How to Get Started in the Stock Market

by eHow Business Editor

The stock market can be a valuable tool for gaining more income as well as strengthening your insight into the world of business. Playing the stock market is usually reserved for stock market analysts and financial planners but the average person can learn the stock market just as well as the professionals. Get started in the stock market and start managing your own financial portfolio with the ease of a learned pro.

Start by doing some basic research into the stock market. Answer long standing questions you may have such as; what is the stock market, or how do you make money in the stock market. You should be working with a solid foundation of knowledge before you attempt to dabble in the market.

Read a financial newspaper such as the "New York Times" stock section or the "Wall Street Journal" to learn more about what is happening currently in the market. Stay updated on financial news every day.

Pick five stocks to follow and analyze their trends over the past four or five years. Utilize the Internet as a research to help you track their progress. Create a flow chart with information regarding those particular companies net inflow and outflow and try and distinguish trends amongst the various fluctuations in income production.

Play a virtual stock market game on the computer. Check into various online stock market games as they are a great primer to playing the actual market. Engage in the virtual market for a while before starting on an actual investment opportunities.

Decide what you want to invest in the market for; perhaps you are saving for your future, a house, a new car, or to amass a larger net worth. Determine your risk tolerance and how much fluctuation you can handle without getting nervous to pick on an adequate stock. For beginning investors, mutual funds are usually the safest and least anxiety provoking.

Figure out where you will get the funds to invest in the market and set aside anywhere from $500 at first to buy a few shares of the stock you've chosen. Find a reputable stock broker to help you buy and sell your shares of stocks. With your new knowledge, you might not need a full service broker but for beginners it is often recommended.

Tips

  • Remember that your 401(k) is essentially a stock investment.
  • You don't have to be debt free in order to invest in the stock market. However, make sure the amount of money you put into your stock portfolio is an amount you can easily part with should the market forecast change.

Warning

  • Do not invest in a high stakes investment with a lot of money on your fist go into the market. You could get shell shock from a drop in value.