Money doesn't grow on trees, but you can learn to invest and grow your wealth.

Stocks can seem intimidating to first-time investors, but they're really not all that bad. Stocks are actually rather simple to understand, once you know a few basics. And once you have those basics down, you can master the more advanced. To help convince you that Wall Street is much more friendly than you might think, we've created a MomVesting guide to stocks.

Even the most seasoned investor will tell you that knowing when to hold ‘em and when to fold ‘em can be a bit stressful. If the stock seems to be cruising its way into stardom or if it seems to be dragging its feet into the red a little bit further each day, choosing when to bail out can be tricky.

A Little Planning Goes a Long Way

One of the best ways you can stave off this adrenaline rush is to plan the dreams (and the nightmares) you have for your stock as far in advance as possible. This will help you maintain a level of objectivity.

Recently, I shared my 401(k) investment knowledge journey, pointing out my mistakes and regrets in not asking for clarification. Talking to a financial advisor about my 401(k) choices could have put me on track to understanding investments much sooner, but a feeling that I should have known kept me from seeking help. My stock journey was somewhat similar, yet different. My story may help you in your own journey to stock ownership, so let’s take a look at my life in the market.

Fear of the Market

Does anyone else remember those gold prospector commercials that were all over late-night TV about five years ago?  They gave you a green pan for sifting and a booklet that gave you great places to look all across the country.  Supposedly, with those two items in hand, you were set for getting rich! 

Once again, gold fever has taken hold.  The only difference is that it’s not just the outdoorsy-type getting in on the action.  With prices tripling over the last five years, everyone seems to be seeing gold.

Why Gold?

Yesterday we talked in general about portfolio allocation, particularly as it pertained to stocks. It can be confusing to decide what to do with an investment portfolio, especially if you are new to the idea of investing.  Two simple rules to help with the decision are: the 100- Age Rule and the 120- Age Rule.  Let’s look at some of the ideas behind each rule to help you decide your best course of action in setting up your portfolio.

100 Minus Age Rule

The term stock allocation sounds rather imposing. In reality, it represents a simple question that we all need to answer: What portion of our portfolio should be in stocks versus other investments?

Why Stocks?

Few things in the finance world are as confusing as shorting a stock. You may not have even ever heard of "shorting," but it can be an important component of your investment portfolio, so let's look a little closer.

What is Shorting a Stock?

So, you've decided that one of your New Year’s Resolutions is going to be investing in stocks.  Learning about how to analyze and value stocks is a lesson that pays off tremendously over the course of an investing life. Of course you will have to do your homework first.

Stock analysis can be broken up into two camps: fundamental analysis and technical analysis.  While many people will get caught up in which is "better," first we need to understand what each one is.

Fundamental Analysis

Exchange-Traded Funds, or ETFs, can be mystifying to the most hardened investor. If a mutual fund and a stock were to fall in love and have a baby, ETFs would most likely be the bouncing baby produced. ETFs are like mutual funds that are traded on a stock exchange and can offer significant flexibility to your portfolio.

What is an Exchange-Traded Fund?

We talked earlier this week about mutual funds. Historically mutual funds allowed us to pick a fund manager and have him manage our funds, as well as other investors', in a large pool. In recent years however, a different kind of mutual fund has become very popular, the index fund.

What is an Index Fund?