 500 is how their values are calculated. While the Dow only looks at stock prices, the S&P 500 looks at the total market value of each stock in the index. A stock's total market value is found by multiplying its share price by the number of outstanding shares. To find the S&P 500's current value, a computer figures out the total market value of all 500 stocks in the index, adds them together and divides that sum by a number called the "index divisor."

A lot of investors prefer to use the S&P 500 as a market indicator because it looks at total market value and includes more stocks from different industries than the Dow. Many mutual fund portfolio managers compare their fund's performance with this index.

That's why many people think this index gives a clearer picture of the stock market than other stock market averages or indices. Since the S&P 500 includes so many companies and industries, it's known as a broad-based index. Although a mutual fund may compare its performance to the S&P 500 or another broad-based index, this does not mean the fund's portfolio has the same stocks that are tracked in the index.

WHAT IS NASDAQ?

Nasdaq is short for National Association of Securities Dealers Automated Quotation system. This computerized trading system was launched in 1971 and has become very popular as the market for smaller companies. Stocks traded over-the-counter, rather than on a traditional stock exchange, are reported here. The Nasdaq Stock Market now accounts for over half of the volume of all stocks traded every day, and the Nasdaq Composite currently tracks the prices of more than 3,000 stocks.

As with the S&P 500, the market values of the companies within the index are used to calculate the value of the Nasdaq Composite. But because it contains so many smaller companies, this index offers a look at a different section of the market than the Dow or the S&P 500. Investors use the composite to get an idea of what's going on with young, and possibly fast-growing, companies.

Which Index is Best?

No one market indicator is best for everything. There are more than 100 indices and averages for watching different parts of the market. But if you use the Dow, S&P 500 and Nasdaq Composite together, you should get a good idea of what's happening in the entire stock market.

All kinds of people invest in the stock market for all sorts of reasons. Some people are active traders, taking positions in stocks for a day or two looking for quick changes in the price of stocks, and then selling on any upward movement in price. This is known as day trading. Other people invest in stocks for the long-term potential for growth and the gains from the payments of dividends. Others have their accounts professionally managed by a stockbroker, who will often be authorized to buy and sell in the name of the account holder.

As we enter into 2009, most forecasters are calling for a sharper recession and predicting that both the credit markets and stock markets will take several months to recover. The smart money is looking around at the prices of stocks and carefully picking from the sharp declines to buy companies at way under real value. The risk for most investors, is as the economic continues to decline, even good companies that are under valued may fail.

Stock prices as low as this have not been seen for a very long time. If you plan to invest now, be there for the long haul and expect more sharp variances in prices before we see stability return to stock investing.

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There are many ways that you can double the amount of your money. Most of which requires you to invest it somewhere. If you do not want to build your own business from scratch and face different risks inherent in start-up operations, you can invest it in stocks. Of course, even investing in stocks has risks. But what you just need to do is study the stocks movement and the stock profile of the company you are eying for investment.

Because of the availability of the Internet, stock analysis is made easy. There are many resources available that can equip you in stock analysis. You simply have to take time in learning about stock trade and investment. Eventually, when you learn how to start investing in stocks and experience the reward and losses, you would be able to develop personal principles on how to trade successfully.

Once you are well equipped with how to invest in stocks successfully, you need resource that will provide you stock profile to aid you where to invest. In fact, this resource could be a good start for you. There would be no need for trial and error experience. You don’t even have to make your own picks using the stock analysis methods that you feel comfortable using. You just have to visit sites that provide you with all these data before hand and it is when you evaluate on your own. A good start in stock investing will surely be rewarding. And it will be made possible if you find sites that provide you reliable stock profile of companies where you can start investing.

One of the companies that offer stock profile about a particular company is Featured Profiles. It lists the best stock picks all throughout the Internet. This will surely help you get a start on stocks investing. Once you start on, the journey will lead you to rewarding experiences even if you have to lose. The idea is simply for you to start out after learning how to invest well.

Experiences in Actual Investing

Once you get a hold of the stock profile at Featured Profiles where you can invest wisely on stocks, you develop into a true investor. Everyone starts somewhere. And if you are interested in putting money to double, then you can start with stocks investing.

There is really no perfectly favorable experience in stocks. This is actually true to all life experiences and investing is not exempted. With your stock analysis method, you need to put it to practice using the stock picks from Featured Profiles. The stock profiles will guide you to favorable stock analysis and it will be a good start for you. However, you may still find yourself in trial and error stage since you are just starting. If your analysis is right or if what you understood was right, then you are already starting to develop your principle in investing. Failure or losses may be inevitable but the experience will lead you to more knowledge in actual trading. As you continue with the experience, you would then establish a philosophy of your own.

