Stocks 101: A Beginner’s Guide to Investing

Stocks are one of the most popular investing tools in the world, yet there is so much uncertainty surrounding them. If you don't know the purpose of stocks, or the different types of stocks available, don't worry. You are not alone.

Luckily, the financial advisors at American Investment Planners, LLC are here to offer their professional insight. Here are some of the stock market basics every investor should know:

What are stocks?

Stocks are an equity investment that represent partial ownership of a corporation. If a company is divided into 1,000 shares, and you own one of them, you effectively own 1/1,000th of that company.

What types of stocks exist?

There are two main types of stock, common and preferred.

• Common stocks: owners are entitled to vote and may (or may not) receive dividends.
• Preferred stocks: owners usually do not have voting rights, but have priority over common stockholders when it comes to dividends and asset liquidation.

Why do investors buy stocks?

There are many reasons why an investor may purchase a stock, but three of the most popular are:

• Capital appreciation: occurs when the stock rises in price, increasing the net worth of the owner’s portfolio. When a stock increases in value, the investor may look to sell it for a profit, or continue to hold onto it in hopes of continued success.
• Dividends: some companies regularly distribute their earnings to stockholders in the form of dividend payments. The more shares you own, the more money you will receive.
• Company control: stockholders have the ability to vote on management issues at annual shareholder’s meetings. The more shares you own, the greater your influence.

Want to get started investing?

Investing in stocks involves risks, including loss of principal. Before you take a plunge into the stock market, it’s a good idea to sit down with a qualified financial advisor and develop a sound investment strategy. The professionals at American Investment Planners, LLC have decades of experience, and will work with you to craft a plan that meets your needs, goals, and budget. To schedule a meeting with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

Your Guide To Stock Market Volatility

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

People enter the stock market with the hopes that they'll see a positive return and make some money, so it's only natural for investors to want to get rid of stocks that are performing poorly. However, considering that investing is a long-term strategy, it's important to understand that stocks probably aren't going to perform the same week after week, month after month, and/or year after year. Not to mention, there's no way to truly predict performance either!

Despite the facts, though, we know that new investors may be especially tempted to completely re-do their portfolio when the stock market is volatile. But since this isn't recommended, here are some tips that can help get one through an economic event like this:

Understand what you're getting into.

The best thing you can do for yourself before you begin investing is to be prepared for unexpected market swings. It is not one bit unusual for a stock to go down one day and then skyrocket up the next, or vice versa - if you're prepared for this, it won't seem so bad.

Remember your goals.

There's no reason to not have short-term financial goals, but keep in mind that investing is really ideal for those who have long-term goals they're hoping to achieve. Just because a stock starts performing poorly in your twenties, certainly doesn't mean that it won't become a desirable stock by the time you hit your thirties - everything has its ups and downs!

Make changes only when necessary.

Again, just because a stock performs poorly one day does not mean you need to immediately make changes to your strategy. However, that also doesn't mean that you shouldn't make any changes at all. For example, if you have new financial goals for yourself or your tolerance for risk begins to change, it's okay to adjust your investment strategy to accommodate that.

Have a financial advisor.

Investing can definitely be tricky, which is why you should always work with a professional to determine how you should approach things. Not only can a financial advisor help you best figure out which investments you should put your money into from the start, but they can also provide you with informed updates about the stock market as time goes on and help you understand what's happening and what to expect/do next.

If you are currently without a financial advisor and would like to begin investing, make it your first priority to get in touch with one. We'll make it easy for you - just give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com! We are staffed with highly experienced financial advisors and have worked with generations of families all throughout the country on their financial plans.

To learn more about our specific services, please visit us at www.americaninvestmentplanners.com today.

The Truth Behind Stock Market Myths

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Like it would for any subject, word-of-mouth can have a large impact on whether or not people decide to get involved with the stock market - "this can happen, that can happen, and you'll definitely want to stay away from that." But while some of the widely accepted beliefs have some truth to them, there are also a lot of beliefs that turn people away when they simply don't have to.

Thanks to NASDAQ, today, we're here to clear up some confusion and share the real truth behind a few of the most common stock market myths - take a look below.

Myth: Investing is the same as gambling.
Fact: Having a share of stock means to have ownership in a company - at the end of the day, it allows the share holder to have a "claim on assets as well as a fraction of the profits that the company generates." With stocks, there is value created each and every day. On the other hand, NASDAQ refers to gambling as being a zero-sum game, where there isn't ever any value created. Essentially, gambling results in money being taken away from one person and handed over to another. When you really assess the difference between the two, it is easier to understand that the value that can be provided through investing does not compare to the chances you take when gambling.

Myth: Only brokers and the very wealthy make money through the stock market.
Fact: It doesn't matter what class you fall into or how much experience you have, the stock market provides opportunity for everyone. Especially since the Internet was developed and more people started to gain access to information about investing and the stock market, it has become much easier for people to view the data they need and access the resources they're looking for to help them understand how it all works. In fact, NASDAQ explains that individuals may even have an advantage over institutional investors since they can more-so afford to focus on long-term goals. Thus, no, the stock market is not just for certain groups of people.

