I'm 23 years old and I'm thinking about getting into stocks. What's the best way to learn?

Question

Do you have to be really good at math?

Answer 1

Well, no, you don't have to be a math genuis... the basics will do. I recommend you research mutual funds before investing in individual stocks. Why? Diversification. You can understand the idea of not having all your eggs in one basket... that's what a stock can be. But in a mutual fund, you'll be investing in hundreds of stocks all at once. So you will have lots of different baskets and won't have to worry about all your eggs getting broken. If you decide to invest in stocks, consider it a long-range plan. Buy stocks when you are able to invest... build a solid portofolio by divesifying your stock picks into different industries. Don't, for example, invest in only technology stocks. Sure, include a tech stock or two, but include a stock or two from each industry you feel offers opportunity. Focus on your buying habits, too. If you drink Coke or Pepsi, why not invest in the company that makes it? If you prefer certain stores over others, buy those stocks if they are publicly traded. If you love Target or over Walmart, buy the Target stock. If you like to gamble, why just invest in a casino... consider Shufflemaster stock which makes the machines that shuffle the cards! Do your homework, think long-term, and watch the earnings reports to know the direction the stock is taking. If any of your stocks fall below $5, consider it a lesson learned, and look for opportunities elsewhere. Buy quality, forget penny stocks, and best of luck to you.

Answer 2

Buy some stocks, and lose your money. You will learn real fast that way! Math is one part of it but it is not very hard to find the numbers crunched for you, usually for free. Bottom line: Buying stocks is like buying anything else, in the end -- it is a judgement call. And to have good judgment, you need to know a GREAT DEAL about many different things, like how the stock market works, which companies have solid management, which companies are in a temporary slump and why, who's going to be the next President of the US, who's gaining from the war in Iraq, who's going to get bought out soon and why, the weather in Africa, the size of the apple crop in Georgia, and a thousand other things that seem to have nothing to do with each other or the stock market, but they do. If you really want to learn, take the time to understand how the world economy works, first. That may take a few years to understand. You'll never get it all but in 2 or 3 years you will have a pretty good idea. Then, develop your own theory. See how it works, for another 2 or 3 years. Iron out the kinks. THEN start investing.

Answer 3

Math helps, but mostly just being able to work with percentages and fractions and ratios.

I'd suggest you start by reading a few good books on investing: Peter Lynch's "One Up on Wall Street", Jeremy Siegel's "Stocks for the Long Run", and Benjamin Graham's "Intelligent Investor". Also check into a few good websites like Motley Fool or Smart Money, and when you can put some money together that you can afford to lose, start small and experiment with a few investments. It might pay off to start with a mock account first, and try doing some paper trades before you put real money in.

Best of luck to you.

Answer 4

Technically, it is extremely simple with today's information era to invest or trade stocks and shares. You simply need to open a trading account, fund that account, buy a stock and sell it later at a higher price for a profit. Simple?

Well, that simplicity is exactly the sheep skin that hides the wolf beneath. That is exactly the expressway to wasting a lot of money.

Investing or trading the stock markets never start from opening a trading account... it starts from adequate investment and trading knowledge. There are quite a number of things you need to learn before you can even start thinking of the stock markets ...

1. You need to understand how the stock market works and what it is exactly about.

2. You need to know what are the different styles of trading in stocks and shares.

3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.

For all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.htm

After you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://www.worden.com )

Remember, the slogan "Just Do It", Just won't do for the stock markets. If profiting in the stock markets is as simple as buying a single stock , then why are so many people still poor?

After you have all the above mentioned knowledge, you need to ask the following golden questions before you can decide whether a stock is worth buying or not :

1. Why are you of the opinion that this stock will rise?

2. Is your opinion valid in the first place?

3. When are you expecting it to rise? Can you hold on for that period of time or longer?

4. What is your expected entry price? After what price would your expected profit margin be too thin to enter upon?

5. Where is your expected stop loss point? What is your stop loss point based on? Where will you tell yourself that it is time to take a loss and get out?

6. Where is your expected profit taking point? What is your profit taking point based on?

7. Does the way you are buying the stock allow you to hold on until your expected profit taking point?

8. How much of your money should you dedicate to this one trade?

9. What is the level of primary, secondary and idiosyncratic risk you are undertaking when deciding how much of your fund to use?

10. What is your cashflow need? Does your cashflow needs allow you to hold the full lifetime of the stock?

After you are able to answer all these questions confidently, THEN you are ready to... PAPER TRADE your stock strategy. Yes, even at this point, you are NOT READY to trade for real. You should trade on PAPER for at least 6 months and become consistently successful BEFORE you take your stock strategy into real life.

Then.. you are ready to start... but there is still no guarantee of success as paper trading is very different from real trading. You will need another maybe 1 year or 2 trading very little money and be consistently successful BEFORE you are ready to increase your stakes.


So, as you can see, success in the stock markets is not easy at all the the less knowledge you have, the more risk you undertake. I lost hundreds of thousands in the stock markets before I become successful.

Take heed and good luck.


All in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets.

If you care to read about how I went from completely broke to retired millionaire trading stocks and options by 28 years old, you can go to http://www.mastersoequity.com/

Hope these information helps.


http://www.optiontradingpedia.com/

http://www.mastersoequity.com/

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Answer 5

An undergraduate degree in Economics might help. Just do it. And exercise caution when it comes to the bottom line. Limit your risks to what you can really afford to abosolutely lose.

If anybody has the information you want - they are using it, not selling it. It's quite simple. Decide whether you want Financial Planning, Broker recommendations, or a do-it-yourself trading account, pick your brokerage firm, and open the account.

Then - Enjoy the ride !

Answer 6

1) Harvard.
2) Yes.