How to buy Stocks in todays Markets

How to buy Stocks in todays Markets

The ride is bumpy, but stocks are cheap

Investing in the stock market was never easier, nor cheaper than it is right now. And its a proven fact that over time, stocks make money. Is it gambling? Some people think so. I like the term investing for the future better. There are a lot of ways to invest with out the money coming directly out of your pocket.
Just make sure you do a little research before jumping in to any investment.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

·       Either a job which offers retirement benefits, or a few dollars in the bank(currently paying little to no interest)

·       A time frame of 3-5 years before you REALLY need these invested dollars

·       Being able to stomach a roller coaster ride.

1.      Step 1

How dividends compound

Is there a certain company that you like to own a part of, maybe the company that you work for (hopefully a strong stable company)? Or how about a favorite store, or a product out there? The great thing in this country is that we have the ability to own stocks in our favorite companys. Hopefully the company you like, pays a good dividend. This is like them paying you interest on the money you invested. Individual stocks can be risky, as their share price can fluctuate alot. So in todays markets, it can be a roller coaster ride owning stocks.

2.      Step 2

Invest in a group of stocks for more diversification

Maybe there is a whole segment of the market that you would like to invest in (solar energy, wind power, utilities, energy, etc.). If this is the case, a mutual fund, or ETF would be the way to go. They invest in a group of stocks in a certain segment of the market. Therefore, you have ownership in numerous companies. Although somewhat risky, their prices usually do not fluctuate as much as an individual stock. You can buy mutual funds directly through some fund companies (called no load funds) or go through your broker (and pay a sales load)
My advice is to do your own research, and avoid paying sales loads. They eat up alot of your profits.

3.      Step 3

There is alot of education available

ETF Funds, better known as Electronically traded funds are bought and sold like stocks. There is a lot of research out there, but I like these a little better than mutual funds.The reason is that I can sell them more quickly than I can sell a mutual fund. These funds are made up of a group of stocks in the same industry. For example my energy ETF I own
(the ticker is XLE) owns stocks such as Exxon, Chevron Corp, ConocoPhillips,Schlumberger Ltd, Occidental Petroleum. Therefore, I have ownership in all these companies. But I only pay one price to buy the ticker XLE. It trades as though it were a stock.

4.      Step 4

Reinvest the dividends into more stock ownership

Try to invest in companies that have dividend reinvestment options. This means that when the company pays a dividend, the proceeds buy more shares of the stock, rather than putting the money in the bank for you.
(The tax consequences are more to your advantage) Not all brokerage firms offer this option. I do most of my trading through Scottrade, which has GREAT research abilities, but does not offer dividend reinvesting. (Trades are $7.00) So I recently opened another account with SOGO Trade ($1.50- $3.00 a trade) which does have a dividend reinvestment program. Do your research before investing. I will be glad to answer any questions you have.

5.      Step 5

Hang on, its only a ride!

Investing can be very scary, or very fun and challenging. My husband and I have retired at 55 and 53 years old, because we made alot of good investments. (Some were in real estate properties which we still own)But the point is, if you don't save for the future, you will work hard all of your life. A saying I will always remember is, pay yourself before you pay everyone else. Even if it is a small amount. A penny saved, IS a penny earned! Don't be embarrassed to pick up a penny off the ground. It could be the foundation to a fortune! I hope someone can benefit from these tips.

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