Stock Markets Exposed - I want to start playing in the stock market and make some money. How does one start doing this?

I want to start playing in the stock market and make some money. How does one start doing this?

I have never had any experience in stock market trades or anything before....so really I need a step by step way to do this...Do you have to have a lot of money to begin?

Public Comments

First you need a bit of education or your money will be gone in a flash. Go to Amazon and do a search for stock market. Another good place for investing educations is http://www.creatingwealthclub.com
Read "Investing For Dummies" for starters. "Playing" in the stock market will only result in losses.
The stock market is in turmoil, even the experienced are having difficulties showing a profit lately. If it were me, I would invest in a good year after year high yield no load mutual fund. Another would be to open a Charles Schwab Online bank account and be happy with the 4% yield.
Since you have no experience stay away from trying to trade "individual stocks" until you really understand how to trade stocks. Instead visit vanguard.com and learn about mutual funds. Vanguard is an excellent starting point for all new investors.
Getting into the stock market is easy. Making money on stocks is hard. There are a number of discount brokers where you can set up an account and trade stocks without or with help. ' But, first some basics. Owning a share(s) of stock means just that. You have 'stock' in that company. You own a piece of that company by giving them money(capital). A share of stock can costs you less than a penny or even a few hundred dollars each. You trade stocks via a broker, usually. Discount brokers are very, very cheap these days. You can buy stocks for less than 5 bucks. Different brokers have different requirements. There may be minimum in your account they require. Open account either on-line or over the phone. Then you transfer or send them money to fund the account. Next you decide what stocks you want to purchase. NOTE: This is the hard part. As the say goes, "buy low and sell high." Knowing which stock will go up, or down, is almost like gambling. There are no sure things with stocks. Go to yahoo finance and read up on stocks. Go to money.com and read up on stocks. There is no way I, or anyone else, can tell you enough about stocks on Yahoo answers to make you the next Bill Gates by next year. No one knows what a single stock will do. Let me repeat that: NO ONE knows what a single stock will do. Instead of jumping into the pool try dipping a toe in the water first: Mutual funds. Mutual funds are funds that contain a number of stocks. Since any one stock can go up or down owning a group of stocks(diversifying) can decrease you chances of losing money. Of course, most mutual funds will not go up 20% in a day like an individual stock can. But, and there always is a but, a individual stock can also go down 20% in a day. Heck, a stock can go down to nothing in a couple of hours trading. I have most my investments in mutual funds that earn 8-10% each year and have to the last 5-10 years. That's what you want-good steady growth. For individual stocks I pick companies that have been around for years, have steady growth, and make-or do-something I use. I won't tell you what I own because I'm not going to pitch any stocks to you. Don't believe and emails, ads, commercials, infomercials...etc about a stock or how to pick stocks. They are all bogus. Nothing works like DD(due diligence). A few hours reading will put you ahead of many that own stock today.
1. Money. No it does not take a lot of money to start investing. You can actually start with as little as $100.00 per month. 2. Investing in individual stocks. You need to do research on individual stocks before you consider buying them. I would not invest in any individual stock whose regular price is less than $10.00 per share. I would recommend that initially, you look at stocks that are in the DOW100 or S&P 100. You can find those by going to the Dows or S&P's website. 2a. Let's assume that there is a stock you like and it is XYZ. XYZ has what's called a direct investment plan. This plan allows you to start purchasing the stock at $100.00 increments or less, until you get to the level you are comfortable with. Normally, the companies prefer that you buy to what is called a round lot - 100 shares. They hold the stock certificates for you until you want to sell them or take physical possesion of them. This is an easy low cost way to get shares in most stocks with little or no investment cost. 2b. Brokerages. You can go to one of the brokerage hosues. I do not recommend that you use the online brokerage accounts initially, unitl you no more of what you are doing. The individual brokers have seminars that are free for you to attend. They are at no cost. I recommend that you go to several of them for each company and listen to their spiel. I personally favor AG Edwards, but that is my personal choice. Through them you can purchase individual shares in amounts as little as 1 share - such as for Microsoft or for as much as you want. You will pay a fairly higher fee based on share cost. Most will charge you about the same as what one share actually costs, $25-$35, depending. But you have got your foot in the door so to speak. From there, if you start a straight investing plan with them where you send them $100.00 or more per month or week, they will then keep buying shares of that stock until you say stop. 3. Mutual Funds. There are numerous mutual fund companies out there. My preference is Vanguard, T Rowe Price, American Century, Dodge & Cox and Fidelity. Each of these companies offer no-load (meaning no fee charged) to invest into one of their funds. Most have a minimum of $2,500/$3,000 per fund start-up. The best fund for newcomers to start in my opinion is Vanguards Total Stock Market. This fund trades in virtually the entire stock market. 3a. Sector funds. Sector funds are funds that trade in various aspects of the market. They can be energy, health care, midcap funds, S&P 500 funds, technology funds, Asia Funds, Europe funds, etc. These can make you a lot more $ than a regular fund such as the Total Stock Market fund, but tend to be more risky as well. 3b. Bond/income funds. Bond funds are funds that buy and government and municapl bonds as well as corporate bonds and dividend paying stocks. These funds will pay you a cash dividend that you should reinvest to buy more shares. Now these funds are somewhat recession proof. These funds will continue to pay you month in and month out. You will not get rich with them, but rather than do nothing at all, this will build and build. If you buy them, do not necessairly worry at what the price is on a day to day basis. You are looking at the long term where the goal is to build the MF so that it will give you an income. The price per share of one of these funds rarely changes more than $1.00 per share over 3-5 years. What does changes is the yield (how much it pays you) depending on how much they make off of the bonds they invest in. In truth, you can earn almost the same amount or more from a Certifcate of Deposit at a bank. Generally, older investors who are nearing retirement move their $'s into these funds to protect their ivnestments and insure that they have an income outside of SS and other retirements. 3c. Morningstar. You can use Morningstar to look at how the Mutual funds are rated. They use a rating system of 1-5 with 5 being the best. You can go to your local library and see them there as they usally have the most current copies available for free or you can subscribe. Look at MF's that are at least 10 years in operation and look at the track record of the individual who is running it. This will give you a good idea of what to expect the manager can do - assuming that the market goes up vs his peers or the benchmarks (such as DOW or S&P 500). There is so much more, but I hope this helps.