If your employer doesn't offer a match, then you should use a Roth IRA, in which investment income is not taxed as long as you wait until retirement age to spend it. Finally, if you have no income at all then your only option is an ordinary brokerage account. Either of these can be opened through a brokerage firm such as Fidelity or Charles Schwab.
Within a 401(k) there are only a handful of investment options, whereas an IRA or brokerage account will let you invest in almost anything. As a beginner with only a small amount to invest, you should start with mutual funds instead of individual stocks. Mutual funds are collections of several stocks. Buying shares of a fund is safer than putting a large fraction of your wealth into just one company.
Brokerage firms make money off of you in two ways: they can charge you a commission on every trade, and the mutual fund charges an annual fee to manage the fund. These costs are minimized if you buy a fund that doesn't trade very often, such as one that owns the stocks in the S&P 500 index, and then you don't trade funds very often. It's a boring strategy, but ultimately works a lot better than trying to guess which stocks will earn enough to cover those commissions.
Look online for tutorials from financial websites such as www.fidelity.com or www.tdameritrade.com, www.etrade.com, etc. Also, put together an online practice portfolio of stocks you think you would like to have. Pretend you are using real money and "practice" with 3 or 4 stocks without risking any money. This way you can learn what's going on with no risk. You could "buy" 500 shares of OMEX and 10 shares of FSLR and 1000 shares of MJNA and watch them for several months and see what happens with them. Don't forget to add in the cost of buying and selling each time, and remember there will be taxes, unless you buy within an IRA. Do your homework and you will learn!
Hello Ankit. I usually recommend beginners start with Investopedia.com. That site has short video tutorials that concisely explain basic market concepts.
You'll also need to understand basic accounting, fundamental analysis, and market terminology. I usually recommend "Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean" and "Warren Buffett's 3 Favorite Books".
When you're ready to dabble in the market, find an online broker that suits your needs. They're all similar - I personally have used Scottrade for over 10 years and never had a problem.
A few thousand dollars is plenty to get started. I recommend starting out with ~$500 invested in each stock; don't put all your eggs in one basket. Once you get comfortable with trading, then start investing more of your portfolio into undervalued stocks.
I could go on for hours - but I hope this helps give you a foundation to start with.
Before you spend $0.01 on any investment, you must know what you’re doing, why you’re doing it and how to do it. Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.
Begin your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs. Start your education by reading “Investing for Dummies” by Eric Tyson.
To continue your education select some of the following
Beating the Street by Peter Lynch
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
From Riches to Rags, by I.C. Freeley
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Intelligent Investor, by Benjamin Graham
Common Stocks, Uncommon Profits, by Philip A. Fisher
One Up on Wall Street by Peter Lynch
Stocks for the Long Run, by Jeremy Siegel
The Interpretation of Financial Statements by Benjamin Graham
The Lazy Person's Guide to Investing by Paul B. Farrell
Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt.
What Works on Wall Street by James O'Shaunessey
You Can Be a Stock Market Genius by Joel Greenblatt
Your Money and Your Brain by Jason Zweig
Websites that can provide instructions and help with procedures and terminology are Investopedia - http://www.investopedia.com/ http://www.investorshub.com/ and 1 Source for Stocks - http://www.1source4stocks.com/info/stock... or Smart Money
http://www.smartmoney.com/
Visit some of the more professional websites like Zacks Research - http://www.zacks.com/ Schaeffer’s http://www.schaeffersresearch.com/ Investors Business Daily - http://www.investors.com/default.htm?fro...
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.
And when you think you want to invest/trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/
and/or http://www.tradingsimulation.com/
You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest.
Good luck on your journey, study hard and you’ll invest well.
are you in USA? visit schwab office or fidelity they can help you
So, I am wanting to learn how to start investing my money in stocks. I would like to start somewhere but I have no idea what to do or where to begin. If someone could help me with what program to use and what literature to read before starting this. Also I need a portfolio ? How do i decide that ? I have a few grand I want to use is that enough ?
