1. Your Questions About How To Invest In The Stock Market
For Beginners
Linda asks…
Stock Market Beginner?
What would be a good book or internet school for a person that wants to learn to invest but
has no possible idea were to start.
i would like a book that teaches you evrything about the market including. Market Terms,
currency trading, internet trading, explains what hedge funds and bonds are, and tells you how
to invest when starting with nothing.
I am 14 and plan to start investing within the next month
also i will be taking a general business class this year in school and i would like to excel in that
class.
Steve Winston answers:
Start at http://finance.yahoo.com and on the investing tab, choose education. That will be a
good set of primers. Then you will better be able to know if/what you want to learn more about.
But in the mean time that will cost you nothing and get you started.
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2. Mary asks…
Stock market for a beginner.?
I'm 21 yrs old and I am starting to think about the future. How do I begin and learn how to
invest in stock?
Steve Winston answers:
You must begin with assessing yourself. Understand your personal monetary strength, financial
goals and risk tolerance. Then look for investment options that fit your investment appetite. This
can be either mutual funds, stock market or real estate.
Then zoom to individual asset classes looking for profitable venture. This might be difficult if you
are first timer, but soon enough it will become handy as you moves along. Don't be afraid to
much. Get yourself started, start small and be prepared to lose some. You'll gain more
experience along the way.
Step by Step Stock Investing for Beginners
http://www.stock-investment-made-easy.com/
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3. James asks…
I need an expert on the stock market, I am a beginner.?
I know the basic information about stocks like what they are, but I do not understand what all
the numbers mean when looking at stocks. Like what do all these numbers mean?:
http://www.google.com/finance?q=NASDAQ%3AGOOG
Please help, i have about a month until i invest in my first stock.
Any tips I need to be successful?
Also, how much money can the average person make in stocks in about two or three months?
Thank you for anything you have to say.
Steve Winston answers:
Please read this answer I wrote to another yahoo answers user about what the numbers mean.
In that question I explained what the yahoo finance numbers mean, but these numbers would
apply if you looked up the same stock in google.
Here is the answer to read about what the numbers mean:
http://answers.yahoo.com/question/index;_ylt=Appe7nG6ZsoPKc4VRdyGFfvsy6IX;_ylv=3?qid=
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4. 20111019143223AAO5Erv
BTW, i did not explain beta but beta basically says if you multiply the beta number times the s&p
500's return for a period of time (beta is actually a measure of the stocks movement compared
to the whole market) that should be the return for the particular stock for the period of time.
Making sense of beta:
google's stock price is $583.67. Lets say the s&p 500 goes up 1% tomorrow. The google stock
would be expected to go up to the price given by this formula: $583.67(price) * 1.14(beta)*
1.01(s&p500 percent change).
S&p500 and dow jones industrial index are two index's which measure market movement as a
whole.
The best tip I can offer is invest in stocks that will increase their earnings... (increased earnings
in the present or future raises a stock's price, there is an advanced formula for calculating a
stocks price... You probably would need to take a finance class to understand it)... I recommend
if you do not know the increase in earnings of companies that well that you invest in dividend
stocks. Dividend stocks pay you to hold the stock from the company's money.
I would recommend an etf to invest in instead of just one stock. You should diversify your
investments to reduce risk. You could invest in the SPY which is a fund that invests in the
components of the s&p 500.
Or you can find dividend stocks here.
Http://www.dividendstocksonline.com/dividend-yield/
How much money you make in stocks depends on a stocks performance and market
performance.
This is why i recommend dividend stocks. If you invest $10,000 in a stock and the dividend rate
is 5% you will surely make $500 profit for holding that stock for 1 year. As far as 2-3 months, the
money you make will depend on the change in price for the stock. If the stock goes up 10% and
you invested $10,000 you made $1000. This is how the stock market works, what makes stocks
go up is increases in earnings, increase in demand for the stock, and buyout speculation.
Stocks are treated like pieces of a company, when you own a share you own a part of a
company. So when you sell a stock its like selling a part of the company to another person. The
price you get will depend on the value of the stock you sell, which can increase from the
previous reasons I mentioned.
I wish you well in stock market investing future. Be careful with your money, stock market can
get addicting because you earn money when investing. Don't go invest in companies without
doing research... Which I informed how for you earlier in this post with a reference to the other
question I answered.
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5. Nancy asks…
How much money should you expect to make starting out in the
stock market?
Im thinking about trying to trade stocks. I have no experience at all besides from what i pick up
in the wall street journal. Im gonna invest 500 bucks at first and see how it goes. I just wanted
to know if you guys had any tips for beginners and what i can realistically can expect to make
with a 500 dollar investment. I appreciate the help.
Steve Winston answers:
$500 is too little to invest in stocks.
