XIBO'S FAVORITE STOCKS

Below is a table of my favorite stock picks. Please note that I am not a registered representative, or a licensed stock broker, so anything you do with my advice is your own damn fault! Nyah! Nonetheless, I have been following the stock market for over a decade, so one could say that I know a thing or two. The selections below are not based on technical analysis, but rather my feelings about the fundamentals of each company. In some cases I have picked representative companies of a particular sector, and these will be grouped together. In a more perfect world, I would do this kind of thing for a living, researching stocks and making recommendations to people. But this world sucks, so I'll just have to do what I can in the meantime.

Xibo's Books

The table below will take several seconds to load. In the meantime, ask yourself, do you want to be rich? How badly do you want to be rich? Are you willing to work for it? Are you willing work really, really hard? Is it important enough to you that you will save 10% of your income each month? What about 20%? If you invest 20% of your income each month into the market, making solid buy-and-hold plays, you will find yourself growing wealthy over time. It's just that simple, but most people simply aren't greedy enough to do it.

Alternatively you could read books about Wall Street and see if they could give you more complicated advice. My favorite books are available on my Books page, or you could also search the mighty Amazon.

Wall Street is an exciting place. Anyone who is hiding their savings in their matress, or in a bank savings account, or in gold, is simply throwing their money away. Because of the time value of money, the only worthwhile place to put your savings is into instruments that have a good chance of giving you a return that beats inflation. Such instruments include real estate, collectibles, bonds, and so on; the most exciting instruments to invest in, of course, are equities and derivatives.

There are various ways to go about investing in stocks, options, and other derivatives, but the most straightforward and common way is to select a few mutual funds with low management fees. Always read a prospectus closely! Many "no-load" funds have management fees over 3%, and that basically means that whatever return you get is going to be 3% less than what it could have been otherwise.

If you're not a knowledgeable investor, the best thing to do is to simply set up an automatic deduction each month from your checking or payroll account and have it automatically invested into a small set of mutual funds. If you can participate in a 401(k) or similar plan, be sure to contribute the maximum amount each year. If you can't afford that, then stop living beyond your means! Unlike previous generations, we are not going to have retirement pensions to live on when we get older, and social security is an insult that even the homeless refuse to accept.

On the other hand, it can be very exciting and educational to invest and trade in individual securities. All you need is a good deep-discount broker, some knowledge, some time, some courage, and you're set! I recommend using well-established places like E*Trade, Ameritrade (Accutrade), National Discount Brokers, Suretrade (Quick & Reilly), and Datek. I used to like Lombard a lot but since they've become a minor division of Morgan Stanley, Dean Witter, Discover & Co. Inc., I think they've lost a lot of their soul.

One of the best places to go for market data and research is Yahoo Finance, although Lycos Finance is also developing into a similarly powerful service. Both are FREE! Both have portfolio management features, delayed quotes, charts, news, profiles, and research summaries. Another good source of news is the Wall Street Journal and CNBC. The journal has a print edition (not free) that's good for carrying around with you, but the online edition (cheaper, but still not free) is better for research. CNBC requires cable or satellite TV.

Avoid full-service firms like PaineWebber, as there is simply no way to justify their outrageously high commissions. Similarly, Fidelity and Schwab also suck, because they haven't truly developed the "Internet Way" of trading. You may want to split your account across two or three of the deep discounters; this is helpful in case one of them is experiencing technical problems.

If you don't want to spend a lot of time focusing on the market and messing with online brokers, a fairly simple way to make money with a decent degree of reliability is to get a mutual fund that uses the Dogs of the Dow strategy. Check out Payden & Rygel's PDOGX fund, or Van Kampen's Dow Strategic 5 Trust, a UIT. There are several others available in the market. Be sure that you go with on that has a low fee! Otherwise you're better off buying the 5 or 10 stocks using an online broker.

"The best broker is a computer."