What is the Stock Market?
The Neopian Stock
Market is one of the "games" run by Neopets, though to call it a game is a bit of a stretch.
Just like in the real world, you can buy (or invest) in parts, or "stock" in a Neopian Company.
However, unlike the real world, there is no limit to how much stock a company has in existence.
Over the course of the day the value of each stock fluctuates. It may increase in value, or it may decrease in value.
As an investor (someone who owns stock) it is important for you to keep checking on your investment's progress.
Where is the Stock Market?
Market's main page can be found here:
Alternatively, the Stock
Market can be accessed the "long way".
This is done by first clicking on the Neopets logo in the upper-left hand side of your screen, and scroll down to the lower right hand side, there is an icon of Nigel the chia.
Nigel the chia is essentially the Stock Market mascot. (or Stock Broker)
Also next to Nigel are the wordsNeodaq Index" followed by a number, and then another number in a bracket, usually either red, or green.
This takes you to the main Stock Market page. From here you can find stocks, read "news and research", look up a stock's profile, visit the Stock Market message boards, examine your portfolio in detail, buy stock, and access Neopets' limited Stock Market help.
Note: If you hit CTRL+D you can bookmark the main stock market page to make it easier to come back to later!
How to invest in the Stock Market?
First you need to visit: http://www.neopets.com/stockmarket.phtml?type=list&full=true to see what companies are available to be invested in.
For Instance: Neodaq Index 2100 (+3)
Any company that is currently selling for 15 or higher in the "Curr" column can be bought. Any company that is selling for 14 or less in the "Curr" column is ineligible for purchase until it rises to 15.
There is a daily limit of purchasing 1,000 shares.
If you buy a stock that is currently meets the minimum purchase requirements (15) it will take away 15 Neopoints for each stock purchased.
If you purchase your full quota for the day, it will cost 15,000 Neopoints.
Note: You do not get discounts for buying in volume.
To buy stock from the page above simply find a stock that is priced 15 or above in the Curr column
Note: For beginners, it is suggested to only buy stock that is at 15. If there is no stock available at 15, wait for half an hour or an hour and check back.
Click on the stock's name to be taken to the stock's profile page. This will give you a little bit of useless information on what the company actually (supposedly) does. Read it for a laugh.
Click on the stock's name once more to be brought to the actual buying page
On the buying page you will see two boxes: Ticker Symbol & Number of Shares.
The ticker symbol should be the acronym of the company you are going to invest in.
The number of shares box will be empty.
You can put any number from 1-1000 in the number of shares box (providing you have enough Neopoints to purchase that amount of shares)
Note: The Neopoints must be "on hand" and not stored in your bank account, or shop till.
Click on the "buy shares" button.
The appropriate number of Neopoints will be subtracted from your "on hand" amount and you will be taken to your portfolio page, where you can see the stock you have just bought.You will be able to see the total amount of stock you have purchased in the "holdings" column under QTY and the price you bought the stock for in the Paid column.
Note: After you have purchased more then one lot of stock in that company you will note that the number of shares increase overall in the QTY column. To view each individual lot, find the tiny arrow at the far left hand side of the column, right next to the picture. Clicking on the arrow will open up each separately purchased lot, and you will be able to see how much you purchased that lot for, as well as how many you hold in each lot.
Congratulations! You are now an investor in the stock market!
Now that you know the most basic "how-to" of investing, it's time to delve into the "why", the theories, and the strategies behind buying & selling stock.
Why invest in the Stock Market?
The stock market has the potential to offer you a bigger return on your Neopoints then you would have received had they been sitting in your bank account, collecting the maximum amount of interest daily.
It is important to note that stocks can (and do!) go down as well as up, and in the short-term, as an investor, the value may actually enter into negative investment.
I will offer two different examples;
Both of the stocks below were copied to this example as of 22nd August 2006:
POWR Power-X Corp. 579 NP per share
FAER Faerie Clothing Ltd. 6 NP per share
Assume that both were purchased using the minimum purchase requirements of 15 Neopoints…
So, using this example (which are the two most extreme differences in the stock market currently)
If you invested in 1 stock of POWR @ 15 Neopoints, you would have gained 564 Neopoints in profit!
