Stocks- TOTAL BASICS?

[storm_ryda]

can anyone tell me the process of purchasing and selling stock STEP by STEP for a newb...i really wanted to get in the stockmarket but dnt noe how..where do i buy them? whats a brokerage fee ....where do i sell them ...any advice guys wud help heaps thanks again...be as specific as possible im pretty new to this...

[E320]

I also don't like it when I ask a question, but someone replys with this picture

http://www.nofuture.org.uk/diary/ima...use_google.jpg

[shawnman19]

The best way to learn how to trade in the stock market in spend a portion of your day looking at the stock market. Understanding the market is a very difficult thing, some people spend there entire lifes trying to truely understand the market.

My advice to a newb-

1. Don't think its easy: Don't start trading stocks if you don't know what your doing. You will lose money, and lots of it.

2. Trade for Fun: Find an online trading game where you can trade fake money on real stocks. These games are fun and will help you test out trading styles with out losing your piggybank.

3. Yahoo Finance Rulz: Yahoo finance has a database of articles and guides to almost anything that can be done with the markets. It ranges from beginner to expert advice. This is a great place to learn how to short stocks, or why people trade options.

4. Watch CNBC over CNN If you really want to do well in the stock market it is almost a full time passion. You have to read a lot of financial news and watch a lot of CNBC.

5. My Quick pointers for the markets There are several things that drive the markets (and it is markets, there is not just one "stock Market" there are several in the US in even more around the world.) from housing numbers to unemployment numbers to the P/E(price over earnings) of any specific stock.

Things to consider for a newb,

-P/E is a good guide as to if a stock is overbought or underbought, but is one of the worst market idicators as to where the stock will move.

-Earnings Drive the Markets, kind off. Earnings also do in the end drive the markets but short term they often don't. What drives the market more is not what the earnings are now but what people think the earings will be down the line.

-Diversify- If there is one thing that you take from this it is don't put all your eggs in one basket. If you have $2K to invest break it up into 4 or 5 chunks, I would never invest in less then 3-4 stocks at a time, and never invest less then $350 in one stock. Its a balancing act for a newb, but it pays off.

In the end if you don't want to put in the time and watch your stocks, buy some mutual funds.

[tekmoney]

I highly HIGHLY recommend reading some books on this topic. When you search the internet for this kind of thing, especially such a broad topic, you'll get very differentiating opinions and techniques.

There are three solid books to read: The Intelligent Investor by Benjamin Graham
&
The Warren Buffet Way & The Motley Fool Investment Guide.

These books cover the basics of value investing, while Motley Fool gets into some more advanced topics. These books are also very good at explaining why so many people fail at the stock market.

Its no joke, and you really should read those books to get you started, then read a few more before you invest a single dollar.

Tread carefully.

[DaveAPN]

Investing for Dummies

http://www.amazon.com/Investing-Dumm...792901?ie=UTF8

Cheers,

[akula]

there are guides on asx.com.au

it's easy....the trading that is

stock selection is hard...you have to go to uni for that one

[MpyreDzirez]

I second the motion for watching alot of CNBC...exspecially the show "Mad Money." Jim Cramer breaks it down into laymens terms for you, his show is totally for the "homegamers" as he calls us.

[lafayette]

It may seem tedious to understand the whole "brokerage fees", "margin calls", "derivatives" etc but you should know you dont need to.


Keep it simple. Sign up to TD Ameritrade, call them, speak to them on the phone and ask them any questions you have. From there you can Buy and Sell stocks. The interface is self-explenatory.

Now... to actually doing this succesfully - start with the book How to Make Money in Stocks by William J. O'neil. It is based on fact and market research of the best stocks in the past 50 years. No bullshit, straight to the point. Shows you WHAT to do. From there doors will open up to you.

May I recommend the following forum: http://www.investorsparadise.com/b-JoshuaControl/
and the same persons blog:
http://www.mauitrader.blogspot.com/

Use it while you can because this is a professional trader and these sample blogs and forums will eventually consolidate into one fee-based service.

May be tempting to buy some stocks he puts on his 'new swing longs' because of all the stocks he makes which go up %100 or more, but dont be a fool and do it without understanding how it works(you will once you read How to Make money in stocks).


I dont hope this helps, I know it will. But only if you follow it what I've outlined. It has helped me.

Further evidence:
www.seouljoe.com
www.chartpattern.com - Dan Zanger 11k-42million in 3 years.
RevShark - running the RevShark chatroom and newsletter(up to $500 a month)

It's not coincidence that these guys all recommend the same thing. Look at the sites under recommended books.


