how to buy stock first time

Being successful in the stock market depends on being able to find out what a company’s future returns are.
Go to the local library and search online to find books and other resources on stock investing.
The first article she wrote was How to Get Rid of an Old Car, and she admits that, being excited to jump right in and share her thoughts, she violated several rules when she wrote it! The friendly wikiHow community helped her learn the ropes, so she stayed for a long time, making many friends, and doing all kinds of different things.

Another consideration, especially if starting out with limited funds, is that investing in 12-20 stocks may not be feasible, so having the majority of your money in some funds would provide the stabler returns those tend to generate while maybe half a dozen individual stocks would give your portfolio an extra kick.
Individual stocks, mutual funds, index funds, ETFs, domestic, foreign – how can you decide what is right for you? This article will address several issues that you, as a new (or not-so-new) investor, might want to consider so that you can rest more easily while letting your money grow.
If you don’t have the time or desire to pick as well as follow that many stocks, consider investing in a mixture of index funds and individual stocks.
Are you willing to spend a couple of hours a week, or more, reading about different companies, or is your life just too busy to carve out that time? Investing in individual stocks is a skill, which, like any other, takes time to develop.
Careful selection of mutual or index funds would let you invest your money, leaving the hard work of picking stocks to the fund manager.
The answers to these and similar questions will lead you to consider different types of equity investments, such as mutual or index funds versus individual stocks.
This discussion relates to the latest Investing in Funds & ETFs Report and formed the basis of a discussion on The Experts blog on Jan.
Yes, we Fools index funds, but we also believe everyone should own at least one stock (and ultimately, at least 15 to reduce your risk and increase your odds for success).
But just as important, if you want to beat the market, you simply can’t do that by investing only in index funds.
Instant diversification: When you invest in an index fund, in one fell swoop you’ve spread your dollars across industries, markets, currencies, and countries, substantially lowering your risk in the process.
But for now, we simply recommend that for every dollar you put into individual stocks, you roll the same amount into an index fund (the Vanguard fund we mentioned above is good choice).
How many times have you heard someone ask, "How’d the market do today?" But what is "The Market?" And how do we know how it did? Usually, the answer reflects the performance of an index — such as the Dow Jones Industrial Average or the Standard & Poor’s 500 — rather than the market as a whole.
The goal for investors in the stock market is to select stocks that have a good likelihood of rising in value over time.
Trying to predict which stocks are going to rise in value is extremely difficult, even for professional stock brokers and money managers.
This amount of time may seem extensive, but history has shown that the overall value of the stock market will rise over time, even if it suffers periodic drops in value.
These are indexes of specifically selected stocks whose performances are carefully watched by financial experts as an indication of the health of the stock market in general.
There are many websites that will, for a fee, place orders for shares of stock, sell shares of stock you own and track the value of your entire portfolio.
Anyone who watches the news even occasionally knows that the stock market is usually very volatile, with prices of stocks rising and falling suddenly and unpredictably.
Establish an account with a major online brokerage firm that offers trading tools such as stock screeners that help you narrow your choices according to certain criteria, interactive charting that allows you to perform technical analysis on your selected stocks, company and industry news, and independent research reports.
High quality common stock, listed on a major exchange like the New York Stock Exchange, or part of a major index like the Dow Jones Industrial Average (DJIA) or the Standard & Poor’s 100 or 500 (S&P 100 or S&P 500) are good choices for a first-time investor.
The “experts” in the stock market don’t always have your best interests in mind so you may want to consider asking trusted friends and relatives if they know any good stocks to buy instead.
The first thing you need to know about trading stocks is that each stock is assigned a Ticker Symbol by the stock exchanges.
In order to trade stocks on HowTheMarketWorks you must know the ticker symbol of the stock you are thinking of buying.
Search for “online discount brokers” on a search engine to find a list of brokers that you can use to buy and sell stocks online.
Search online or call or write the company whose stock you wish to buy, to inquire whether they offer such a plan, and forward you a copy of their plan’s prospectus, application forms, and other relevant information.
Investing 100% of your capital in a specific market, whether it is the stock market, commodity futures, forex or even bonds is not a good move.
Trying to guess what will be the next "Apple," a revolutionary produce or a rumor of earth shaking earnings, investing on news is a terrible move for first time investors.
Investing is a long-term business whether you are a buy-and-hold investor or a trader, and staying in business requires having cash on the sidelines for emergencies and opportunities.
