Expert: Paul Henneman - 7/19/2007

Question
hello

i want to ask some questions about investing

when i asked a broker he told me that at my investing he will take (5/1000) of each 1000$ i invest , so is that realy or he is a fraud ?

whats the condition that it have to be match me to invest in stock (new investor) ?

what can i do or learn to be good short term investor ?

investment in stock need experience ?

whats the minimum range can i invest (some said that i can share with 100$ only) is that true ?

whats the difference between bears & bulls ?

whats your opinion about penny stock ? can you give me recommendation ?

wish to hear from you soon
thanks

Answer
Thank you for your questions! I will do my best to provide some helpful information, but some of your questions are very broad and would require too much space to answer. I will at least try to offer some introduction information.

Brokers do generally have fees around what you are describing. You can always trade your investments yourself through an account on a website like www.etrade.com or www.scottrade.com if you want lower fees.

The best thing you can do to learn about being a good short term investor is to read about it. I would start with the book "Investing for Dummies". This is a great introduction, and will give you a basic understanding of most forms of investing. Then I would read any of the books by William O'Neil, the founder of Investors Business Daily (IBD). He is perhaps one of the best known and successful short term traders. His books outline in detail his approach to short term investing.

Investing in stocks does need experience. If you simply try to invest without experience, you may make some money, but it is much more likely that you will not do well. I would strongly urge you to spend a few months reading and learning about it before you actually invest. A good tool is to use a free website like http://finance.yahoo.com to set up a test portfolio and track your investment ideas for a period of time before you actually begin trading.

There are fees associated with buy and selling investments such as stocks and mutual funds. Because of this, and the minimums that many investment services have, it is generally advisable to have at least one or two thousand dollars before you start investing.

"Bear" is a general term that indicates the market is going down. During these time periods it is more difficult to make money, as the stock market is losing value. Some companies may still be good investments, even during Bear market times.

"Bull" is a general term that applies to when the stock market is going up in value. We have basically been in a Bull market for several years now.

Penny stocks can make you alot of money, but they are very risky.  I would not suggest investing in Penny stocks until you gain some experience. If you make a bad decision, a penny stock could really make you lose most of your investment. It would be best to start with more stable stocks, and then begin trying some small investments in penny stocks in the future when you have gained some experience.

I hope that this helps! Please do not hestitate to follow up with me if I can be of any additional service,

Sincerely,
Paul Henneman
ValuEngine Inc
www.ValuEngine.com