Tuesday, August 10, 2010

Beginners Guide To Stock Market Investment


What is the best advice to help start off a Beginner Guide To Stock Market Investment? Don’t try to learn everything at once. Instead, start by creating an investing plan. Then research the opportunities that match up with your goals. You can always expand your research as your investment knowledge and confidence grows. The creation of an investment plan starts by first identifying what you want to achieve, and how you will be done. On a sheet of paper, write down the amount of money that you can afford to invest on a monthly basis. Next write down the reasons that you want to begin stock market investing, and assign an amount of money to each investment goal. Then, separate them into categories:


Short-term investments - Less than a year – i.e., a vacation or money for the holidays. Short-term goals can often be met through the use of a CD or by opening a money market account.

Certificates of Deposits (CDs) are a good safe way of investing for beginners, and are offered with various maturity dates and interest rates by banks and brokers.

Money Market Accounts are also a safe bet. They are offered by banks, and are therefore FDIC insured. They are also very liquid. They usually come in two flavors: tax-free and traditional accounts. Look around for the interest rate that will come closest to meeting your investment goal.

Mid-term and long-term goals usually involve working with a broker to invest in the stock market and/or taking advantage of various opportunities offered by your State or employer.



College funds:

Every state now offers a 529 Prepaid Tuition Program

The Coverdell IRA (formerly known as an Educational IRA) can be opened through a brokerage firm.



Stock Market Investment
Retirement Planning:

401K's are offered through employers.

Traditional IRAs and Roth IRAsare both available through brokers.


Stocks on the stock market involve more risk than other methods of investment for beginners. It is therefore recommended to start with mutual funds or work with a broker under a managed account.

Mutual Funds are lower risk because they are diversified. They are made up of many different stocks. If one stock goes way down in price, the overall mutual fund only goes down a fraction of the amount. Mutual funds are divided into numerous risk categories such as: Capital, Income, Growth, and Aggressive. You would choose one based upon your goals. Research and compare the various funds in that category through either your broker, or online. You’ll also want to read the fund’s prospectus for an overview of the mutual fund’s risks and performance history.

Bond Funds are like mutual funds, and are separated into various categories organized by their term length. A beginning investor should select the term-length that best meets their investment goals then research and compare the various bonds offered. Each bond has a prospectus that you will also want to read to fully understand the bond’s risks and performance.

Beginner Guide To Stock MarketArt and Collectibles Investing For beginners, art or collectibles is very risky, therefore invest in something that you are either passionate about or that you truly like. Maintain a narrow investment focus, get involved in your investment’s community and follow a trend. You will be in it for the long-term with no guarantee of certain returns.

Hopefully this short stock market for beginners guide has made a few things more clear for you. Whether you are investing in bond funds, art, or stocks, it will always be important to do your research and know what you are buying. Learn as much as you can from books or articles, and then do specific research on each individual investment. It may seem like a lot of work. As you probably know though, success with anything involves lots of small amounts of practice or learning that adds up to a champion athlete, or in this case, a successful investor. I have been looking to invest in the stock market pretty soon and I just wanted to share what I've learned through research.




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