So you have an interest in the stock market. You know that people have made some money investing in stocks, even a lot of money. But you also know that some people have lost some money, even a lot of money. But you would still like to take a chance in buying and selling stocks.
First, learn about the stock market. There are many books available. Search on line. Watch TV programs. Read the Wall Street Journal or other publications. Take a class. Talk to friends, relatives, and co-workers. Begin to follow the market. Before you do anything, educate yourself about the stock market. You have nothing to lose and everything to gain.
FIND A STOCKBROKER
You are going to need a broker. But which kind and which one? Do you want a broker who has a physical setting or an online broker. You are going to need to do some research on brokerage houses. Are you an independent investor or one who is going to need advice and guidance? If you open an account with a physical brokerage house, you will be assigned a stock broker to work with you on a one to one level. You will get advice and recommendations but the commissions will be much higher.
If you are going to go with an online broker, you need to decide which one because there are many options as well as opportunities. Scottrade, for instance, charges only $7 per trade but they offer no advice and they do not have a research department. Research is available through third parties. There are other online brokerage firms that offer advice and research through their houses but they will charge more per trade.
Give these different companies a phone call. Meet the staff whenever possible. Even most online brokerage houses have physical addresses.
Ok, so you have opened a brokerage account. Now what?.
Well, now you need to decide what stocks or bonds to invest in. Except for Scottrade, all other brokerage houses will give you recommendations and advice. But that is no guarantee that you will be making money off of this information.
Research stocks and bonds. Read books and publications. Ask your broker for advice. But remember that things change very fast. This is where CNBC and Fox Business Network become very valuable. However, you do have to have cable or satellite TV in order to get these channels. Jim Cramer, on CNBC’s Mad Money, is a good source of entertainment and information. Cramer has written many best sellers on investing in stocks. They can be found online or in most book stores. He also offers online subscriptions, some free and some for pay. There are other sites out that that offer advice on stocks and bonds.
TIME TO INVEST
Do not invest any money unless you can afford to lose it. That is the most important suggestion of all. You never know what is going to happen after you invest in a stock. The stock could go in either direction very fast. If you do not have the stomach for the big plunges and losses, don’t do it.
At the end of Jim Cramer’s Mad Money, there is a disclaimer about his show offering information only and that you should always do your own research because “no one cares more about your money than you do”.
KEEP YOUR EYE ON THE PRIZE
So, now you have bought some stocks or bonds. This is only the beginning. Do your homework. Now, you get to follow your stocks or bonds. You will have to make choices as to whether to buy more stock, hold on to what you have or to sell, hopefully at a nice profit. You will only learn by trial and error. You will make some choices that you will later regret. But if you have done your research and homework right, you will make many good decisions that will add to your bank account and improve your quality of life.