I'm happy to help with stocks.... btw stop trying to understand EVERYTHING with stocks, it will burn you out. Learn what you need to. Learn the methods to help you make money. Later, once your making money will you begin to actually UNDERSTAND how it works.


Regards,
Lafayette

[akula]

the technical word for the lay public is suckers

the most glaring thing one notices is just how easily and often the public is swindled

the problem is of course that deception of retail investors is engineered into the financial system and most of the investment professionals don't even know when it is that they are deceiving the public

now, I'm not talking about illegal deception, fraud or misrepresentation - but rather science based deception...i.e. a catholic teacher doing a spill on creationism - subjectively speaking, the teacher is doing nothing wrong - but from an objective standpoint, he is full of bs.

it's similar with finance: every time you hear the mass media give out the next stock tip, or whatever, they're selling you a dream that's completely incongruent with the science of asset management

for all intensive purposes - the retail investment public lives in the equivalent of financial dark ages: complete with myth/prophets/superstitions and totally oblivious to the truth of science

now...of course you're thinking "this doesn't apply to me", but you'd be wrong

go and check the returns of your superannuation or 401(k) fund

their failure to clock adequate risk adjusted returns will cost YOU, yes, YOU at least $100,000 over the lifetime of your contributions, and probably as high as 25% of your final balance

that's 100k, or a quarter of your lifestyle, that you should have had - but which you don't, because you probably don't know what risk adjusted returns are, and the mutual fund isn't jumping the gun to explain it to you

that's retail finance. you don't ask questions, and they don't say anything because they don't have to.

different with wholesale clients. they ask questions.

[sunsei21]

all the advice so far is great because there are so many ways to make money in the stockmarket you might want to read the basics and see what you like.I use scottrade as a broker i like it.

my word of advice dont trade on margin its like buying stocks with a credit card if you dont have it you shouldnt lose it!!

[shawnman19]

all the advice so far is great because there are so many ways to make money in the stockmarket you might want to read the basics and see what you like.I use scottrade as a broker i like it.

my word of advice dont trade on margin its like buying stocks with a credit card if you dont have it you shouldnt lose it!!

Buying on margin is not for beginners, but if you know what you are doing it helps increase your risk, which increases your returns.

If you are not an active trader don't trade on Margin.

I would look into a Mutual Fund to start. It will give you some diverfication right up front and you don't really have to watch it on a daily basis.

[DaveAPN]

the technical word for the lay public is suckers...that's retail finance. you don't ask questions, and they don't say anything because they don't have to.

different with wholesale clients. they ask questions.

Daniel... I gotta say... Uhm. I don't have a clue where you're going with this. Are you saying that individual investors are uniformly 'suckers'? That we're all getting hosed because we don't get preferential treatment like institutional investors? Where are you getting this $100,000 figure from?

What questions are you talking about? Companies provide uniform information (prospectus), quarterly reports, and effectively all industry and market information is publicly available.

[TheGodfather]

Watch Jim Cramers Mad Money! BOOYA!

[akula]

Daniel... I gotta say... Uhm. I don't have a clue where you're going with this. Are you saying that individual investors are uniformly 'suckers'? That we're all getting hosed because we don't get preferential treatment like institutional investors? Where are you getting this $100,000 figure from?

What questions are you talking about? Companies provide uniform information (prospectus), quarterly reports, and effectively all industry and market information is publicly available.

good questions

yes, everybody is getting hosed. the existing financial services system is a fraud, but not in a legal sense. it underpays retail investors $billions every year in investment returns. this is money that mons and dads are entitled to, but which they don't receive. the paradox is, without it - things would be even worse.

$100k is the average underpayment in investment returns for a 25 year holding period in an average mutual fund, with average contributions, and suffering the average investment under-performance (2%) against the market index. it's the difference between what a retail investor ought to have earned for their exposure, and what they did earn by virtue of failing to select good investments. the figure comes out of studies.

Availability of information is not the issue. The issue is risk engineering. The public gets sold higher risk investmentments for lower returns than institutional investors and people who understand portfolio construction and analysis.

There is no conclusion other than this: investment management is a complicated science. It attracts Nobel laureates. You can't learn it on CNN. You can't learn it on a forum. Reading a book you bought on Amazon is certainly not gonna help you either.

If you wanna do well, appreciate just how complex finance is and take a course or two on the subject of asset allocation. Spend the time doing the exercises. Get your head around Markowitz.

As a financial planner it troubles me that so many people give investment advice to their peers, who in turn pass this advice to their peers - creating a perpetual cycle of misinformation.

[3ntrepreneur]

I like investing in options sense I am not in it for the phony long run garbage.