In conclusion, if you want to invest your money in stocks, you have to learn how to go about this using the resources on the Internet. Once you are equipped with know-how, you need to dare and start investing. You can begin with the stock profile provided by Featured Profiles.

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Do you love trading with stocks? Well there are many people who simply love stock trading and the stock market. We all know that there have been many people who make huge investments in the stock markets. Though many people do make good profit but there are some who suffer huge losses. We are here to guide you through certain secrets so that you can make huge profits from the stock market. Follow these million dollar secrets and you would find that earning is so easy.

There are many secrets for succeeding in the stock market, whether you are a beginner or an experienced campaigner in the market there are certain things that you need to follow in order to succeed. Let us see some of the basic secrets of earning:

1- First and foremost thing that you need to do is decide on the type of trading you are looking at. There may be various situations where you might yourself have reservations about your investments, so take care of those before investing.

2- When looking for quick money, try day trading. This would ensure that you would get the return in the same day. Great isn't it?

3- If you really are looking for a huge profit then day trading just would not be the perfect thing for you. All that you would be required to do is invest for a longer duration. The profits that are earned are huge.

4- Keep a close watch on the various happenings on the market and the moment you sense something make a move without wasting time.

If you follow the tips mentioned above, then you would see that these simply are million dollar secrets of the stock market. It is not that people do not know them but they simply do not implement them. Follow these million dollars secrets to earn millions of dollars!

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

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Are you looking for an investment option? The best thing and the safest thing that one can do in such a situation are opting for some short term investment taking care of the fact that the investment yields good profit. In such cases where you are looking for a short but profitable investment the best thing that can be done is High Yield Investing. High yield investing is preferred by most people these days and if you too are thinking of making certain investment then consider this to be an option.

Just take a look at the benefits that are being offered by high yield investing and you would know what makes us suggest the same for your investment:

1- the investments are far more safer than the other ones and the main reason for it being so is that the investment of it in nonprofit organizations are far less, so your money doesn't get affected by any reasons.
2- With high yield investing the investments are at times done in companies that suffer from regression. Hey don't worry; the reason behind this is that such companies that are in state of temporary regression would very likely offer huge interests to its investors.
3- The interest rates are stable so whatever happens, the chances of your investment staying safe are far higher.

These are only a few of the advantages that are offered in high yield investment. When you are looking for a quality investment and want early results there isn't anything better than this type of investment, simply give it a try and see the magic of a short but profitable investment.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

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There are some fundamental things that a potential investor must consider before investing in a particular equity. These things are very important because they are the things that determines the success or otherwise of your investments. Growing your investments depends largely on you, the investor.

Some of the things to consider especially when investing in growth stocks are.
1) The management: Do they have a good management team that you believe can take the company to another level? What is the vision of those saddled with the responsibility of piloting the affairs of the company?
2) What is the financial state of the company? Are they struggling with depts. And mounting threatening loans from the banks, are they struggling to survive, or is the company financially stable? This is very critical for your investment decision.
3) Is the present economic situation of the country favorable for sub sector of the company you want to buy into or not?
4) What is the value of that particular stock? Is it fairly priced, over priced or under priced? All these are critical issues that must be carefully analyzed before investing.

It is not easy to figure out the best entry price for a fundamentally sound stock, but it is something that you must try and do before investing, if you really want to make a success in your investments.

An investor that identifies a growth stock will be tempted into investing all his funds into that particular stock hoping to compound wealth as the company grows, but this is not professional. It is important to know that opportunity does always exist in the stock market, so if the investor invests all his funds in one particular stock and the next moment, he sees another that is better, he will be left with nothing. I.e. you have locked yourself out of fresh opportunities.
So before investing, the first thing the investor must do is to decide on a strategy he wants to adopt in trading. He may decide to go for “value” stocks, or for “growth” stocks. Investing in both is not bad depending on your capital, however, professionally, it is better to focus on one. It is better to study the two and follow the one that best suites you. This will make you a better investor.

Some characteristics that are common with growth stocks are:
1) Average growth: If you look carefully, you will notice that the average revenue growth of these companies, compared with other companies not in this category is not the same, theirs is always higher.

2) They are mostly in the bracket of industrial sectors that are expanding continuously. They are not limited to a particular geographic or economic set-up.

3) They seldom pay dividends to their share holders.

4) Because of their aggressive marketing strategies, most of the times, their growth surpasses their earning forecasts.

5) How long you will hold your investment here is determined by the growth of the company.

In conclusion, investing in growth stocks is all about investing for the future. The investor must be able to predict whether such company will be able to maintain the tempo or not. This means that he must know in details, the plans of the company for the future. He must know their earning target for a year, their revenue base, plans for their sales promotions etc. Fortunately, it is very easy to get all these necessary information that one needs are available on the internet. With careful study and planned investment strategy, growth stocks can really take somebody from zero to hero within a little space of time.

