How Do I Invest in the Stock Market?

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When investing in the stock market, it's important to employ diversification over a large number of industries. Learn about investing in mutual funds or common stock with help from a personal asset manager in this free video on investing in the stock market and money management.

Part of the Video Series: Stock Market
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Video Transcript

Hi, I'm Roger Groh. I'm here today to talk about how you can invest in the stock market. Typically there are mutual funds that people begin to invest with when they're young. Whether this is in your 401K plan at work or your personal account. The reason is that you don't need a lot of money to go into them and you get diversification over a large number of industries which is an important thing for long term success in investing. Then another route came along which was electronically traded funds and really those are just mutual funds but they trade as common stock and perhaps they're a little bit easier to buy or to sell than a mutual fund. In either case, what you're buying is the index or the manager and you need to do your homework on specifically what that is in order to be successful. Last, for how you would invest in the stock market is ask you to buy common stock. Strange, isn't it to think of it? Well in a declining market like we've had here in the United States in the last year and certainly in a slower growth environment, it may be to your benefit to own fewer stocks rather than more. The reason is that for example, you are probably going to continue to go and buy Kellogg's Cornflakes for instance no matter what. No matter what the economy looks like, you will make purchases like that. On the other hand, you may not fly as much or travel as much or buy a car until things get better. So in terms of individual investing, if you own both of those kinds of companies in a portfolio or a mutual fund, you may not go anywhere, you may find your money stuck. Where if you can buy the company that does continue to grow even in a slower growth environment, that might very well to be to your advantage through the beginning of the cycle. And anyway those are just some ways to invest, I'm Roger Groh.

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