Your Reason To Buy Lesson 112

  There are many companies, stores, or businesses familer to us that we spend money to fill our needs.
We grow familar with things that have been around for a long time, and feel confident in the business
continuing to survive for many years and we expect it will profit and grow.

Some investors buy stocks on "familarity," and are comfortable with time in existance being the reason the
company will make them profits. Normally I'm asked the question, why did my new stock go down in price,
now I'm negative $300. Another says, my stock keeps going down "should I sell?"
Sometimes the comment to me is, I thought that the stock would do well because I was promised this was up
and coming and my money would grow. "I have a pamflet here that explains everything."

  It's unfortunate that like everything else that needs to be learned, buying stock looks easy, and this causes
the new person investing online to lose money. How hard can it be? Open an account, click your mouse on
the stock you like and presto, your making money. Now you expect your stock to zoom upward, but
surprise, your stock is sinking faster than a rock in the water. 

First thing we need to do is learn the basics, that need to be done, to prevent the loss of principal (the money
you bought stock with). We teach this and more at http://www.youcontrolinvesting.com/, and it's easy. There is nothing "hard to understand," or "too complicated" about buying stocks that can make you money. Many
people do it everyday, from professionals, to the person at home on the computer trading on line building a
retirement account.

In the beginning of this lesson I mentioned "familarity" as being a reason people use to invest in a company's
stock. Questions need to be asked. Even though the company has been around for many years, how well
financially are they doing today. As we know the economy has slowed, people are not working, and are
buying less. By looking at a companies "financials" we can learn if the company is growing financially, and will
stay solvent, or has already filed bankruptcy. Look at General Motors (GM) for an example of this. If you
had invested here, you would have lost your money. Just by looking at GM's financials you would not have
invested money here, and would have prevented the loss of your money.

  The second item at the beginning of this lesson was "price." Why did the price drop lower? Was it because
I bought it (stock always goes lower because I buy), or is there some other reason. Know that you cannot
influence the planets and the stars, and what you do in the market (buying), is not the reason your stock price
fell.  Knowing this is great, because now you know, you can make money in the market.
 
On price we need to find out what the stock is worth, not the price you see on the computer screen (that's
the price the last person was willing to pay). What it's worth is dependent on growth rate in the past, and
future expected growth rate. The other thing to look at is "financials," are they good or bad. Not all
companies doing the same, are worth the same.  Example Rite Aid Pharmacy; filed bankruptcy, and
Walgreens Pharmacy, doing great, which as I write, I own. This is another item covered in our course at
http://www.youcontrolinvesting.com/ .

  People will try to sell using promises and printed material like a "pamflet." It is your money, and research is
required at all times before giving it to someone, or in this case buying a stock. Remember that investors
were asked to invest in an oil well years ago, and lots of money would be made when oil was hit (the
promise). If your stock never hits oil...You lose.

  To learn more about the proper way to invest in stocks, and also understand how to better manage your
workplace retirement account, (help it grow), visit us at http://www.youcontrolinvesting.com/. We also post
important information that changes quickly at www.Twitter.com/StockMktTeacher 

 We welcome your questions and suggestions.

Good Investing,
 
  Bruce Cortez, Instructor
 
Bruce@YouControlinvesting.com
 
http://www.youcontrolinvesting.com/