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There are many ways to get started in stocks. First, take some time to decide want you hope to accomplish with investing in stocks. Then, learn how to do that within your “risk tolerance level.” Are you a risk taker, non-risk taker, or somewhere in the middle? Are you willing to invest a certain amount of money at a chance to make a lot more money, or do you prefer a sure thing? The answer to these questions will help you determine which of the different types of investments to make. It’s your money and it’s a personal decision, so take your time to decide what you’re comfortable doing. If you are the non-risk taker, but still want to invest in stocks, you‘ll probably be most comfortable investing in mutual funds or index funds. This is because they are diversified, which means they contain several different stocks. This reduces risk.

If you are more of a risk taker, you will probably want to do individual stock investing. This will require advise from a professional, some research, and will require you to make decisions about earnings, your portfolio management and future prospects. Here are some basic steps to getting started in stocks:

Get education. Take a class, read about stocks and the market, review online information.

Develop financial goals and determine your risk level. Do you want to invest for retirement? Do you want to invest for your child’s college education? Or, are you interested in making as much money as possible in the least amount of time, etc.

Next, research individual stocks by reading annual reports or other reports on the Securities and Exchange Commission. Their website is online and has tons of information.

Research successful mutual fund companies. Consider investing in some of the same stocks as in their funds.

Invest in local companies that you trust and with which you feel comfortable.

When investing in stocks, it’s best to diversify and avoid putting all your money in just one or two stocks.

If you have time and confidence in your investing skills, use a discount brokerage.

Resist the urge to dump a stock as soon as its’ price drops a few points. Investing in stocks is a long term investment so buy stocks you’ll feel comfortable holding onto for three to five years.



 


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