Doesn't seem like a lot does it? But if you invested the maximum daily investment limit of 1000 shares, your initial investment of 15,000 Neopoints has now become 579,000 Neopoints!
That's a total of 564,000 Neopoints profit!
However, the reverse is true if you invested in FAER.
If you invested in 1 stock of FAER @ 15 Neopoints, you would have lost 9 Neopoints.
Doesn't seem like a lot does it? But if you invested the maximum daily investment limit of 1000 shares, your initial investment of 15,000 Neopoints has now become 6,000 Neopoints.
That is a loss of 9,000 Neopoints!
So how do you know which stocks will make a profit and which will make a loss?
The easiest answer is you don't. It is quite random (though there may be some longer-term patterns in stock behaviour)
If your stock does go negative, DON'T PANIC.
Stocks go up and down all the time. You may find one day your stock is only worth 6np and in a couple of days may be worth 30np!
The WORST thing you can do is to sell a stock when it is negative.
You will take a guaranteed loss of whatever the difference is between the purchase price and the current price. In the example up above, it can be up to 7,000 Neopoints.
The best thing to do is to resist the urge to sell the stock. It ~should~ eventually rise.
Note: On rare occasions, stocks DO go bust, and any Neopoints invested in a busted company is lost. Please see the section entitledWho should invest in the Stock Market?" for more information.
Investing in Stock vs. Bank Interest
Both the stock market and the bank interest work differently, but a comparison can be loosely made to judge the Pro / Con of each with one example
Bank interest ranges from 4.5% minimum to 12.5% maximum, currently.
Amount of NP in bank account: 15,000 NP
||Total Yearly Interest
||NP / Per day
||#Days to reach 1,000NP
4.5%lowest interest rate
12.5%highest interest rate
Going on the above example, if you stored 15,000 NP in your bank account:
With the minimum interest rate of 4.5% and collected 2 NP interest every day, it would take around 500 days to reach 1,000 extra Neopoints!
With the maximum interest rate of 12.5% and collected 6 NP interest every day, it would take around 167 days to reach 1,000 extra Neopoints!
Note: You MUST ensure you collect interest every day from the bank, based on those figures to achieve the target of 1,000 np. At present time there is no way of taking interest out of the bank in a lump sum.
Now lets compare that to the stock market.
You buy 1,000 shares @ 15,000np in stock xyz.
It could go up by 1 Neopoint in half an hour.
If this happens, Congratulations! Sell and you've just gained 1,000np for half an hour's work
I always work on the loose estimate that it takes a stock approximately 5 days to increase to 16.
As above, some will rise in half an hour, some will fall and stay below the 15np threshold for a few days.
So, lets work on that estimate instead.
15,000np invested over 5 days, and sold for 16,000np (Profit of 1,000np) = 200np per day.
Now to carry this trend on further, and project this estimate over one year
365 Divided by 5 = 73
73 multiplied by 1000 = 73,000 Neopoints or 487%
So, assuming you sold your single stock every 5 days for a profit of 1,000np over the course of a year that's a total of 73,000 Neopoints profit!
73,000 vs 1,875 Neopoints
487% vs 12.5%
Is a rather big difference!
However that is just using ONE investment of 15,000np!
You can invest 15,000np PER DAY into the stock market.
Now, using these projections, there is a simple way of calculating a total for an entire year's worth of daily maximum investments..
365 minus 5 = 360.
360 multiplied by 1000 = 360,000 Neopoints or 2,400%
On the 5th day you would, on average, sell at 16,000np for 1,000np profit.On the 6th day would be the 5th day for your 2nd investment, sell at 16,000np for 1,000np profit.On the 7th day would be your 5th day for your 3rd investment, sell at 16,000np for 1,000np profit..
360,000 Neopoints = 986 Neopoints per day!
Note: This is an average figure, as stocks are random, whereas bank interest is a fixed rate. Stocks go both up and down, and there is always a small chance of a stock going bust.
Also; this figure does not factor in selling stocks higher then 16,000np.
To sum up:
||NP per day
|4.5% Bank interest
|12.5% Bank interest
|1x 15k Stock
|360x 15k Stock
Who should invest in the Stock Market?
