starting in the stock market?

Question

So i was interested in starting in the stock market. I am pretty young, 21, and dont really know how to go about it. I've done a little work with stocks and stuff in my econ class in high school but very minimal. i would only start with $100-$200 or something around there but i wanna get a feel of it b4 i invest anything more than that. I know the risks of losing it all and i would not put more money in then i can afford to lose and not affect any other aspect of my life other than a little disappointment. Now the part that confuses me is how to go about investing. Im guessing you cant just invest in a certain stock without going thru a company and probably paying them. What would be the best option for me to pay the least amount to a company to get going. I know i dont have much money so i'd rather spend it actually investing then paying fees to invest. Any help would be appreciated thank you

Answer 1

I don't think you are going to do anything. You are still in the "wonder if I could," or "wonder if I should" phase, rather than actually taking the first step, or trying to actually learn something. Instead, you're trying to get around the system on the cheap, asking the wrong questions.

It is possible to buy stock directly from some companies, for those few that are set up to do that, but you won't get the market price, it will take numerous phone calls and mailings and several weeks, and generally is a big hassle not worth the time.

You can't access the NYSE to trade without a membership, or a contract with a member (broker). Currently, a membership (seat) is about $850,000.

Broker's fees are so small right now, less than $10, it's really the only way to go; online that is. But even then, you would start out with a 5% loss.

Even if you had more money, what you should be doing is getting books from the library and studying. It is a fascinating subject. Then you can develop a plan, and eventually a system to trade.

Then you could trade free on a simulator for several months at Investopedia.com, and when you start making "virtual" money, you can risk your own.

Or you can jump right in there and blow your $200. I'll sure take it from you, and there's a whole system out there designed to do just that.

"Which Is Better, Buy-and-Hold or Market Timing?"

"Do You Have What It Takes to Be a Market Timer

The Beginner's Bible in Technical Analysis is:
Edwards & McGee"Tech. Anal. Of Stock Trends"

Droke, ClifTechnical Analysis Simplified

Kahn, Michael N.Tech. Anal. Plain & Simple

Kamich, Bruce M.How Technical Analysis Works

Lefevre, EdwinReminiscences of a Stock Operator

Lofton, ToddGetting Started in Futures

Lowenstein, RogerBuffet (Warren)-The Making of a Capitalist

O'Neil, William J.How to Make Money in Stocks

Oz, TonyHow to Make Money From Wall Street

Rotella, Robert P.Elements of Successful Trading, The

Schwager, JackStock Market Wizards

You need to do the work first, learn a few terms, read a few books, which you will have to do anyway. Go to the library, and browse through the row upon row of the subject. All of these questions will be answered as soon as you take the first step and read a beginners guide to investing.

Try to determine your time horizon. Short-term, long-term?

Take a look at charting and Technical Analysis for following trends in the markets. Why would you own a stock that is in an obvious decline?

Realize right away there are two sides to the market, not just the upside. What goes up, eventually comes down at least part way.

Learn how to analyze risk, and make this your primary approach, not by compounding profits and erroneously analyzing how much money you can make. For example, most traders don't make any money at all; more than 80% blow out.

Learn about money management techniques, and maybe you'll stick around awhile.

Try to find these books:
They say "Buy and Hold" for the long term is better, but that depends on when you get in, and what your definition of "long term" is. The phrase "Buy low and sell high" infers that you buy after a decline; but how much of a decline? If you had bought after a 1000 pt decline in the Dow in 2000, you would still be waiting to get back to even, six years later in most stocks.

How to start trading online:


http://www.bernanke.cn/stock-trade/...
http://www.stock-trading.jims-info.com/....

http://money.howstuffworks.com/......

http://www.investopedia.com/

http://sharebuilder.com/

www.stockcharts.com

Answer 2

You are absolutely doing the right thing, starting to invest at age 21. Congratulations!! You said it very well: Getting the feel of the market.
There are at least two options open to you:

1) No-Load mutual funds (No sales commission) Buy direct.
Vanguard and T.Rowe Price are two examples.
2) Buy stocks through a discount broker
Scottrade, Ameritrade, E Trade are 3 examples.

Whatever you do, go on line and/or to the library and read up on stocks and mutual funds, before you invest.

Also, invest in HIGH QUALITY stocks or mutual funds. Avoid penny stocks. I tracked 50 of those as far back as a year ago, and 45 are down dramatically. These were on ads in the mail. "These stocks can't fail"

There are some great stocks that have dividend reinvestment plans. ("DRIPS") Those will give you the benefit of compounding.

It's best if you can discipline yourself to invest a little each month or every 3 months.
Best wishes for great success.