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If you have some extra funds, the best way to increase your wealth is to invest it as soon as possible. First, you need to decide how much you want to invest. It depends on how much you are comfortable with.

To get started you may want to put a portion in something safe such as a certificate of deposit. Investing in the stock market will allow you to choose how much risk you want to take. If you want something with a bit of security, choose a company that provides a service people rely on. Something they will always need. Then do some online researching to see how that particular company has done in the past, you may not see a large return but it should be consistent.

You may want to use a portion of your money to purchase stocks that have more risk. They have a higher rate of return, but you will need to monitor them. You need to sell when they are high, make a profit and reinvest. Keep in mind that you are in this to make money. Do not get emotionally involved; do not hang onto a stock because you want to show support for a company. Likewise if a stock begins to dip, do not sell in a panic, it may come back up in a few days; you do not want to loose money.

Once you decide where to invest money, use the Internet to keep on eye on it, you can also buy and sell your stock online.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

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Einstein's theory of relativity can be applied to stock market investment decisions too. In economic terms it is called "opportunity cost", as investing in one company costs you the foregone return you would have had from investing in another company.

So how do you make the most of your decision and minimize your opportunity cost?

When deciding between investing in a number of options on the market, it is always important to have a comparable ratio. As the stock markets grow and because all the listed companies fundamentals differ so widely, the use of a comparable ratio becomes increasingly important when making informed investing decisions.

I have come up with what I feel is a robust comparable ratio (even across sectors). Let's call it the "Relative Value" ratio.

The ratio aims to seek the highest dividend yield with the highest undervalued growth rate.

For each company perform the following basic steps:

1. Calculate the Price Earnings (PE) ratio of the share. This is the following "Share Price" divided by "Earnings per Share"

2. Calculate the long-term growth (G) rate of the company. This single number will be the hardest to get and involves significant research and judgment. If you are not confident enough to forecast your own one, then perhaps call your broker and ask for his one or use the brokerage census growth rate.

3. Calculate the Price Earnings Growth (PEG) ratio. This is the "PE" divided by the "G".

4. Calculate the Dividend Yield (DY) of the share. This is the historic dividend paid divided by the share price.

5. And finally, calculate the Relative Value of the share. This is the "Dividend Yield" divided by the "PEG".

Can you see how the lower a stock's PEG is, the less you are paying per unit of growth of the company...?

Also, the higher a stock's DY is, the higher yield you will be making from the dividend flow from your investment and the the higher a stock's DY is and the lower its PEG is, the higher the Relative Value ratio will be.

Let's take an example: say you wanted to invest in either Standard Bank (SBK) or ABSA (ASA) on the JSE Securities Exchange (the South African stock exchange).

Standard Bank has a PE of 8.38, a DY of 3.29%, and a forecast growth rate (per brokers consensus) of around 15%. Thus Standard Bnak's Relative Value ratio is 6.98 (= (3.29%) / (8.38 / (15% x 100))).

ABSA has a PE of 6.81, a DY of 5.86%, and a forecast growth rate (per brokers consensus) of around 13%. Thus ABSA's Relative Value ratio is 11.19 (=(5.86%) / (6.81 / (13% x 100))).

Therefore it looks like ABSA is the best option. It appears that it will give you a better yield on your investment in terms of a balance between dividend and capital growth.

In closing, although the Relative Value ratio is a useful tool in an investor's arsenal, it does not replace the need to research and understand each company's fundamentals prior to entry. There are many assumptions that the Relative Value ratio uses in its goal of comparative investment analysis, and the most significant one is the use of historic information. Remember that the past is not always a reflection of the future and always use your own judgment when coming to a decision.

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Are we there yet? Have we reached financial Armageddon? Should we all just sell everything put all of our cash into gold bullion, buy a lot of canned food, weapons and get ready for the new Dark Ages?

We have achieved new levels of irrational depression. We all just want to run away. We thought we couldn't take any more pain and today the stock market heaped some more pain on the Bulls.
The Bears loved the action in the stock market today, this month, and this year! I'm a fan of the NFL Chicago Bears and the U.C.L.A. Bruins. I'm not in favor of the Stock Market Bears who are having their time now. Let's face it, the time of the Bears is coming to an end.

You want to know why, don't you? A great sale of money generating machines doesn't come along that often. Last time the S&P 500 was at these levels the earnings yield was 5.2% in 2002 or in 1997 the earnings yield was 5.1%. If the S&P 500 stays at this level through the end of the year the earnings yield will be around 9%. If the S&P 500 remains at this level through next year the earnings yield will be 8.7%.

I believe in regression to the earnings yield. If the normal earnings yield is 5% the S&P 500 would have to rise to 1346.15 next year. 1346.15 is 66% higher than the closing value of the S&P 500 today.