The stock market is for everyone!
There are different strategies to buying and selling stock if you are a brand new, or even impatient player, or if you are an older, established, or even patient player. It's all about setting goals, and working to achieve those goals.
The stock market also is great for any budget, big or small. (As the minimum investment is only 15np, the maximum daily investment 15,000np!)
One rule of thumb I always give to people, especially starting out with investing in the stock market is only put in money you'd be happy to leave alone for a month. That is, if you find you're a very Neopoint hungry citizen, always short on Neopoints, then the stock market may be difficult for you, (but not impossible!)
As I pointed out above, the stock market invariably beats the bank on interest rates hands down. This is of particular import to older Neopets players who have a fair amount of Neopoints collecting dust in their bank account (and not a lot of interest!)
Also, the stock market can be brilliant for the occasional players. I know players who have gone on vacation and come back to find their stock has gone past the 100np mark!
When should you buy stock?
General rule of thumb in most basic strategies is to only buy stock when it is priced at 15np. Buying at this price ensures that you will get the best possible profit margin from the stocks when you go to sell them, as of time of writing this guide, you cannot buy stock priced below 15np.
I find a great time to scoop up stocks is between 1-3am NST. (Neopian Standard time) Usually between 1-4 stocks are priced at 15np during this "golden window" of opportunity. If you can't get on during this time, then keep checking the "buy stocks" page until one pops up that is at 15np.
Also, I suggest buying stock whenever you find that you would be putting a sizeable chunk of Neopoints into your bank account; the stock market "pays" better interest in the longer term.
Only if you can afford to, buy stock every day and again, if you can afford it buy the maximum 1000 daily shares. This ensures that your investment is fully maximized to it's fullest potential. However, as stated above, don't invest Neopoints that you wouldn't be happy to leave alone for a whole month, just in case!
Now you know the basic who, what, where, when and why of the stock market, it's time to get into the different theories and strategies / techniques tried and used successfully on the stock market.
Buying Stock – the Basics
The most basic investment you can make daily is to buy 1000 shares in any stock that is currently selling at 15np per share.
That is 15,000 Neopoints.
Yes, it seems like a lot of NP!
Lets break it down, into easier numbers..
Sponsor games are notoriously easy to play.
Neopets want you to play their sponsor's games. It's called "immersive advertising" and therefore the games tend to be easier to play and pay out more generously then non-sponsored games.
You can play each game for Neopoints 3 times a day.
You can earn up to 1,000 Neopoints on each game.
That means you can earn up to 3,000 Neopoints by playing the same game three different times.
However it is important to note that the maximum Neopoints you can earn are 1000np per game.
Smart players figure out how many points in-game they need to make their total equal 1000 Neopoints when they submit their score, achieve the in-game points and stop, ending the game.
After all, why continue to play when you receive no further bonuses?
You are wasting your time and effort.
So, simply put, five sponsored games, played three times each for the maximum amount of Neopoints (1000np) will yield 15,000 Neopoints, the total that you need for your daily investment; and this can usually be achieved in around 30-45 minutes.
If you have half an hour to spare every day, or every couple of days it is recommended that you invest in the maximum of 1,000 shares each day at 15np each share.
Buying Stock – Advanced Strategies
There are many different ideas and theories into how and why you should buy stock.
The current 4 that are the most prevalent (and I will cover are)
Top-end High Risk Investments
The theory behind diversification can be summed up in the phrase "Don't put all your eggs in one basket".
In other words, when you buy stocks using the Diversification theory the idea is to invest in many different stocks as possible.
If you buy a range of different stocks you spread the "risk" or the idea that some stocks go down in value, across the different stocks, and the likelihood of all of your stocks losing value is lessened considerably, and you will find also that over time you will consistently have at least one stock that is above purchase value to sell.
The theory behind consolidation can be summed up by the phrase "putting all your eggs in one basket.
In other words, when you buy stocks using the Consolidation theory, (which is the polar opposite of the Diversification theory) you only invest in one or two stocks, building up your portfolio based entirely around those one or two stocks.
