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Getting Started in the Stock Market

By Edited Nov 13, 2013 0 0

Getting Started!

Getting started investing in the stock market can be very intimidating. There are many different tools, levels, variables and players that are involved. The number 1 piece of advice I would give is to get educated.

I would strongly recommend learning about the market by reading how to books, take a seminar or browse through some investing sites to learn the different areas of investing. You need to find YOUR style of investing. Your age, commitment, and attitude can help you find the right investment and niche.  Emmerse yourself in the industry. Talk your rich uncle or humble father in law. Ask questions about failures and successes. I read the Complete Idiots Guide to Investing. This was a great book as it taught you the basic terminology, strategies and gave helpful pointers. This is a great beginner’s book and after you complete it you will be able to make educated investments instead of blind investments. After that you can read more in depth books that get into more the strategies and deeper topics.

You have a lot of different options on how to invest but I will keep it to the basic routes. The first is going through an online company such as Ameritrade, E-Trade, and Scott Trade. These companies typically charge a flat fee for trades and have huge amounts of research tools at your disposal. However the drawback to these is the minimal personnel to help you with questions. You control all your own trades. I started here and I recommend beginners start here as well.

The second is to go through a broker firm such as AG Edwards (now Wachovia Securities), Charles Schwab, or many others. Here you will be able to work with a financial advisor/broker to help you make decisions on how and where to invest. The positive side to using one of them is that you get personalized service and are able to call with questions. The downside is that you pay more. Typically trades are much more expensive through them.

Mutual funds can offer another avenue for investing. You can do your research to learn more about the process.

Set a goal. With any new venture it is always beneficial to set a goal. Then find your strategy after doing the research. If you do not have a strategy you are going to learn the hard way. Invest in the companies and products you know and support. I have found this helps stay active in the research, which is 90% of the work. Diversify your stocks. Do not put all your eggs in one basket. Spread it around to different industries to minimize the risk. Become confident in your strategy. This helps with the whole process and in some cases can become fun! Resist the urge to dump stocks. Everyone always talks about how and when to buy stocks but it is just as important to know when to sell them.

Here is a recap to get started on your new portfolio:

  1. Educate yourself
  2. Find your Strategy
  3. Set your Goals
  4. Buy the Stocks you know and use
  5. Diversify
  6. Educate yourself MORE
  7. Learn when sell
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