As you gain confidence and become more adept at evaluating stocks and reading the market sentiment, you can start making bigger investments.
Sure, cash on the sidelines doesn’t earn any returns, but having all your cash in the market is a risk that even professional investors won’t take.
Learning to control the amount of capital at risk comes with practice, and until an investor learns that control, leverage is best taken in small doses (if at all).
Studies have shown that cash put into the market in bulk rather than incrementally has a better overall return, but this doesn’t mean you should invest to the point of illiquidity.
Getting solid information on penny stocks can also be difficult, making them a poor choice for an investor who is still learning.
If you only have enough cash to invest or have an emergency cash reserve, then you’re not in a position financially where investing makes sense.
Most likely, you’ll find that the market is much more complex than a few ratios can express, but learning those and testing them on a demo account can help lead you to the next level of study.
However, there are some common mistakes that first time investors have to be aware of before they try picking stocks like Buffett or shorting like Soros.
The worst case scenario is that you get stuck jumping in late (or investing on the wrong rumor) time and time again before you give up on investing.
This is one of those annoying answers that starts with a question: Why do you want to invest? Are you like most stock investors – who simply want to take on a little more risk to get a greater return on your savings? Or are you one of those few who really like the idea of rolling up your sleeves, searching through the thousands of stocks out there like a tag sale regular trying to find the bargain that everyone else passed up? These are two very different kinds of stock investing.
All good advisors should the spend time to answer your questions, find out how much risk you’re comfortable with, keep up with changes in your financial life, etc.
There are lots of good books out there on securities analysis, and if you’re going to learn to pick stocks, you’ll need at least a basic understanding of what’s in them.
Like Tiffany in California, many would-be stock investors find themselves stuck before they even take the fist step and want to know: How do I get started? Then, like Sajjad in Pakistan, there are the would-be entrepreneurs want to know how to translate their dream of starting a business into reality.
In the end you may decide that it’s not worth devoting that much of your life – giving up time with family and friends, or devoting so little time and energy to helping other people – to achieving your dream.
So how do you make sense of all this financial mumbo-jumbo? Rather than spending hours in the library reading mind-numbing books on stock picking, many newcomers prefer to join an investment club of other like-minded souls.
Warren Buffett, Stevie Cohen, all the great investors go outside every day and they want to take your wallet, steal your diamonds, maybe rape you, and then after they’ve gotten everything they can get from you, they are going to shoot you in the head in front of your child and run off into the dark of the night.
I’m really bullish on stocks and the economy but I don’t think you should waste your money investing in stocks.
Who knows? WHo really knows? No matter how much information you have about a stock we’re all going to be dead in 100 years anyway.
But given the volatility in the market I don’t think thats a good enough return for most people.
Then there’s the other 100 million people who own stocks.
You know how many hours I had to research all the drugs for irritable bowel syndrome? And then talk for many more hours with the CEOs of every irritable bowel syndrome company? And then try to figure out how big the market is? Not an easy task.
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"If you look at the tables, the real performers of the last few years are the FTSE-250 funds," says Tim Cockerill, head of investment at financial advisers Rowan Associates.
Most funds allow you to make regular investments, drip feeding your money into the market, although this is not usually an option with guaranteed equity bonds.
"Using a fund avoids putting all your eggs in one basket," says Robin Stoakley, managing director for UK retail at Schroders investment managers.
Investment trusts, like funds, are a collection of shares in companies but have a more complex structure than unit trusts or Oeics.
Tales of other people’s gains can make you wonder why you are squirreling cash away in a safe but not especially profitable savings account when you could be buying into funds that could help your money grow much faster.
Although it is easy to buy shares in a single company, it is just as easy to buy an investment made up of the shares of 150 companies – a fund such as a unit trust or an open-ended investment company (Oeic).
(NYSE: GS) remains the premier investment bank on Wall Street, but has lagged the market as some other financials have — down 4.4% year-to-date.
While sales growth has been sluggish recently, many Wall Street analysts believe the company is taking the right strategic action to reinvigorate revenue growth.
While the company has struggled with business in China, many trading models indicate that sales bottomed last year, and the path higher could be much easier.
3M Company (NYSE: MMM) is another quality Industrial name that is still down for the year, a small 0.3%. The company is closely correlated to U.S. leading economic indicators.
Most of Wall Street remains very positive about the balance of 2014 and next year.
The Coca-Cola Company (NYSE: KO) is down over 5% this year despite the fact that the company is one of the most recognizable brands in the world, and its biggest shareholder is Warren Buffett.
