I just turned 18, and iv heard alot about the stock market, but i have pretty much no idea of how it works. Can someone explain it to me, and explain how i might be able to make money off the stock market. Im interested in buying a few stocks but i dont want to waste a bunch of money so i dont want to go in more than $50 and ill see how it works and go from there. Can i get some advice?
Don't worry about buying anything: learn first.
An introductory book like _Stock 马克ets 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.
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 stock market questionsinvesting. 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.
Good stuff.
John W seems to give lots of people around here headaches.
On $50 trades, with a $5 commission, you will be paying 20% off the top for a buy and sell. The total market cap to GDP ratio suggests that the stock market should return about 6.2% per annum and economists use 12% per annum as a proxy for stock market returns which means you can expect to have to hold your positions for about 4 years before breaking even. Simply buy $50 stock market questionsbonds until you accumulate enough for the initial investment into a total market index fund and then make your contributions there. You don't want to be trying to pick stocks till you have a large enough portfolio to allocate your assets appropriately. You'll just lose your shirt trying to run before you can walk.
Explaining how the stock market works and how to make money in it is a long and tedious subject. I would recommend becoming educated on the subject by reading a few books. There is a dummies book about investing that would be helpful as a start. A few other good reads are The Intellegent Investor, One Up on Wall Street, The Essays of Warren Buffet, Common Stocks and Uncommon Profits, and The Interpretation of Financial Statements.
The best advice I could ever give is "buy low, sell high". Buy into stocks when everyone is freaking out and the market is crashing. Sell when everyone is happy and prices have had a huge run up.
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