How To Invest In Stocks
Before you start buying stocks, you’ll need to know some basics on how to invest in stocks.
It’s rather simple as there are are only two ways to invest in stocks. You either log into your online brokerage account to place a trade, or call your broker and have him place it for you (this usually entails extra fees to you and you may not get the best price).
Once logged into your brokerage account, you go to a page designed for placing your trade. You enter information such as the stock symbol, how many shares you want to trade and whether you are buying or selling.
If you don’t already know this, you can BUY stocks (and you hope the price rises so you can make a profit) or SELL stocks. When you sell, you could be selling stocks you own to lock in a profit or to exit a trade gone badly. In addition to that, you can also sell stocks you don’t have! Therefore the brokerage company needs to know if you are selling your stocks or selling stocks you don’t have.
The reason you would sell stocks you don’t own is to make money off of the drop in price of a stock. For example, XYZ is at $50 a share. You think the stock is going down so you sell the stock and get $50 a share for each share you sold. This may sound like free money but it is not.
In reality, you have to borrow shares from your broker in order to sell them to someone else (remember, there is always another trader on the other side of your transaction). Eventually your broker will want his shares back. At that time you will need to buy the shares back on the open market. If the stock went down in price to $30, you just pay $3,000 to buy them back and keep your $2,000 profit. On the other hand, if the stock goes up to $60 instead, you need to buy back at $6,000 and take a loss of $1,000. As you can see it is possible to make money on stocks whether they go up or down.
Now that you know how to invest in stocks, the next step is to find stocks to invest in. You can peruse the stock tables for stocks, listen to some “guru” on TV, even subscribe to software or newspapers to help you locate stocks.
There is one other way which is much easier and faster. Find someone who can be your mentor. Someone who makes a living from trading stocks. See if you can follow along with and learn from them. In this manner the mentor does the work and you get to profit from it, not only in stock gains but in the knowledge that will be bestowed upon you as your mentor teaches you the ropes.
Normally mentors will charge high fees. I’ve personally have paid $10,000 and more to learn from the best when I started.
Another way to get started fast without the high cost of paying a mentor is to subscribe to a trading strategy that is not only extremely profitable, but also easy to follow. I have such a strategy that I do make available to the public with proven and documented returns. You can find more information at William Boyett’s Index Trading Strategy.
I hope this helps you get a start on stock investing and trading. You’ll find many other articles here that will help you locate stocks and generate profitable strategies, so feel free to look around.
