Making Money in the Stock Market

How to know if there is a safe stock to buy in this economy. It takes an optimist to use the word "safe" in this tanking stock market. Those who have been making money over the last several years, say, since the early nineties, are now finding that the stocks that were growing and showing great profits are the same ones that are now dropping fast. It seems that the more the financial analysts speak about the declining stock market, the worse it gets. And, of course, most everyone knew that when the new administration was sworn in, there would be pessimists who didn't vote for the party and their negative comments cause the downturn in the stock market to be even greater.

Aside from the extremely wealthy, the billions of dollars that have been lost in the stock market during this recession have hit the American consumer's financial picture pretty hard. Some of the more bullish who watch the stock market can see real buys in some of the technology stocks that have plummeted in recent months. What a great time to buy, just as an example, Apple stock. Their new low is an opportunity for buying and holding on until this whole recession thing begins to improve, probably in the 4th quarter of 2009. Their I Phone is sure to bring sales back up again and prove to be a "boon" for those who can buy the stock at its low point, while the public lacks confidence in the market. Additionally, health and energy companies stand to stage a comeback.

Should you Hold or Fold with the stocks that you own?

Many of the stocks that have performed so well over the last 15 or so years will undoubtedly bounce back, at least in part, as the recession eases. Holding onto some of the stocks that have served you well, particularly from the standpoint of good dividends, is a smart move in this stock market debacle. And, too, buying a few more shares of this particular stock, while it's at a low price, will prove a smart investment in a year or so.

In the case of stocks in your portfolio that have shown lower than expected earnings and show little or no signs of improvement for the future, eliminate those shares from your portfolio. Sell them before the price drops any further.

Investors, who have enough capital to afford to take the risk, will even borrow money to take advantage of great stock market deals. In some cases, growth can run as much as ten or fifteen times investment. This is a form of financial leverage, but is not recommended for the average investor, since picking the wrong stock could be financially devastating.

In the stock market, timing is everything. Keep a close watch on the Dow Jones Average and the Nasdaq. At the present time, the numbers are more often down than up, and the trend has a great deal to do with what's happening in Washington, DC, as much as on Wall Street.