Answer 3

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Answer 4

Why don't you start with Sharebuilder.com? You can start accumulating stock for $4 a time (per their ad). That way you can slowly build while learning about market. I would read as much as possible about it because there is a difference between trading and investing. For example, Dave Ramsey (famous author Financial Peace University book) suggests only mutual funds for money that you have a few years to risk v money markets/cash funds for amounts that you need within the next couple of years. Don't fall for penny stocks because you only have a few dollars and they cost so little.....they also have a greater risk and most lose money/value than gain. Stick to ones that you like and know or are interested in to "get your feet wet". It will make it more interesting to you to follow.

Answer 5

You did not ask specifically for the advice that I am going to give. But since I wish that someone had given it to me when I was first contemplating "investing" in stocks, then I figure that you might benefit from it.

Bluntly, the first thing to realise is that despite what you might see in an economics textbook about stocks, if you "invest" in stocks, you are really engaging in a legalised, glorified form of gambling. Many authors encourage new investors to look for companies that have good products, good past performance, and so on, when deciding what firms to buy stock in. All of that would be helpful IF THERE WAS A MATHEMATICAL CONNECTION BETWEEN THE FINANCIAL PERFORMANCE OF A COMPANY AND ITS STOCK PRICE. Unfortunately, there is none. The rise and fall of a stock's price is purely based on the volume of each of "bids" (from people trying to buy) and "asks" (from people trying to sell) at any given time.

Twenty years ago (before there were all of these low-cost on-line brokers) it cost $100+ just to buy or sell a stock. Back then, the people playing the market were largely businesspeople with substantial money, and, I suppose, a more savvy approach to trading stocks. Now, any Joe Blow with a Social Security Number and a bit of money can set up an account on-line with an on-line broker, and begin trading. That person does not have to know anything about economics, mathematics, history, etc. Since so many people today fall into the latter category, then you have a lot of (perhaps, most) movement in the stock market based PURELY ON IRRATIONAL EMOTION. This is largely why, in the late 1990's, there were all sorts of companies with zero earnings, headed by inexperienced people with poor business plans, and making risky products, yet the stock prices of those companies kept rising. People were buying shares in those companies due to the emotional attraction of the company and its product(s), rather than because of anything solid on which to have faith in. Meanwhile, strong companies, with established histories, and experienced people at the helm often did only so-so, or even lost market share.

Peter Lynch (the famous guy who ran one of the most successful mutual funds in history) wrote a good book in the early 1990's on investing in the stock market. But by the time that I read it in 1998, I did not realise that it was outdated for the reasons that I gave above.

Even if you ignore what I wrote above, you should definitely consider the corruption within the stock market arena. To really succeed in the stock market, one need inside information that most people do not have. Investment bankers and other Wall Street types have that information. There is also A LOT OF INSIDER TRADING that goes on in the corporate world. This gives people with that information an inequitable advantage over people like you and me. The SEC knows about it, but does nothing about it. If you, however, (or I) were to engage in insider trading, then the SEC, FBI, state, and local police would throw you in prison. (The SEC exists for the purpose of ensuring that corrupt, wealthy, corporate people are able to screw the system at the expense of the little people).

Conclusion: Investing in the stock market is legalised gambling. You might "win" sometimes; you are likely to lose most of the time.

Answer 6

There is no limit to how much you can lose!! Remember this fact! Use some money to learn more about trading. You'll need to do courses..or you will lose your money... guaranteed! Putting money in the market means you need to protect it from market falls. If you are seriously prepared to do this, I suggest you learn how you can protect your stocks with options. I'll mention some resources that will help you.

Answer 7

begin with your education. Head for your library. Most have a fairly extensive collection of books on invetings. Begin with the introductory books. "Investing for Dummies" is a good start. There are many others.

Actually, a good initial approach is to begin with mutual funds. But they also require some education. 70% underperform the stock market in general but they do offer the advantage of diversification.

Answer 8

Read "The Successful Investor" by Wm J. O'Neil

Answer 9

Yes you could learn invest by yourself. it is your money, you should know how to do with it. for starter check this site out.

http://www.pathtoinvesting.org/index_fla...
http://www.stockcharts.com
http://www.streettalklive.com section university. a lot amount of information. It will serve you well
I accumulate in good amount in 401k at the young age.I could share with you. when consider invest in stock market. you should consider basic 3 things:

fundamental analysis==(economic data,finincial health, management, business model, competetion)>>what to buy

technical analysis==(chart+indicator)>> when to buy

Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of your live

At the age of 32. my 401k is amassed 75,000.00 and 30000.00 in taxble account. by follow simple rule