Question About The Stock Market?

Question

I would like to Invest some money into the stock market. But the question is, I have no clue what I need to do or How I will be doing this process. So Will some one like me be better off with or without it.

Cause I dont know / when / what / who / and how to invest anything about it.

ANY IDEA'S / ANY HELP / ANY THOUGHTS

Answer 1

Before you place your money into the stock market, you will want to get a basic education on stocks, bonds, and mutual funds. Here are 4 sources to help you get started:

1) Mutual Funds for Dummies, by Eric Tyson
2) http://www.invest-for-retirement.com has a free downloadable book for beginners
3) http://www.investopedia.com has some excellent tutorials for beginners.
4) The Boglehead's Guide to Investing

Mutual funds are a great way to begin investing in stocks. In doing so, your money is spread among many different stocks, so that the risk inherent to each stock is minimized. It is only the overall movements of the stocks as a whole that is important to you. While a single stock can lose like 80% or more of its value in a few months, a mutual fund is not nearly as volatile.

If you want to use mutual funds, two great places to look are www.vanguard.com and www.fidelity.com . Both have low-cost mutual funds and can suit anyone's needs.

To begin the actual process of investing, you will need to answer two key questions: What is my goal for this money (and you can have multiple goals)? What time horizon do I have to complete this goal? Answering these basic questions will help you figure out what type of investments to use.

In my opinion:

- If your time horizon is less than 2 years , use a money market account

- If your time horizon is 2 - 7 years, use a bond fund with duration about equal to your time frame.

- If your time horizon is 8 years or longer, you can use a mix of stocks and bonds. The further away you are from your goal, the more stocks you will use. You then gradually increase your bond percentage as you get closer to the goal.

For example, someone investing for retirement 30 years away might use a portfolio of 20 - 30% bonds and 70 - 80% stocks. Whereas, a person who is 10 years away from retirement might use a 40 - 50% bond and 50% - 60% stock mix. While in retirement, they might use a 60% bond and 40% stock mix.

Answer 2

Before you begin to invest, there are a few thing you need to do first. First off, you will need to sit down and define your short term and long term financial goals. How much money do you want to have in what length of time. Also you need to figure out why do you want to invest in the stock market. There are other investment besides the financial market like real estate or starting your own business. Why do you want to invest in the stock market? Once you have answered these questions you must determine how much money you will have to invest and how much risk are you willing to take. Define your appetite for risk.

After you have defined your risk tolerance and you still want to invest in the stock market, you must realize that to trully invest in stocks you are not just buying a piece of paper to trade when you feel like it. Investing is buying a portion of a business. If you choose to invest in a well run profitable business, over the long term you will make money. If you choose to invest in a so so business, then you won't make as much money or possibly lose a lot of money.

You nee to read as much as you can about investing. Don't be in a hurry. Oppurtinites will always be around. They are not going anywhere. You must learn how to identify these oppurtunites. Learn as muchas you can about buying stocks, but don't let anyone tell which stocks to buy, that is your choice alone.

Answer 3

In order to invest in the stock market you will need to open an account at a stock brokerage, put some money into it, and then instruct the brokerage what stock you would like to buy. Some examples of stock brokerages are Scottrade, E-trade, TD Ameritrade, and Charles Schwab. Or, if you're interested in purchasing mutual funds, you can open an account directly with the mutual fund company (Vanguard, T. Rowe Price, etc.). Also, you need to know why you are investing. Is it short-term or long-term? Is it for retirement? If so I wouls suggest opening an IRA account (probably a Roth IRA). Then you need to figure out what kinds of stock you want. I would suggest going to www.marketwatch.com and reading about "Lazy Portfolios." Lazy portfolios are the easiest way to get started investing and they typically get pretty good returns (relative to the market). Enjoy!

Answer 4

Don't look to strangers for investment advice. You can't verify their qualifications or motives.

READ READ READ. Pick some investment and retirement books to read. The "dummy" series has some very good choices. Read at least two main stream books & you'll avoid the major mistakes of newbe's.