If you choose this method, you will probably need patience. By keeping just one or two stocks to invest in constantly and consistently, you will find a huge amount of risk attached to your two stocks, and quite possibly watch for several days as the stock could decrease in value considerably, before rebounding back up to it's original purchase price or above. The good side of this theory is when you do choose to sell, you will sell a considerable amount of stock and see a big profit all at once and gain a considerable amount of Neopoints in one single transaction, rather then see a smaller amount of profit every day or couple of days on the Diversification plan.
Note: I've known people who have accumulated over 20,000 shares in a single stock at 15np who have chosen to sell at 60np and have instantly received 1,200,000 Neopoints for their hard efforts!
This is another theory that falls under a hybrid of the Diversification theory.
The theory behind Split-Investing can be summed up by the phrase "If you don't put all your eggs in one basket, why not split the yolks and egg whites to make it go even further?
Doesn't make much sense? Hopefully I can clarify.
The idea behind Split-Investing is that you invest in the Maximum amount of stock in a day (1000 shares) across several stocks. For instance, you may notice that there are four different stocks, all at 15np. Which single one do you chose? With Split-Investing, you choose all four! It works like this:Stock A 250 shares @ 15np = 3750
Stock B 250 shares @ 15np = 3750
Stock C 250 shares @ 15np = 3750Stock D 250 shares @ 15np = 3750
Equals your total daily spend of 1000 stocks @ 15,000np. When Split-Investing it's recommended to try to buy as evenly between all the stocks that you want to invest in as possible.
Remember you can buy as many or as few shares in a stock as long as the maximum daily allowance does not exceed 1000 shares in total.
The positives behind this is you end up with a much bigger portfolio, spread a lot quicker (and thinner!) across more stocks then just using the Diversification method alone.
The negatives are when you go to sell, you will end up with less Neopoints in total then had you invested the full 1000 in that particular stock.
Top-end High Risk Investments
This theory could be summed up in the phrase "It takes Neopoints to earn Neopoints
In short, the idea behind Top-end High Risk Investments are that you buy some of the more expensive stock, in hopes that it will continue to rise in price. Often the biggest gains / losses on the market are from the more volatile high-priced (100-500np per share) stock.
The positive on this is the chance for a much quicker turn-around time on your investment, i.e. the stock may go up quite quickly and net a considerable profit in a short-time.
The negatives on this are considerable; first there are the overall investment costs; if you were to buy the maximum daily allowance of 1000 shares in a Top-end stock at 100np per share, it would cost you 100,000np!
The second and more considerable negative is that Top-end stocks have a habit of crashing, and quite spectacularly. You may find that overnight a stock worth 100np could only be worth 15np, or even go bankrupt.
With considerable risk comes considerable profit, its up to you to decide what sort of player you are, and what sort of buying strategy suits you and your budget.
Selling Stock – the Basics
You've bought some stock. Now comes the big question, when do you sell? It is the question that I get asked the most often; and my response is always the same.
Always sell the stock when it is in profit.
Do NOT panic if the stock falls negative and be tempted to sell. This loses you Neopoints.
Remember that selling the stock you will incur a tiny charge, usually 100np or so, depending on the amount of stock sold, as a transaction charge. It is negligible.
As for what price to sell at; I always advise:
Set a price to which you would be happy to sell at and see the profit, and then sell when the stocks hit that price.
Yes, your stock may go up higher then your intended sell price; but you shouldn't be kicking yourself; after all, you sold at a price which was right for you.
Selling Stock – Advanced Strategies
There are many different ideas and theories into how and why you should sell stock.
The current 5 that are the most prevalent (and I will cover are)
Short-term selling strategy
Mid-term selling strategy
Long-term selling strategy
Split-level selling strategy
Self-supporting portfolio strategy – Credit to Outlaw & link provided
Short-term selling strategies
Short-term selling strategies are often employed by those first starting out in investing in the stock market. The theory behind short-term selling is the idea of quick Neopoint turn-over.
Short-term selling strategy involves setting a maximum selling price of anywhere between 16-25np per share
Why choose the Short-term selling strategy?
The chance of stocks rising between 1-10np are extremely likely, and happens usually once every 5 days (on an extremely generous average).
The Short-term selling strategy roughly takes 5 days between buying and selling, on average
This means that by using the short-term selling strategy you will see a quick return on your investment. Your portfolio will not grow very much, if at all, as you will find yourself selling almost as much as you are buying.