If an investor sells now, they clearly didn't identify the top of the market last October. They obviously believe the market is going lower and they will get back in before the market goes above where the market is trading now. This is a fool's game.

I don't know if this is the bottom of this bear market or if we have another 10%, 15%, 0r 20% downside. I know valuations are stretched to the downside. I believe if the market regresses to a more normal level of valuation we are looking at a move up of more than 60%.

Think of it this way. There is a 40% likelihood of a downward move of 15% and a 60% likelihood of an upward move of 60% or greater. The net result of these two outcomes is a positive gain of 30%.

This means you can't go wrong with long now! Buy low sell high is the best way to make money. Prices are low, so buy.

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Investing in stock market is not easy during recession times. As a stock market investor, one needs to have a lot of knowledge both theoretical and practical to survive in the present day stock-trading sessions to make some money in the bargain. However, there are a few exceptional people, who have this stock market acumen and are ready to play the game with high stakes. These people are not only knowledgeable but are also supported by a few reliable information channels, which gives them a few tidbits of credible information regarding a particular stock or company. Depending on these helpful resources and combining the same with their own study of stock market, these people take decisions whether to invest or not at a particular point of time during trading sessions. A better option for a common man, who does not have much knowledge and access to different kinds of credible information resources, is to invest through mutual funds. Read further to know why...

During these recession times, everybody is in doubt whether this is the right time for investment or not. Frankly, from a common-man's advantage point of view, investing in stock market should be a long-term strategy instead of short-term. Short-term investing is for those people, who are game for day trading. Moreover, to participate in day trading for making money, one definitely needs to have to have considerable amount of knowledge of not only about the stocks s/he is buying, but also about those companies who had issued these stocks, etc. For a layman, it is not possible to spend a considerable amount of time to study these stocks and the relevant companies to make a few bucks through trading.

Sensing the financial potential of people, who have money but no stock market knowledge, a few investing companies created mutual funds. These funds help people who have money and want to have a share in the stock market profits, but no knowledge of stock trading. In addition, in the process of creating wealth for the common layman investor, mutual funds make money for themselves by charging for the services offered and through other means. Mutual funds offer schemes, where one can invest money both in small amounts throughout the year and as a one-time investment in a particular year.

After getting considerable amount of investments from potential investors, these mutual fund companies start investing on behalf of these investors, strategically, in stock markets to create wealth for the investor. Mutual funds investments in stocks depend on the category of which it belongs to. A few funds invest only in Bonds, whereas some other funds invest in securities, a few other invest in a specific sector-related company stocks, etc.

On the whole, any person who is interested in stocks and have money to invest, but has no knowledge in stock market, can do the same through mutual funds. There are so many mutual funds in the present market, which have been performing consistently since their inception. It is always best to subscribe only those funds, which have shown consistent track record instead of opting for new funds in the market.

Always remember that the past performance of a mutual fund does not guarantee its future performance also. And the performance of a mutual fund, quite often, depends up on its Manager, who is the main decision-maker, and the strategic investment policy s/he follows.

Happy investing!

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The economy is bad these days as anyone can tell. It is now time to become as recession resistant as we can, for now, and in the future as well just in case this happens again. To prepare we must first look at the problems that are currently making the recession so brutal. We must also look at past history so we have an idea of what will happen in the near future. The first problem that we have is simply high volatility in the markets that sell any type of product or service. The volatility of the markets can be seen in commodities market and especially in oil, which is a primary energy commodity. Oil has collapsed in price from all time highs, which shows how volatile and hard to predict these markets now are. The second problem is that most companies are literally receding and getting smaller by firing employees and suspending operations.

Despite these bad economic times, there has never been a better time to try and buy almost everything you see if you can afford to invest. The price of everything is going down almost everyday making it a better buy. No matter what someone says the price of something is like a house, or a business, you can almost always get them to take less as well. This gets me to my first rule of surviving recession, and that is no matter what price someone has for real estate ask for at least 5% less then the asking price. If you are buying a house or real estate the 5% taken off will help cushion you in case real estate falls anymore then it has. My second rule is to buy stocks constantly as much as you can, in the most SOLID companies that you can find. You have to start investing in companies that are the hardest to compete with, and keep buying them EVEN if they get cheaper. From history we know that even the worst recessions eventually end allowing the markets to rise again.

The things that you shouldn't do include trying to make a quick buck timing the markets, or investing to make a trade. You should be thinking that you are investing and buying businesses not investing in the stock market for some quick cash. If your are buying investments and thinking that you will flip them for a quick dollar you had better wait until this economic crisis clears, but for those that are patient and willing to hold, they will probably make a fortune in investing in the stock market but that's my opinion.

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