Money Instructor Home Basic Money Skills Lessons Earning and Spending Money Lessons Saving and Investing Money Lessons Interactive Money Lessons Suggestions and Requests

STOCK INVESTING BASICS FOR BEGINNERS MUTUAL FUNDS BEGINNING PRINCIPLES INFORMATION IDEAS INVESTOR LEARNING INVESTMENT TYPES PERSONAL FINANCE GUIDE 101 ADVICE FREE EDUCATION ARTICLE

 

 

 

The basics of stock market investing.

 
 

STOCK INVESTING BASICS

 

In today’s economy, buying stock can be a scary experience, especially if you don’t think of yourself as particularly stock-savvy.

 

And you definitely need a little more advice than the old “buy low, sell high” line before you take the stock buying plunge.

 

That’s okay. All of us do. Because first of all, stocks aren’t just mere pieces of paper, they’re actually shares in the companies. That means that you own a part of the company. When you buy stock in any company, you’re investing in that company’s products, and in return, you have a claim in its assets and earnings.

 

  

 

 

 
BASICS ON STOCKS

So how do you know which company or companies stock to buy? One of the first things you need to do is research any company you’re interested in. Find out how the stock not only is performing now, but track how that stock has performed over the two last year, at least.

 

And look for information on any mergers, acquisitions, new product launch(es), and major changes in management. These can have a dramatic affect, good and bad, on the future earnings of a company. Knowing about these things in advance can keep you from making risky stock purchases.

 

Also, don’t base your buying on price alone. A $2 stock in a new company that seems to be growing quickly may seem like a great deal. And it can be. But the returns on a $100 stock can be a lot higher if the company has high earning prospects. So comparison shop to find out where your stock dollars are likely to bring you’re the highest returns.

 

Remember that diversity is key when it comes to buying stock. This means don’t put all your stock eggs in one basket. You want a wide variety of stock in your portfolio. Drug companies are hot right now and a good bet, in spite of the controversy that seems to surround them. But you should round out your stock purchases with maybe a leading electronics company and other companies that represent different categories of goods.

 

After you’ve bought your stocks, hold on to them stocks for a while. Fast trading can actually cost you a great deal of earnings in the long run, even though you are making some money quickly. The taxes are also higher on short-term stock trades, which definitely costs you money.

 

Finally, consider getting advice from a stockbroker. They’re trained to understand your investing needs and can help you with your investments. They can educate and guide you through the stock market maze, especially if you’re a beginner. A good one will be open to answering your questions and to hearing what sort of stocks you want to invest in. Always remember it’s your money—and ultimately your decide what stocks you want to invest in.

 

 

 

For teaching and learning about investing:

Teaching Investing Lessons
Teach and learn basic investing and financial principles, including stocks, the stock market, interest, income statements. Lessons, lesson plans, and worksheets.

  

 

 

 

 

Back to more information on investing

 

 

More money and personal finance information

 

 

To teach and learn more money skills, personal finance, and money management, please go to the Money Instructor home page.

 
 

Learning Basic Investing in stocks - online penny research trading dummy business growth rate amateur value definition emerging economy outlook aggressive investing long term Teaching investing basics Teachers High School Students Secondary education Adults Course Teens Teenagers Kids Children Student Help - Practical Curriculum Thematic Unit Dummy Wealth Classroom - Finding Stock Fund Investing for Stocks and Mutual Funds

© 2002-2005 Money Instructor