Stocks Valuation

Not that long ago a really good friend of mine received a lump sum payment as a result of the fact that his uncle passed away. My friend got lucky and was mentioned in the will. The really tricky part for my cousin was trying to figure out what to do with all the newfound money. Needless to say, my friend suggested that I helped them. That’s what friends are there to do. So I told my friend that I thought he should invested in the stock market. He seemed interested, at the same time he also seemed a little bit skeptical. So he turned to me and asked whether or not people could really make money with online stock trading.

Anytime somebody asks me that question I cannot help but tell the story of a guy I went to college with who ended up making nearly $100,000 in the stock market following a very simple online stock trading program. I’m not trying to suggest that it’s easy to make money in the stock market, far from it. But I do think it’s important that we put everything into a certain context. My friend knows very little about investing. As a result, any mistakes that he makes may have a negative impact on his returns. It wouldn’t really be fair to suggest that the reason why my friend was in successful with the stock market was because the company he chose to do business with somehow led him astray. That just doesn’t make any sense. (more…)