The stock is trading at just over 10 times Wall Street 2014 earnings per share projections, or a 35% discount to the S&P 500 Index.
The more the indicators continue to improve, the higher the likelihood of strong earnings performance for the company the rest of the year.
The company raised its dividend by 9% this year, its 52nd annual dividend increase.
Five Dow Jones Industrial Stocks To Buy That Are Down For 2014 – Wal-Mart Stores (NYSE:WMT) – 24/7 Wall St.
While technology has been the top sector by far this year, the industrials as a whole have lagged the market dramatically.
All of these blue-chip stocks have lagged the market and their peers this year.
Still, investors with big gains in stocks may be looking for spots to take profit, especially long-term capital gains, and redeploy the money into solid companies with good upside.
Investors with a good memory will recall this isn’t the first time the company has been out of favor.
Like other big Wall Street banks, the white glove firm has seen a handy drop in their trading revenues.
LearnVest Planning Services is a registered investment adviser that provides financial plans for its clients and is a subsidiary of LearnVest, Inc., which provides free articles and tools to help individuals understand general concepts of budgeting and financial planning.
I started investing when the market was down, so many of my stocks hav e made money.
Thanks for sharing! This was a great personal story of taking little steps to make a big pile of money.
I picked out a stock based on the NAIC magazines that Carol let me borrow, and I decided on Quaker Oats, because everybody knows Quaker Oats: Everybody eats it every day! So she bought me one share, then worth $45.
He had a good skill set when it came to money, but she didn’t: She didn’t know to—or know how to—apply for things like food stamps, so I literally never knew if there would be food on the table.
What an inspiration you are! Unfortunately I’ve been so busy these last few days taking care of my father that I didn’t have time to open this LV article but the title really caught me.
I’m 25 and reading financial testimonies like this help me stay on track in my investing / saving.
I started out investing $50 a month with only 2 stocks, Harley Davidson for my husband, and Disney for me.
Around 1999, I heard about ShareBuilder, an online brokerage through ING, and after thoroughly researching, I opened an account with $102—a lot of money to me at the time.
I would simply ask myself: Do I believe in this company? Do I completely understand what they sell? If I didn’t understand what they do/make/sell, I wouldn’t buy their stock.
Thank you for helping me realize that I don’t need to make one huge lump-sum investment but to put in money monthly.
Big kudos to you, Victoria! And thank you for sharing your advice and story.
Like you, I love researching stocks and investing in ones that I believe in.
Buy What You Believe In: If I believe in the company and I use their products or services, then I decide whether to purchase the stock.
Friday’s stock surge takes Google’s market capitalization to about $333 billion, which still pales in comparison to that of technology industry rival Apple Inc.
Google’s stock surpassed the $1,000 mark for the first time, helped by strong third-quarter results.
The stock had never been higher than $928 in regular market trading since Google went public at $85 per share nine years ago.
Google’s average ad price has fallen from the prior year in each of the last eight quarters, primarily because advertisers aren’t paying as much for mobile ads because the screens on and tablet computers are smaller than those on laptop and desktop computers.
shares jumped 14 percent to $1,015.46 and closed a day heavy trading at $1,011.41. The gains marked Google’s biggest one-day jump in more than five years.
The clicking volume increased 26 percent from last year, an indication that Google’s data analysis is doing a good job matching ads with the interests of its services’ users.
The Mountain View, Calif., company plans to issue a new class of stock that will likely cut the value of the shares in half, though its market capitalization will be unaffected.
Google’s stock has climbed steadily in the last five years, more than doubling in value.
You can buy shares of mutual funds or ETFs which are essentially managed pools of money wherein another company invests in a wide variety of stocks and you get a portion of the returns.
Do you have reason to believe that a particular business can make money? Is it serving a need that the world will continue to have in the future? Is there room for the company to expand to new markets (or is it paying dividends on consistent earnings)? If so, you may have a company that you should add to your portfolio.
A safer way to make money on stocks is to invest in a company that pays dividends.
Earnings Per Share – This is the amount of money that a company earns per share of stock.
It’s calculated as a company’s net income minus dividends on preferred stock divided by the average outstanding shares.
This is what investors hope for when choosing growth stocks: companies that have room to expand, grow, and provide a return on their investment solely based on the value of the company.
While getting the absolute value of a company is a bit more complicated than just looking at the market cap, for most basic research, comparing two company’s market cap can help you get a better sense of scale than a share price will.