Myth: What goes up, must come down.
Fact: This may be true in terms of gravity and physics, but you cannot carry this same principle over to the stock market. Ultimately, the reason that a stock does good or bad has to do with the company - if the company is run well, why wouldn't stock continue to go up? While this isn't to stay that a stock that goes up will never come back down, you would be doing yourself a disservice to assume that a negative turn of events will always follow a positive one.

As professionals in the financial planning industry, we know that there is a lot to understand about the stock market and investing, and we know that it can be quite confusing unless you've studied it all for a long time. That's why we want to help!

Whether you're just about to get your feet wet in stocks or have been investing for years, allow us to work with you on developing a strategy that can provide you with a financial benefit in the long run.

To meet with one of our investment advisors, please give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com today.

Investing involves risk, including the possible loss of principal. Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments. An investment in the stock market should be made with an understanding of the risks associated with common stocks, including market fluctuations.

Why Does The Stock Market Fluctuate?

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

You don't have to be a seasoned investor to know that stocks go up and down - just listen to the news or walk through Times Square in New York City and view the board with all of the stock market updates. But despite the fact that this is normal and something all investors should expect, a common question surrounding the topic is why? Why is it that stocks continue to go up and down every day, each week, and so on and so forth?

Truth is, one of the main reasons that the stock market fluctuates is because of an idea that you're probably familiar with - supply and demand. Essentially, when there is more demand for a stock and more people want to buy it than sell it, the price will naturally go up. On the other hand, if more people are trying to sell a stock than buy it, the price would be expected to fall.

Now we know your next question - what makes people want to buy or sell a particular stock? Ultimately, investors look at a company and try to determine its worth before deciding if it's the right company to invest in - for example, they may consider if there has been positive news or negative news surrounding the company lately. In this case, one of the main things that investors consider is a company's earnings. Companies that go public must report their earnings once each quarter, which is how investors can get their information about whether or not a company is on a good path or a bad path.

Although these ideas are some of the top contributing factors to why the stock market fluctuates, keep in mind that no one can really say for sure why stocks change and at the frequency that they do.

If you're new to investing, we know that the cause behind stock market fluctuation can be confusing despite the amount of research you do on the subject. That said, we want to help clear up any questions you may have about the stock market, as well as work with you to figure out an investment strategy that will work in your favor!

To get started with an advisor here at American Investment Planners LLC, please give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com - we'd love to hear from you!

The Trouble With Timing The Market

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's important to keep up with trends in a number of situations, but where the market is concerned, this doesn't necessarily hold true. While yes, it's natural to try to repeat history or want to adjust your portfolio because you suspect that the market will be at a high during a certain month or two, the truth is that trying to time the market can actually be extremely detrimental to your long-term goals.

An article from CNBC is quoted as saying the following:

"Trying to time the peak in any market cycle is no easier than trying to time the trough. Markets can behave in seemingly irrational ways, and these moves can last for long periods of time."

Since no one can predict external circumstances that heavily impact the market, it would be pretty difficult to pin point an exact period of time when the market will be at a high or a low. 

So what can you do? A suggestion from the Huffington Post is to use a strategy called "time in the market." Put simply, this refers to spending more time in the market and not taking yourself out of it just because it experiences a low every now and then. Of course we all have our short-term goals, but when it comes to investing, a better approach is to focus on the long-term. The Huffington Post explains:

"You don't see a slow, steady and consistent increase or decrease in the market over a specific time frame. Anyone who invests knows the market is extremely volatile and prone to drastic movements. This makes it even harder to time the market because you're dealing with a roller coaster of an investment ride."

As such, your best bet is to spend as much time in the market as you can, since you may be more likely to see the return you were hoping for by sticking it out through the highs and lows rather than making drastic changes to your approach to try and hit the market at just the right time.

Here at American Investment Planners LLC, our team has an incredible understanding of the market and knows what you need to do in order to achieve financial success. So, let us help! To learn more about our financial planning services, visit www.americaninvestmentplanners.com or call (516) 932-5130 today.

Reasons Why You Should Start Investing In November

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's never too early or too late to start investing, but believe it or not there is a certain span of months throughout the year when getting started is ideal. When is that, you may ask? The answer is any time between November and April; according to U.S News and World Report Money. Even if you are actively investing and have an account such as a 401(k), now is a good time to start looking at where your money is currently allocated, as you may want to make some changes. Here's why:

Just like businesses, sports teams, even students in school, have their ups and downs, so does the stock market, and research has shown that the U.S stock market has "consistently produced outsized returns" from November to April when compared to May to October. Knowing this, it seems only obvious that now is the right time to start looking into your investment options. While you may not have imagined the stocks to be something seasonal, the truth is that they are! This is in part due to the fact that as the year comes to a close, some people find themselves with extra money that they've saved or year-end bonuses that they can comfortably pass on to the stock market. Additionally, it may have something to do with the fact that tax season occurs during this window, which may encourage more people to be funding accounts that could directly effect the stock market.

The moral of the story is that if you haven't invested yet this year, now is the time to start thinking about doing so! To read more about why this six month period is a game changer for investors, check out this article from U.S News and World Report.

Once you've made the decision to start investing, or if you already have but need some guidance on your current investments, don't hesitate to contact us at American Investment Planners LLC! Financial planning is our only business, and it is our goal to assist others with the development and implementation of their financial plans.

For more information about the services we offer, please visit our website or call (516) 932-5130 today.