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Are Stock Tips For You?

By Michael Swanson

Many of those looking for a quick way to make money are quick to turn to the stock market by buying stock tips. Many sources and outlets are focused on this field, encompassing hundreds of classes, infomercials, TV programs, magazines, newspapers, and websites. At first glance, the stock market seems like the best possible get rich quick scheme. But, although its financial effects can be powerful, a potential investor must know his or her playing field. If a person is ready to listen and learn from various sources of investment information and stock tips, plus the occasional bit of luck, then that person has a chance at making money on the stock market.

Before even learning the basics of investing, one must understand the advantages and disadvantages tied to the stock market. For example, stocks provide advantages against other forms investments through three simple ideas: returns, taxes, and diversification. To start off with, stocks are known to provide higher return percentages than investments in CDs, real estate, or bonds.

These various forms of investment return about 5-7% a year, while stocks tend to return at 10%. After holding a stock for a year or longer, your stock profits are only taxed at 15%, as compared to the taxing of CDs or savings accounts, which as reach as high as 35%.

The diversification of stocks is also a much easier process than the diversification of a field like real estate. Despite a stock dropping as low as zero, one’s finances can be protected, providing that a wide variety stocks have been invested in.

Stocks don’t come with their disadvantages, however. The most important thing to note about the stock market is that it is rapidly changing and cannot always be predicted accurately. When a company goes out of business, their stocks drop to zero and their investors money drops to zero as well.

But, as mentioned, a diversified stock portfolio will defend one’s financial situation against this. But, no matter the amount of diversification in one’s portfolio, the risks associated with stocks will always remain higher than a CD or government treasury, both of which provide guaranteed returns. Everyone just needs some great stock tips.

For more on the stock market subscribe to the WallStreetWindow swing trading newsletter written by Mike Swanson.

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Topics: Investing | Comments Off

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Article Citation
MLA Style Citation:
Swanson, Michael "Are Stock Tips For You?." Are Stock Tips For You?. 6 Jul. 2010. uberarticles.com. 11 Sep 2014 <http://uberarticles.com/finance/investing/are-stock-tips-for-you/>.

APA Style Citation:
Swanson, M (2010, July 6). Are Stock Tips For You?. Retrieved September 11, 2014, from http://uberarticles.com/finance/investing/are-stock-tips-for-you/

Chicago Style Citation:
Swanson, Michael "Are Stock Tips For You?" uberarticles.com. http://uberarticles.com/finance/investing/are-stock-tips-for-you/


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