'Trading stocks' and 'safe' are more or less mutually exclusive. Most individuals trading lose money. Sure, it is relatively easy to make some money in a bull market (when prices generally rise), but when it turns and becomes a bear market (where prices generally go down), a lot of people lose a lot of money.

One of thé best beginner trading books is 'Trading for a living' by Alexander Elder. I'd start there.

 

no offense to your dad. i'm sure he had a great deal of knowledge about investing. but what the "common investor" needs to understand about the stock market is that if you want safety and security, you need to play the long game. going all the way back to 1936, and examining every rolling 30-year period, the worst 30-year period averaged just under 8% per year gains. there is not other investment with that kind of consistent returns.

sure, there is volatility, and you can experience significant losses in the short run. i lost 40% of my portfolio in the first quarter of 2020. since then, i have regained all of that and then some. i am retired, and it would have been easy for me to panic and sell everything and get out of the market. here is an interesting graph looking at rolling 20-year periods.


notice that the four reddish colored bars represent two segments of the stock market - the s&p 500 index, which consists of the top 500 companies in the s&p; and the russell 2000 index, which consists of 2,000 smaller companies. both of them returned more than 6% per year during their worst 20-year periods. the s&p 500 returned more than 18% per year in its best 20-year period, and the russell 2000 returned more than 14% per year in its best 20-year period.

the average day-trader loses money. in fact, more than twice as many day-traders lose money than the ones who make money, and only about 20% of day-traders make enough money to live on. you are much better off just putting your money into a couple different index funds and letting it grow over an extended time period.

 

Other than big-pharma & war-machine stocks, crypto currencies are doing well just now precisely because it's so difficult to obtain reliable returns anywhere else - indeed, imho such frenzied speculation has fatally undermined the crypo currency model itself to the point whereby it is now scant more than just-another pyramid scheme for the profit vultures to prey upon.

Blockchain technology's fundamental flaw lies in its inability to seamlessly integrate in the 'analog' world i.e. translating nominal crypto 'value' into something you can casually use to buy food, guitars, beer etc in the shops. Until this becomes reality i.e. guaranteed & underwritten through international government agreement & leglislation*, it is no different than any other speculative stock and you should NEVER lose sight of this.

* which frankly is NEVER going to happen until the big banks co-opt it**
** or we have global social evolution

 

i agree with this. pyramid scheme is the perfect description. keep getting your friends to buy in and watch it go higher. if there's a limited supply of something and everybody thinks they need to have some, the price skyrockets. this is especially true for bitcoin. there are only so many bitcoins. so the more people who want to own some bitcoin, the higher the price per bitcoin goes. there's absolutely nothing backing bitcoin other than the distributed pool of money that has been put in by investors. when elon musk bought 1.5 billion dollars worth, that seriously jacked up the price. and now many financial institutions are jumping in, driving the price higher - maybe. otoh, a bunch of people who bought in at $4k are now saying "time to cash in" since they have made more than ten times their money.

but to your other point, paypal, square, and possibly even chase have moved towards making bitcoin an easily used currency. that will be the ultimate game-changer if it happens. but the u.s. government is going to have to do some enabling for that to happen. i'm still not sure where it's going to go honestly. in theory, etherium is a better design for a "world currency".

 

I'm quite sure that scoundrel Elon Musk noisily bought so much bitcoin in one go so that, once its value rocketed on the back of his highly-publicised backing, he can quietly re-sell his over the next couple of months at a very comfortable profit - indeed, i wouldn't be at all surprsied if he's discreetly dumped half his investment already...

 

Where does a complete newbie begin?

Where can I get the most up to date, relevant and specific to the point theory and practice?

Are there any paid video courses out there that can get me up to speed for understanding how the stock market works, all the different types of investment and day trading?

 

bitcoin ist the most unusable payment method ever created. a single bitcoin transaction costs around $18 and bitcoin alone needs more energy than the whole country of Argentina.
Bitcoin is an investment bubble with no real benefits.

 

there are several different "theories" about the best way to invest, so you should probably figure out what works best for your situation. i am primarily a "buy and hold" investor and focus my investments on passive income. i look for relatively safe, high-yield investments. these tend to grow very slowly (if at all). but they return a nice cash flow in the form of dividends or distributions. a smaller portion of my portfolio is devoted to stocks that pay a lower yielding dividend today, but have a history of increasing the dividends at a fairly rapid rate. holding onto these kinds of stocks can lead to a very nice cash flow 5 - 10 years down the line. an even smaller portion of my portfolio is devoted to speculative growth stocks. they don't pay any dividends, but might grow in market value by 50 - 500% over the next couple years. if you want more info, we can have a private conversation in the private messaging feature of this site.

 

n/t

 

Last edited: Feb 14, 2024

When I started out with eToro, I had similar concerns about minimizing risks. Arbitrage sounds tempting, but it's tricky and not always feasible for retail traders. What worked for me was diversifying and learning from a prop trading firm. Their strategies helped me understand the market better and manage risks effectively.

 

Last edited: Feb 16, 2024