How to Invest in the Stock Market

Member

By jmilgtp
User-Submitted Article

Article Rating:

(3 Ratings)

How to Invest in Stock Market

How to Invest in the Stock Market. Buy stocks, sell stocks and learn how to invest. Make money and reduce the risk while investing in the stock market.

Difficulty: Moderately Easy

Instructions

Step 1

Become knowledgeable about the stock market. Learning how to invest in the stock market is pretty easy. To invest in the stock market, you first must have a brokerage account. I would suggest going with an online broker because they are cheaper and easier to use than a traditional broker. Most brokerage accounts require a minimum deposit. This can range from $250 to $2000. It just depends on the broker. The real work begins after opening an account.
Step 2

Use a risk analysis tool. Most brokers have a free risk analysis tool. This tool will help you analyze your risk and will suggest a balanced portfolio for you. If you are not very comfortable with choosing your own stocks and mutual funds, would follow their advice. You can also talk to an advisor at your broker's firm.
Step 3

Research stocks. If you wish to decide on your own what stocks to buy, you must research them. There are great free stock research tools out there. My favorite is Yahoo! finance. Your broker should also provide a stock research tool for you to use. In order to research stocks, you must know the ticker symbol of the stock. The ticker symbols vary but they are usually a short form of the company's name. For instance, Caterpillar is CAT, Walmart is WMT, and Apple is AAPL. You can use a ticker symbol serach tool to find the ticker symbol of a company. Research is key to learning how to invest in stock market.
Step 4

Utilize the internet. There are also many websites that provide free stock screening tools. Some of my favorites are at MSN's money section. They have powerful stock screening tools that will help you narrow down the search.
Step 5

Purchase stock. Once you have decided to purchase a stock, log into your broker account. Most brokers have a "Trade" section. Click there to enter your trade. First, type in the ticker symbol you want to purchase. Then type in how many shares you want to buy. I would suggest using "Limits" to purchase a stock. I stay away from "Market" orders because at the time you place you're order, the most recent stock quote might say $30 but by the time your trade is executed it might be $32. When you enter a limit, it iwll buy the stock once it hits that "limit". SO if the stock price is currently at $30.00, you could enter a limit price of $29.50. Your order will only execute when the price is at $29.50.
Step 6

Place the trade. Once you have entered your trade, click "Place Trade" and your order will be entered. You're order will usually execute within an hour depending on the limit price you entered. If you entered a Market order, your trade should execute instantly.
Step 7

You have just bought your first stock and are now invested in the stock market. Good luck!