At the outset, you should expect to lose money. For this reason, trade small. Here's the advice I
typically offer:
An introductory book like _Stock Markets for Dummies_ is a good place to start. This will give
you a basic explanation of most things there are to know about the mechanics of stock investing
including useful websites to surf.
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6. Investors Business Daily (IBD) is a solid daily resource (and its complement,
www.investors.com ). It's a better newspaper than the Wall Street Journal and it is built around
a particular approach to trading. You could read _How to Make Money in Stocks_ by William
O'Neil too--he's the founder of IBD.
Search your local library for other books on stock investing. Try to absorb as much knowledge
and understanding as you can.
After you have extensively researched and gained a solid foundation/education then look to
open a brokerage account and paper trade--this is trading with play money before you put real
capital at risk. You should do extensively before you eventually place your first trade live. Your
early live trades should be with a very small position size. Only increase position size when you
have done well to limit losses when the market has turned against you.
Maria asks…
Beginner's guide to the stock market?
I want to use some of my first few checks to invest in the stock market, but I'm not sure
exactly what goes on. I know stocks and stock prices are driven by supply and demand, but
other than that, I'm clueless. I have a few questions, and I'd really appreciate it if someone could
help me out.
1. What are some of the basics of the stock market?
2. How do stocks effect taxes?
3. How do you "research" a company?
4. Anything else I should know?
I think that's it. Does anyone know of any reliable books or websites where I can get more
information on the background of the market? I've heard e*Trade is one of the best options to
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7. trade stocks and that they have tutorials. But I don't know if that information is free or if I need to
pay, and I don't start my job until next week.
Thanks for any help!
Steve Winston answers:
Investopedia is where I started.
1. I'm not sure what you mean by basics but you should look up the following terms because
they are predictors of if you should buy or sell the stock although its never definite and in this
stock market where everyone sells once something a little bad happens its harder to make
money
search these terms up on investopedia.com the encyclopedia on investing
dividends
EPS
P/E
market capitalization (or market cap)
blue chip stocks
yield
SEC
balance sheet
earnings
and then you should look up words that you dont know that you come across on investopedia
as well
2 Stocks dont really effect taxes but if you make money in the stock market you get taxed on
those gains at different percentages, I'm not sure what they are yet but I believe Obama or Bush
raised them to 40%
3 use the terms I selected above so that you can "research" companies. But to start out I would
start by opening an account at fidelity or any brokerage that offers Dividend Reinvestment
Program or DRIP for short. Then reinvest your high yield dividends in that program which is how
I get my high gains.
4 If I were you I would go for the stocks paying high yield dividends which you can look up on
google because the company is basically paying their owners(you as a share holder) some
money that they made each quarter.
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8. Charles asks…
i am a beginner in the stock market, i have a question,come in pls,
lotz of thanks?
when you see the price of the company in yahoo finance page. For example, Yahoo stock is
around $26, how much is the least amount that i have to put into invest, please tell me how
can i calculate it out? please give me an example.
Steve Winston answers:
$26 is the least to invest, if you want only one share. $52 for two shares, etc.
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9. Helen asks…
I'm 14 and Want to Get Involved In the Stock Market?
I'm 14, and want to get involved in investing early. I've been researching the stock market,
because no one has ever told me what it actually is, and I think I have some understanding of it
(its basically buying and selling parts of a company) , but if you could give me an explanation it
would help.
For a beginner, what would be the best stocks to invest in. I think that oil and gold would be
the best, because gold never seems to lose value, and gas prices being so high right now. But,
what are other good stocks? Should I invest in things I know are popular, like corporations like
McDonald's and Walmart?
I have $104 to invest. I don't think I can get a broker, but I hear you can invest through your
bank. So, how can I get involved in the stock market, could you explain the stock market,
and what should I invest in?
Steve Winston answers:
Yes, you are right that it involves buying and selling parts of a company, i don't know what else
to tell you i could go on for paragraphs. The best thing to do would be to go on wikipedia and
read it over and over again. One vital thing you should remember and understand is that, a
company can be doing phenomenally well, but the stock can still go down; when it comes down
to it, the only thing that drives a stock price up is the conglomerate of investors trying to buy the
stock. Oil and gold! Bingo! You are smart! IF i were you, I would go on market watch and sign
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10. up for virtual stock market games, its just like the real thing but you aren't playing with real
money, you still get to learn it and practice with it.
Usually the best things to invest in that are safe, are large corporations as you said, such as
coke, Pepsi, Mcdonalds, because they usually aren't very volatile; companies like these usually
pay dividends as well, but you're not going to see their stock price rampantly jump up because
they are already an established company.
Because you only have $104, you are right you should avoid the brokerages, i know e-trade
charges me $10 per trade and charges you per year if you don't have a minimum. Silver and
Gold are excellent investments because there quantity on Earth remains the same! You could
take your $104 and buy some REAL silver, but this is a great way to invest your money without
any brokerage commission fees.
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