How can one start investing?

Question

I've really been thinking about investing in stocks but the only thing is I don't know where to start or what to invest in! is there like a "investing for Dummies".

Answer 1

Congratulations on getting started. It’ll help you more than you know!

Your first dollars should be spent on getting educated on investing. You don't have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it'll help you! So let's start there.

You ask a very broad question, so be prepared for a pretty long answer. Just take it in chunks!


How to invest depends on what you already know. We'll assume that you're beginning!

A good primer is How to Make Money in Stocks by William O'Neil. You can get it cheap just about anywhere. It’s widely available new or used.

Another good one is one of Jim Cramer's books like Real Money (he’s got a few).

But books will only get you so far. At some point, you'll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com

For free, you can start by visiting thestreet.com and investopedia.com. That'll get you a pretty good primer so at least you'll understand what the markets are and what a stock is, etc.

If you get a chance, watch Mad Money on CNBC. Don't trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself.

Next, subscribe to something like Investorsbusiness daily or something like that that can help you identify good stocks.

Once you understand stocks, go to 888options.com. It's a website that'll help you understand options (what they do, how they work, etc). You don't need to trade them, but the more you know, the more you'll see how options can really be the safest way to invest (once you're educated).

For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter

I know that’s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in.

As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling.

You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc). And yes, you can definitely deal easily online.

Start slow, then as you figure things out, you can buy more shares.

Congrats again on getting started. If you have any questions, please let me know.

Hope this helps!

Answer 2

there is a book investing for dummies, part of the popular series
http://www.dummies.com/WileyCDA/DummiesTitle/productCd-0764599127.html

Or if you don't want to be a dummie and would prefer to be an Idiot then
http://us.penguingroup.com/nf/Book/BookDisplay/0,,9781592574735,00.html

I haven't read any of these. I was in the same boat as you, not knowing what to invest in or how. So I started surfing the net and got in to DRIP's first (dividend reinvestment program). Not a super high growth area but very consistent with companies most of us know (Exxon mobile, aqua America and Piedmont natural gas). There is like 800 companies that do this, not just the ones i bought, like coca cola, proctor and gamble, etc. Just watch out for fees.
I purchased stocks on a monthly schedule directly from the companies, no broker! I didn't have much money so the fact that they allow you to buy as little as $50 per month with no fees or commissions was important.

From there I got in to ETF's (exchange traded funds) and opened an account at www.sharebuilder.com An ETF trades like a stock but it is actually made up of many different stocks, it's like a trade-able mutual fund. With a regular investing account you can buy one stock or ETF a month for a $4 fee. So depending on how much i have to invest, between $100 to $500 a month, I invest in one of 5 ETFs rotating among them every month, i may pick up a stock i like every once and a while too.

Answer 3

What I did when I knew nothing much about stock was invest in a product. Checkout which products fascinate you or satisfy you or you think is incredible. Invest in the company. I made 6000% or 60 times my investment in 6 years staying invsted in it. This is one way for those who don't know much about stocks.
When I was in US, I read a similar story in WSJ. One guy went to a store and he saw the diapers and he was so fascinated by it on purchase, that he checked up the Company and found it to be Osh Kosh b'Gosh. He went to the OTC then next day and purchased $5000 worth of this companies stock. In a few months he stocks rose to $100000.
So products are one way you can judge a good company especially it's stocks value proposition.

Answer 4

You might want to take a look at http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can read posts on investing from the best traders, as well as share your own investing ideas. There is a charting feature, so you can see how your portfolio performs compared to the S&P 500. Also, you can create your own "group" so that you can see how you are doing compared to your friends.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Good luck.

Answer 5

There is.

Check out sharebuilder or buyandhold.com. They'll allow you to invest small amounts until you build knowledge and confidence.

Read more books. Investing is quite easy. Investing to make decent profit isn't.

Answer 6

Yes I can be of great help to you visit this site and there is lots of information on investment philosophies message back and I will give you more insight

Answer 7

read tips on investing and stocks to help you more on this site

Answer 8

Open a brokerage account at Zecco and invest in the ETF DIA.