Who should choose the Short-term selling strategy?
Those first starting out on the stock market and would like to get a feel for how it works.
Those that have little patience to wait for investments to mature for a higher profit.
Those who want to make more Neopoints then the bank's daily interest would give them, but do not want long-term commitments or have their Neopoints tied up for long periods of inactivity.
Mid-term selling strategies
Mid-term selling strategies are often employed by who have tried the short-term selling strategy, and do not feel confident to commit to the long-term selling strategy.
Mid-term selling strategy involves setting a maximum selling price of anywhere between 26-45np per share
Why choose the Mid-term selling strategy?
Mid-term selling strategy offers a compromise between the shorter and the longer selling strategies, and offers the best of both worlds. You get the positives of both, without the negatives.
With the Mid-term selling strategy, you increase your profit, increase your portfolio, and still maintain a faster turnover on Neopoints, but still not as fast as using the short-term selling strategy, but to make up for it, you gain considerable profit when you do sell.
The Mid-term selling strategy roughly takes 15 days between buying and selling, on average.
Who should choose the Mid-term selling strategy?
Those that have Neopoints that they can leave in investment for a period of around 2 weeks.
Those that are interested in slowly building up a portfolio in anticipation of moving into the Long-term selling strategy.
Those that do not instantly and always need Neopoints, but still wish the security of a moderate turnover and the benefits of higher profits.
Those with moderate patience.
Long-term selling strategies
Long-term selling strategies are often employed by those who prefer a secondary "storage" for Neopoints. (And those, like me, who see Neopoints in the bank as a free-for-all spend.)
Long-term selling strategy involves setting a maximum selling price of anywhere between 46-100+ np per share
Why choose the Long-term selling strategy?
The profit you obtain offsets the long length of time that it takes to actually hit your target selling point.
You build up an extensive portfolio, which increases your chances of hitting your target selling price, and selling a considerable chunk of shares at one time. (If invested daily, it is possible to have anywhere from 15,000-25,000 shares to sell when the stock hits your particular long-term sell point. That means a big chunk of instant Neopoints!
The Long-term selling strategy roughly can take anywhere from a month to a year to see a full return on your investment.
This means that by using the long-term selling strategy you will see a very slow return on your investment, but the amount you choose for your sell-point makes it worth the wait in the end.
Who should choose the Long-term selling strategy?
Those that have a fair amount of extra Neopoints to speculate with.
Those who have an extraordinary amount of patience.
Those who do not want or need instant or even mid-term access to Neopoints. (Ie those that want to make a "neo-pension" or to tie their Neopoints up)
Split-Level selling strategies
Why choose the Split-Level selling strategy?
The Split-Level selling strategies is a hybrid of two or more of the different short-mid-long term selling strategies and can be used to maximize your Neopoint return with minimizing your risk.
Who should choose the Split-Level selling strategy?
Those that can closely watch and monitor their stocks over at least a 12-24 hour period.
Split-Level selling strategy involves selling part of your stocks at your target selling point, and holding onto part, in hopes that the price will rise to a maximum sell point which you have set in advance.
You have 6,000 shares of stock XYZ
Your target selling point is 30np. For your first 3,000 "split" of shares and then 45np for your second "split" of 3,000 shares
XYZ hits 30np, you would sell 3,000 of the shares
XYZ hits 45np, you would sell the remaining 3,000 shares.
Obviously this can become a bit risky, as shares may dip below your original target selling price of 30np. However, quite often there is fluctuation on the stock market, and one hour a share prices can rise (and similarly, fall as well!) so it is entirely possible that if you sell at 30np early on in the day, and the share price continues to rise, you would benefit from employing this method.
If the share price rises moderately, and then appears to fall once more, you can always choose to sell for the current price, (which would be above your target minimum sell point anyways!)
Self-Supporting Portfolio strategies
Credit goes to Outlaw for writing this fantastic tutorial that shows you how you can invest one lump sum of Neopoints into the stock market, and increase your portfolio with the profits and never have to spend another Neopoint again on the stock market! It's a MUST READ for every stock market investor!
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