How to start investing in stock market.

April 10, 2009

1. Save Before you can invest, you need money. Don't start investing until you have property, $10,000 in savings (to be kept in savings) and another $10,000 to start investing with.

2. Read. Warren Buffett made his entire fortune investing, and has lots of very useful advice for real people who want to invest. Motley Fool is an excellent online publication, as is the Tycoon Report, and Wikinvest.com is great place to find information on companies and concepts in the market. It is also helpful to conduct due diligence on the investment information sources themselves. Check out the performance and advice of websites, newsletters and blogs. One resource to conduct this research is at Greedreviews.com

3. Buy a small portfolio of stocks. Blue chip stocks perform well, and are often fairly priced. Stay up to date with different value investing websites such as Motley Fool or Fallen Angel Stocks to see what kind of deals are out there. If you do not have the time or motivation to learn about individual stocks, mutual funds provide a low risk investment that follows the market trends very closely.

4. Forget about it. Avoid the temptation to sell when the market has a bad day.Invest in a regular and systematic manner. Set aside a percentage of each paycheck to go into savings. Always leave at least $10,000 in cash around for emergencies.Consider selling portions of your holdings as a stock appreciates. This bias of selling losing stocks quickly and completely and selling gaining stocks slowly and partially may increase your long-term chance for success.

5. Consult a broker and take part in simulated stock experiences. Read as many books and articles as possible written by experts who have successfully invested in the types of markets in which you have an interest. You will also want to read articles helping you with the emotional and psychological aspects of investing, to help you deal with the ups and downs of participating in the stock market. It is important for you to know how to make the smartest choices possible when investing in stock, and even if you do make the wisest decisions, to know how to deal with loss in the event that it happens.

6. Learn how to budget your money and to spend your earnings wisely. Most investors have to be careful not to spend any of their profits, and to keep some aside for future use, and for retirement, as well as emergencies.

Get free updates in your mailbox.