The Truth About The Stock Market
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The truth about the Stock Market
Investing in the stock market can be a very lucrative and life changing move. The right choice of stocks
and patience can prove to be worth your time in many ways, but the truth is that the stock market is not
for everyone and definitely not for a young Soldier trying to turn a quick profit. Making any real money in
the stock market requires a significant investment by this I mean at least $50,000 and weeks or even
months of research in order to choose the right company to invest in. The stock market is not like you see
on TV where your average Joe puts a few hundred dollars into the market and in turn makes $20,000
overnight, it just does not work that way just consider the following:

Quality Stocks- When you decide to gamble with your hard earned dollars, you want to invest in good
companies that have been around for a while and have proven that they can get through tough financial
times and reemerge to turn a profit. The problem is that quality stocks cost a lot of money, for example
McDonald's stock ranges from a low of $39 to a high of $60 PER SHARE, expensive but you at least have
more security over a newer company at a cheaper price. Remember if you are going to do it then invest in
a good company at a low price.

Pink Sheets (Penny Stocks)- Around the web you will see advertisements or receive an email that
promises a quick buck for investing in a new company on the stock block. Companies listed on the pink
sheets are not necessarily companies that just got started but are new to the market. Share prices for
these stocks are usually $0.20 to $0.80 which is very affordable for people like us but the problem is that
a lot of these companies tend to disappear or go out of business overnight so one must be very careful
and research before you invest.

Email Tips- A fairly sure way to lose your money is by believing in e-mails that claim to have a "hot tip" for
the next big thing expected to rise %400 profits in the coming weeks, please delete these e-mails they are
not worth it.

Broker fees- For the small timers, broker fees equal loss. They range from $7 per trade if you make 25
trades per month or more, if not the average is $15 or a bit cheaper if you use USAA. Remember that
between buying and selling your stock you are looking at a $30 loss so you can do the math for small
profits and it is usually not worth the risk.

Patience- When dealing with stocks one must be patient and avoid selling the stock for a lower price, this
is especially difficult for someone on a military budget, car trouble, little emergencies here and there may
force you to sell off your stocks for a lower price I'm not saying that this applies to every Soldier but this
has been my experience so if you decide to invest then you must be prepared to deal with all those
unexpected expenses without dipping into your stocks.

Alternatives- If you really want to invest in the stock market then you might want to open a mutual fund
or a Thrift Savings Plan TSP and add a portion of your monthly income. Mutual funds allow you to invest
your money in a variety of companies so that if one of those companies does not make a profit there is a
good chance that the others will still turn a profit for you, either way you are safer with a mutual fund or
TSP

Whatever method of investing you choose for your needs and budget, please research and plan
accordingly also it would not hurt to talk to a finance counselor at your local Army Community Service
ACS to help you come up with a plan.
Soldiers and the stock market
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