Introduction

My intention with this blog is to help people understand the stock market and also open a debate about stocks and for everyone to learn from each other. I always tell people that if you can do basic math you can understand the stock market. So at any time if you have questions about a single stock or how something works please ask. I will do my best to answer your question or find a site that can answer it better.
My first entry for my blog about stock is going to basically be a little background on my trading. I have been trading for about 10 years now, my best year was in 2000 when I made about 23% and my worst year was 2008 when I was down 1%. Now with that said those numbers are based upon my account balance from the beginning of the year. A lot of mutual funds will post their returns based on how they did verses the S&P 500 Index. For example, if they were down 5% this year than they were proclaiming that they beat the market by 41%. Now for any good trader you always want to beat the S&P 500 Index, because if you can’t than why spend all the time and effort, when you could just invest in the S&P 500 index fund. Which has the ticker symbol (SPY).
My first thought for today is a lot of friends of mine have asked me if they should stop investing money right now due to the huge retreat in the markets and the uncertainty that is still ahead. My comment to them is that they should continue investing, but they should also look at their portfolio to make sure they are diversified and that the companies that they invest in are going to be around for years to come. As soon as I tell them that they fire back with the next question. How do I know the company I invest in will be around with all the companies going bankrupt lately? I tell them to look at the balance sheet of the company. If accounting is not your thing, this is one form you will need to learn how to read. It tells you how much the company is making and also how much debt the company has. Most companies I invest in have a good cash flow, with very little debt. A company that can show good cash flow and a reduction in debt, or no debt at all, will be around for the long term.