Anonymous
Anonymous asked in Business & FinanceInvesting · 1 decade ago

how do you get involved with buying stocks?

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  • 1 decade ago
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    Hi, It's important that we all know about investing.. much more then it was for our parents.

    more and more we are become solely responsible for our selves. company pentions are just about a thing of the past. there is much talk about privatizing social security, we are taking on a greater share of medical and disability and long term care by way of higher premiums, copays and lower levels of service

    so... you must learn to be an effective investor. Here are the necessary steps to get started

    Step 1.

    First decide what kind of brokerage you want to work with. You can open a brokerage account in your bank,

    with a large full service brokerage or an internet brokerage. I find when I get help, most people want to sell me

    things that are better for them then they are for me…. So I use http://www.scottrade.com because it’s cheap and

    easy with low frills. I like their streaming quotes and I do my own research and make my own investments. But

    any low cost internet brokerage service is fine.

    Step 2. get a subscription to Barrons or Investors Business Daily… Don't worry about the cost, and don’t skip

    this step. Do this for at least 6 months or a year. At first, It seems a bit mysterious, but pretty soon you start to

    understand the terms and things that investors are looking for and what they are afraid of.

    Step 3. If you have some money to invest, put it in 3 month CD’s right now. First the market is unstable and

    second you have some homework in Step 4 to do before you do any investing.

    Step 4. Go out to the internet and search on the following subjects. Become very familiar with the concepts.

    Asset allocation

    Long term investing

    asset correlation

    dollar cost averaging

    inflation

    Roth ira vs ira

    Large med small cap stocks

    Value vs growth stocks

    Indexed funds

    No load mutual funds

    ETF (also ETN and CEF all similar but with special differences)

    Sector funds

    Bonds, CD, preferred stock

    dividends

    International funds

    emerging markets

    commodities

    Market cycles

    volatility

    Fundamental analysis

    Technical analysis

    Life insurance term vs whole

    In most cases, I think it is wise to use indexed mutual funds and ETF to build the base of your portfolio.

    Step 5 go to http://clearstation.etrade.com/ and sign up for a free account. Play around there by looking at

    graphs and fundamentals. If you click on the graph names, you will get clear information about what the graph

    is based on and how to interpret it. I think it’s also a good idea to pretend you have $10,000 and start buying

    and selling on paper. Keep track of where you are each day for a month… It’s a lot easier to lose play money

    then real money….

    WARNING: don’t rely on technical analysis alone. These graphs are good at telling you WHEN to buy and sell,

    but now WHAT to buy.

    Step 6. It’s always a good Idea to see a CFP (certified financial planner) especially if you have a family. But be

    sure to go to one who charges a fee, rather then one who gets paid a commission on your investments. Their job

    is to work for your benefit, not to sell you investments. They can cover subjects like employee benefits,

    insurance, budgeting, living trusts, 401k, taxes and real estate as well as investment types and investment types

    to keep away from.

    But you can buy the CFP study guide at any book store and learn a lot about those topics yourself.

    Always strive to do your own research… you’ll find everyone sounds like an expert so take everything people

    tell you with a grain of salt. It’s not easy in the beginning but soon you will be the expert.

    Don’t get involved with futures, currency, options (unless you get stock options at work), commodities,

    annuities or other derivative type investments at this time.

    Good Luck

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  • 1 decade ago

    Education is key. I've been a trader and investor for 12 years. And if it's one thing I tell people over and over again. Education.

    I don't mean going to college or taking courses. I mean research. Learning what the markets are. How they work. How you buy. How you sell. What are the risks. Where the scams lay. Successful proven strategies. Above all - account equity money management principles. An individual really needs to think about what they are doing.

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  • 1 decade ago

    2 Words - "Motley Fool"

    Their website:

    http://www.fool.com

    If you want to read stuff in paper...

    Here is the *perfect* book for you:

    http://www.amazon.com/Motley-Fool-Invest...

    Why the Fool? Let me put it this way, when congress wanted info on what was going on with the markets during the Enron nonsense, they called Bill Mann, a Key writer for the fool.

    The guys are 100x more trustworthy than any other site I've found. (unlike that Jim Cramer guy).

    Another nice plus about the site is they've got a free "Stock Market Game" kinda thing at http://caps.fool.com

    Check me out I'm ranked like 10th - Flitt12

    You've got a great chance, starting early, I didn't get to start till I was out of college.

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  • 1 decade ago

    you can buy stocks through a stock broker or

    for diversification through a mutual fund.

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  • 4 years ago

    I recommend 5paisa ( INDIA INFOLINE SECURITIES PVT. LTD.) share broker in both the way i.e. from fees and best from services.

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  • Anonymous
    1 decade ago

    Very carefully.

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  • Anonymous
    1 decade ago

    www.etrade.com

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