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Jorge asked in Business & FinanceInvesting · 1 decade ago

Best way to get started in stock market trading for a beginner ?

I'm interested in the stock market but have no experience with it. How would someone knowledgeable of the market recommend a beginner get started?

15 Answers

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  • Joe
    Lv 6
    1 decade ago
    Favorite Answer

    Newbies tend to think that the best way to play the stock market is to buy stocks then sell them a day or few months later, then repeat the process. This method of investing usually loses money. The people who buy and hold for long periods are the people who make the most money.

    Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. The links below have on-line questionnaires which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of investment.

    You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.4%.

    I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest management fees. For stock funds, I like putting ~70% of one's money in the Vanguard Total Stock Market Index Fund. and ~30% in the Vanguard Total International Stock Index Fund. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be a good all-in-one stock and bond funds for an IRA. (If you have less than 3,000 dollars, you'll have to use the Target Retirement Funds) There are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

    Once you have stared investing, you need to keep adding money on a regular basis. Many funds allow you to set up automatic investment programs that take a set amount of money out of your bank account each month.

    If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

    If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

    I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don't work. Particularly bad are people that teach "technical analysis" systems that sound impressive, but don't work.

    Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

  • Anonymous
    4 years ago

    1

    Source(s): Invest in Forex Tips http://teres.info/TheTradingCode
  • 4 years ago

    2

    Source(s): Automated Binary Trading http://netint.info/AdvancedTradingTechnology
  • 6 years ago

    RE:

    Best way to get started in stock market trading for a beginner ?

    I'm interested in the stock market but have no experience with it. How would someone knowledgeable of the market recommend a beginner get started?

    Source(s): started stock market trading beginner: https://trimurl.im/c99/best-way-to-get-started-in-...
  • Anonymous
    5 years ago

    How can you cash in on the potential growth that penny stocks have to offer? Learn here https://tr.im/tradepennystocks

    There are three things you'll want to look for when picking a penny stock to make sure that you don't get penny stuck: Underlying business, financials, and footnotes.

    When it comes to penny stocks, a company's underlying business is even more important than it is in exchange-traded stocks. That's because the penny stock world is home to "shell" companies that are legally incorporated, but don't have any business operations

  • 1 decade ago

    I would recommend setting up an account on a site like thinkorswim (part of TDAmeritrade). They have a "paperMoney" option which allows you to practice trading with fake money. Set the account up first thing. Then as you are learning about investing, you can go right into your account and play around. If you have money you can stand to lose, you might consider buying some shares of a company to start your portfolio. You will ultimately want to try to earn money but if you were to spend $50 on some stocks (even if it goes down), the learning experience will be worth the money invested.

  • Anonymous
    7 years ago

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    According to recent studies made by World Bank, the coming crisis will be far worse than initially predicted. So if you're already preparing for the crisis (or haven't started yet) make sure you watch this video at http://www.familysurvival.tv/ and discover the 4 BIG issues you'll have to deal with when the crisis hits, and how to solve them fast (before the disaster strikes your town!) without spending $1,000s on overrated items and useless survival books.

  • Anonymous
    5 years ago

    A lot of interested traders are asking themselves the question if you can really make money with binary options? The answer is that you can indeed make money in binary options trading. Learn here https://tr.im/BinaryOptionsStrategy

    Obviously this is a perfectly legitimate question considering that most people have not traded binary options in the past and generally believe that investing is a very difficult activity.

    However, you will have to put an effort into it. You will have to learn money management, reading of charts as well as the usage of indicators.

  • ?
    Lv 4
    5 years ago

    In binary options you will have the possibility to predict the movement of various assets such as stocks, currency pairs, commodities and indices. Learn how you can make money trading binary options https://tinyurl.im/aH5D1 An option has only two outcomes (hence the name "binary" options). This is because the value of an asset can only go up or down during a given time frame. Your task will be to predict if the value of an asset with either go up or down during a certain amount of time.

  • 1 decade ago

    Seriously read a ton of books on trading. Also, you can trade stocks out of a fake account to practice too. Just Google it and you'll find more info.

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