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Originally Posted by KnifeMissile
The emphasis is mine.
I don't know, I've (briefly) talked to two different investment companies in my life and both gave me estimation of future profits, which is why I thought they did such things.
As for trading stocks, I can look at stock prices and see how volatile they are and conclude that they are high risk. Prey tell, how do you avoid risk in such an environment? If your suggestion of "educating yourself" is honest, why don't you point me in the right direction? How does one learn about such things?
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The volatility of stocks is not what makes them high risk; it's lack of an effective money management strategy that makes traders high risk. The biggest problem most traders have is their failure to limit risk, which is secondary to their reluctance to admit they are wrong and close a trade at a loss. If you structure your trades so that no trade can ever lose more than 3% of your portfolio, well then it doesn't really matter how volatile a given stock is. As I said I am risk adverse, so I risk less then that with each trade. My position sizes may be large or small, but I"m out of a trade well before a loss of 3% hits my portfolio.
I enjoy reading Bill Fleckenstein (Fleckensteincapital.com) and Real Money (RealMoney.com). James Deporre in particular on the Real Money site has great insight for strategies for small traders as well as effective risk management. They're both pay sites but I know at least Real Money offers a free trial. Give it a shot!