Help On the Stock Market?
i am interested on investing on the stock market... How do i know which company/industry to choose and how do i sell? I really want to know how to choose from and why i should choose a company/industry... I appreciate any answers...
- 1 decade agoFavorite Answer
For starters, you need to get a broker. That can be either a real person, or an online broker, like a Scottrade, Charles Schwab, E Trade, etc. I personally have a Scottrade account and i think it is wonderful for a novice investor.
Second, you need to figure out if you are investing in stocks, or plan on trading them from time to time. Investing is likely to give you a safe return on your money, where as trading has the potential make you a lot more money. I do not believe in "buy and hold" unless you are putting those stocks in a IRA or something way down the road. i would recommend studying the behavior of your stocks, and taking profits when they go up substantially. The hardest thing when it comes to stocks, other than picking the right time to get in, is not to trade too much on emotion. It is almost impossible to keep your emotions completely out of stocks, so try not to panic sell or buy when a stock goes up for a lot in a small amount of time. Buy stocks on dips, when they are down, and never chase a stock when it is going up. I guarantee it will come back down to a more attractive price.
Third, you will have to establish your risk tolerance. If you want a very safe return, with minimal volatility, i would recommend going with "blue chip" stocks, a nickname for stocks that are well established and have clean balance sheets. The DOW is comprised of many blue chips. If you are looking for a sector, consumer staples would be on of your safest bets. When you think of this sector, think of Coca Cola, Proctor and Gamble, Kraft and so on. These are companies that make things that everyone needs.
Sectors like energy, industrials, utilities and technology are personally my favorite for trading. They have good balance sheets, very good international exposure, and contain products that are necessary to keep the country, and world for that matter, running. I love Exxon Mobil, Freeport McCmoran, Apache, US Steel, Nucor, Apple, Google, Intel, KMP, Union Pacific Railroad, CSX, and Amazon. There are way too many stocks in these sectors that i love and have made me money to name, sorry.
Lastly, if you want to take a high risk/high reward approach, go for the financial, homebuilder, insurance and real estate companies. These are mostly all located in the financial sector. These stocks are usually the ones who got hurt most during the financial crisis. They are still very "cheap" compared to to their 52 week highs, but have had huge runs in the recent months. My favorite stock in this sector are Bank of America, Citi, JP Morgan, Hartford Financial, Centex, and Wells Fargo, to name a few.
I know that was a lot of information to read through, but it is just the tip of the iceberg when it comes to the stock market. Now it is up to you to research stocks and pick ones you like. Don't get discouraged immediately if you lose some money when you first start. Even Warren Buffet bought millions of dollars of GE when it was at $18, now the stock is at $13.50, so just remember even the best make mistakes.
Some great websites to visit would be google.com/finance, yahoo.com/finance, thestreet.com, and cnbc.com. I also watch CNBC and Bloomberg almost daily, but take it from me, don't believe everything you hear on those programs.
- 1 decade ago
This is not a question that can be answered in a few paragraphs. It will require lots of time educating yourself on how investing works.
But a couple of quick answers.
1. Choosing a company or industry to invest in is a personal decision. You are best investing in something you know and understand. Investing in something that is outside of your understanding is asking for trouble.
2. To invest you need to setup a brokerage account or retirement account. TD Ameritrade, Etrade, Sharebuilder are all online brokerage firms that can setup accounts for you. I usually suggest http://www.sharebuilder.com/ to people who are new to investing.
Once you have this account you can buy and sell all you want.
I believe it is really imperative that you read about investing. The one book I would suggest you read is "The Intelligent Investor" by Benjamin Graham. It is my opinion (and Warren Buffett's) the best book ever written on investing.
If you are not interested in spending alot of time learning about companies and stocks. Another alternative is to invest in an "index fund". Which basically is a fund that follows a particular market index like the S&P 500 index. You can buy an exchange traded fund which means it trades like a stock.
Read more about index funds here:
- gosh137Lv 61 decade ago
First thing to invest in is some books to learn about the market.
Try "Investing for Dummies" "The Stock Market for Dummies" by Eric Tyson. They are good beginner books.
Troweprice.com and vanguard.com are 2 web sites with "planning and education" sections.
Also Investopedia.com is ok. Click on (in the black line) "go directly to investopedia" Then click on articles, investing basics.