Want to get good returns in stock market!!

[baliya]

Hi all, I want to earn good returns from the investment in the stock markets but do not have a clue as where to invest properly. I have been watching the failures and successes of a few people which made me come here. I need suggestions that can help me to get a good hold in the stock market. Thanks in advance!

[MontrealStocks]

Get yourself in bonds and Stock indexes(25% and 75%), unless you're willing to go through hours upon hours of literature, learning the difference between speculating/investing/trading(this forum is a trading forum most of all, not an investing site), then I really suggest you don't do your own stock picking. You're looking at investing since that what you said, just getting adequate results on your returns is a decent feat in itself for an amateur, 95% of mutual funds haven't been able to beat the market through out the years. There's no reason for you to think you can be better than people who do this for a living. A stock index fund will get you the largest possible diversification as well as get you the returns of the market as a whole. Bonds that you keep until maturity will give you a stead flow of income.

If you really, really want to try stock picking. Try paper trading on investopedia.com for a year. After that keep 10% of the capital you want to invest and try with that. If you fail, oh well. If you're satisfied and don't mind reading annual reports and at least five years worth of financial numbers and proxies(if you're not willing to go through that effort to invest[not trade, big difference] then forget stock picking) then go for it.

Also, remember that everyone feels the need to speculate. The number of (unsuccessful) day traders and young guys going for penny stocks shows that. Keep some money in a different account specifically for your speculation and have fun with it, just don't add cash to it.

[ron]

Bailya, welcome to WSP...

Montreal makes a valid point in relation to paper - trading...however, the bond market is a dffrnt animal.

Bonds right now or the bond mrkt for that matter - is actually offering a glimpse at what might be in store down the road. 10/yr Ts are now yielding less than the CPI....(n a 12-month basis inflation at the consumer level is running at a 4.6% pace....last three months the CPI has been rising at a 7.7% annual rate) - which in short translates "investors holding those bonds are actually losing $ due to inflation". for example..the 3-month T-bill is now selling at about 100 basis points. If you park your money with 1% interest against inflation growing by more than 4%, these T-bills don't have any buying power. The last time we were faced with same situation, (am not gonna bore u with the specifics) investors had to go through some really tough times.

Currently, considering mrkt conditions - stocks, imho, is the place to concentrate on: they are fairly cheap at these levels and have room to move higher in the coming months. Longer term, is a dffrnt story since the going for equities will likely be much more difficult. If we get higher inlfation that will coincide with contracting earnings multiples etc etc.....but nonetheless, focus initially in learning the basics then jump on that investment vehicle ul feel fits u better. hope it helps.