When you hear about someone losing all their money playing the stock market, it’s typically because they over-invested in a risky company.
That being said, despite the negative hype, the company’s price is still higher now than it was at the start of 2012, and it’s started paying dividends.
However, out of context, a stock price gives very little information about the health or value of a company.
During a growth period, profits are usually reinvested in a company so it can grow more (which also benefits investors), but once growth stabilizes, a company can choose to pay dividends to shareholders.
Since the company makes enough money to reinvest and still have some leftover, it pays dividends.
Fortunately, growth in a company’s overall value isn’t the only way you can make money.
If the stock market is not on your side (and it’s certainly not on our side right now) and if you don’t want to hold on to this particular stock for the next five or ten years, this may be a good time to consider selling, especially if there is a brief rally in the stock you want to sell.
2.) Are you responsible for aging parents? Do you have a will or trust? Will you inherit money someday? Do you need to make a major purchase like a new car or a new roof for your home? Do you have a retirement plan? Are you funding it to the maximum allowed by law? Do you have adequate insurance? Are you saving for your children’s education? Only after an adviser fully understands your financial situation should he or she ask you how much money you have to invest.
If you look at the chart of those closing prices (you can find such a chart on any good financial Web site), you’ll see a line that, in my opinion, can serve as an early warning sign of when to sell a stock.
Why is it that many of us drag our feet when it comes to selling a stock we own-even if we know that we are over allocated in the stock market and should take some of our money off the table and keep it safe and sound? Apart from wanting to avoid paying capital gains tax, the answer probably has to do with a fear of losing out on future profits.
Cook said Apple repurchased $14 billion of stock in the past two weeks, noting the company wanted to be "aggressive" and "opportunistic" with the repurchases.
Apple has come under pressure from activist investor Carl Icahn, who has asked Apple to substantially increase its buyback program, calling the stock a "no-brainer" on television several times.
Apple’s (AAPL) buyback of $14 billion of its own stock in the past two weeks is more than just a sign of confidence.
Icahn owns roughly $3.6 billion worth of Apple stock, and has tweeted that he believes Apple should increase its buyback.
Cupertino, Calif.-based Apple is currently returning $100 billion to shareholders in the form of buybacks and dividends, and the recent purchases are part of that program.
This isn’t the first time Apple has come under pressure to do something with its mountain of cash, with Greenlight Capital hedge fund manager David Einhorn being the first in early 2013.
It’s quite likely that Apple will update its buyback and dividend program later this year, with Cook mentioning that Apple intends to update the program in either March or April.
It’s possible that Apple again taps the debt market, such as it did last year when it sold a then record $17 billion worth of debt with various maturities.
Why is the stock price so low? Why is the company struggling? What are the chances it will succeed? You’ll almost always discover that the company behind a penny stock is a risky, struggling business.
Sometimes this desire for a great stock bargain leads investors (especially beginners!) into penny stocks, also called micro caps, smallcap stocks, or stocks on the pink sheets.
If you’re the type of investor who likes to split off a small percentage of your portfolio for risky moves—and if you can sleep at night knowing that you could double your money or lose everything—trading these investments stocks can be entertaining.
You might also hear penny stocks described as micro-caps, which refers to the relatively small value of the company.
Why might this happen? The company behind the stock is risky! It might be a very small company, not worth very much money.
Unfortunately, novice investors are more likely to lose money than they are to get rich from penny stocks.
In the absence of reliable financial information and a solid, trustworthy history of the company, investing in penny stocks is speculation.
If you already have a good discount stock broker, you mostly already know how to buy penny stocks.
Be careful asking the question "Where can I find good penny stocks to buy?" This is a difficult question to answer, if you’re looking for safe investments.
For example, one stock might sell for $0.50 a share with two million shares outstanding.
By popular definition, a penny stock has a price less than a dollar per share.
Anyone who’s bending your ear about a hot insider tip is either trying to sell you on an expensive newsletter (and make money that way) or to seduce you with a pump and dump scam to raise the price so he can sell it at a profit.
There are only three ways to make money with penny stocks, and they’re all much more difficult than you think.
Penny stocks make money in the world of speculation.
Novice investors often look at a stock price and see the value of the company—a stock priced at $100 seems like it’s more expensive than a stock priced at $10.
For a modest investment, a malicious investor could run up the price and convince other people that the price will continue going up and sell his shares to them at inflated prices.

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