So you'd like to invest in the stock market cheaply. Well, my first piece of advice would be to get more money, because the entire premise of the stock market is overcoming the initial fixed costs and mitigating risk while not overdiversifying. The only way to do that is to have money. But, fear not! There are options for "cheaper" people. Just don't expect to get rich overnight, and don't be fooled -- you still have to watch your investments closely.
Things You Will Need
Online trading account (TradeKing, OptionsTrader)
Books to determine what type of trader you want to be (Nolo books are great)
Step 1First, choose your online trading brokerage. There are many who will help you trade at a price of $3-4 per trade. Do not expect research, help if something goes wrong, or even an easy interface. At this level, you are paying to trade and nothing else. Your best bet in my opinion is Tradeking. Stay away from Zecco. You can also go to budgetcents.net to see if any of the online stock brokerages are having a promotional sale.
Step 2Next is to determine what type of trader you will be. If you want to be cheap, that means you should be safe. You are putting your money in for long periods of time, in safe industries. My suggestion is that you assume a value trading position. The proponents and masters of this style are no less than richest man in the world Warren Buffett and master investor Peter Lynch. Hit the bookstore and look up their trading style. My Barnes and Noble has like a whole section on just Warren Buffett.
Step 3Next, you must determine your trading vehicles. If you want to be cheap, you must auto-diversify your inevstment portfolio. There are many new trading vehicles by which you may do this in the stock market, namely ETFs, bond mutual funds, and index funds. ETFs are like mutual funds which invest in entire industries at once, but trade like a stock. Bond mutual funds usually have five letters on their ticker symbols rather than 4. Index funds are like buying the entire market at once. You can find many of interest on Yahoo Finance.
Step 4Use your newfound education to invest wisely in ETFs, bond mutual funds, and index funds. Watch your investments closely, as all three of these are tied to the global market, and if we have bubbles bursting like the recent real estate crash, even if you're not invested in real estate, your investments will be affected. Bond mutual funds are the safest and least volatile of these three, and I suggest you start with those so that you won't be tempted to sell at the first sign of trouble.
Good luck! Remember, this money should be expendable because you don't want any emotion attached to these investments. Greed and fear are your worst enemies! (Greed makes people buy when they should sell, and fear makes people sell when they should buy!)