Stocks vs the stock market

When people say that you can't make money in the stock market, it usually means that they lost money in the stock market themselves or they think the stock market is too risky for them to be in. There is a big difference between investing in the stock market through a mutual fund or ETF and buying an individual stock. Let's take a look at a few examples. If you bought the popular ETF (exchange traded fund), S&P 500 "SPY", you would be up a little over 15% from one year ago. But in the past 3 months you would be down about 6.5%. However, if you bought shares of Apple stock, "AAPL", you would be up over 85% from a year ago, and up nearly 13.5% in just the past 3 months. By comparison, AT&T stock, "T", is up only 0.64% in the past 12 months, and is down 2.82% in the past 3 months. That doesn't mean you didn't make money with AT&T however, because AT&T pays a 6.67% dividend. Apple does not pay dividends. So for people looking for income in a world where bank CD's pays 1-2% interest currently, AT&T might be a nice place to make some quarterly income. In fact many savvy seniors have shares of this stock just for that reason. But if you're looking for growth, Apple may be a better bet for you. When looking at stocks, you generally need to have a longer time horizon to overcome market volatility and short term price swings. But if you stick with it, buy more shares when the markets correct, and have realistic expectations, you can come out ahead of CD's by a long shot. Don't listen to your neighbor, do your homework and talk to people who can help you with your investments. It's your money!