the best way to learn is to lose a ton of money..
I never really had time to pay much attention, I gave money to a broker who invested it for me, and when the market started turning south in early 2008 he kept saying no, leave it in it will come back...well I started having lots of time because business went slow too..After a few weeks of paying attention to what was going on and seeing a huge cliff of permits that fell off it didn't take a rocket scientist to figure out what was happening, I called up the broker who kept saying no you don't want to do that..I ordered him to withdraw everything, within a month the market fell another 30-40%! Then I had lots of time to learn from Sept2008 thru almost all of 2009 before my business started to uptick again. Can learn alot how bonds, stocks/equities, banks and treasuries interact just by watching stock news programs like CNBC...but there are also alot of nay sayers on there that will make you think the sky is falling. Jim Cramer's Mad Money can be very enlightening as well, so far he has been spot on. Every stock will have its day in the "penalty box" and get hammred by sellers...if its a sond company and the balance sheet doesn't show a ton of debt, its a great time to step in..never buy when a stock is hitting its short term high, always wait for a good 10% dip... A great example of this was CREE LED lighting a few months back, they got blasted due to a short term earning disappointment, stock went from 70$ to below $50...bounced right back to $65 and should go higher as they have cornered the home led lighting market...that $15 bounce was a quick 30% gain in less than a month.
There is also a handful of high dividend paying closed end funds that invest in "junk bonds" etc, these yield almost 10% APR and pay monthly, tickers PGP, DHY, NHS, and a govt bond RCS. These bounce pretty regularly too, they are in the middle of the range now, let them come down 5-7% more, hop in, draw a nice monthly dividend for a while and when they go to the top of the range, sell collect your gain and wait for them to drop back down to the lower end of the trading range and hop back on the train and ride them again. I have done this with PGP outside of my broker for 4-5 years with $24-25 being the top range, bought tons of the stuff when it was down at $8 after cashing everything out of the broker...its now sitting at $21 and has been paying a constant dividend of $0.18 a share all along, never dropped its divdend in the down turn which equates to a 27% dividend when bought at that low $8 a share!!!
And now its worth $21 a share on top of that 27% dividend I've been earning!! I have simply blew away the profits I ever made off of using a knuckle head broker, I'd be not quite back to even it I would have stuck with the broker...instead I'm well over 30% ahead in total after being down nearly 25% when I cashed out from him and started learning.
I have submitted her picture to WEBSTERS DICTIONARY, in hopes of getting the definition of HOT, modified...
