HOW TO BUY STOCKS FOR BEGINNERS AND DUMMIES

Get Started Buying Stocks By Opening A Broker Account

In order to buy stocks you will need to open up an online account with a discount broker. It is easy to do and if you have signed up to almost anything online, you can figure out how to open a stock account.

TradeKing (now Ally Invest) offers very low trading fees of just $4.95 per trade and they get great reviews year after year from customers and financial publications. Why pay double the fees (like many other brokers charge) when you can get the same safety and stock trading experience with TradeKing?

However, there are many other brokers you can choose from and I have listed 8 others that you might also consider. Each of these charges between $5 and $10 per trade and they are all reliable and safe:

1) TradeKing (low $4.95 per trade)
2) Scottrade
3) Fidelity
4) TD Ameritrade
5) tradeMONSTER
6) E*Trade
7) Merrill Edge
8) OptionsHouse
9) Charles Schwab

How To Pick A Stock To Buy

Once you open your stock account, you need to put money in the account. You can do this by sending a check or by transferring money online from your bank. Either way is okay and the only drawback of the check is that it will take longer.

When the money makes it into your account you can then start buying stocks!

The question is though, which stock or stocks should you buy first?

Unfortunately THAT is the question that only you can answer. It is your money and you must be prepared to make the decisions on how to invest it. You can listen to the stock analysts and pundits but remember, they are only giving their opinion. Listening to them can result in you losing money.

It is best if you start slowly and NEVER put all your money in one stock. Ideally you should have no more than 5% of your money in any one stock but that may be hard to do right away. Your goal should be to find solid companies in different industries to invest in which will effectively reduce your risk to any one business sector.

Stick With It And Keep Investing

It is important that everyone learn how to buy stocks and participate in the market so that they will be able to get bigger returns than they could through investing in CD's and things that only give you simple interest (which is near 0% right now).

History has shown that stocks are the best place to invest your money. By that I mean that the stock market has given investors the highest return of any other investment vehicle when investing over a long period of time. Even though there have been bad years in the stock market, anyone who has stayed invested through the good times and bad should have done quite well.

Most anyone can figure out how invest in stocks. It certainly doesn't take a degree or any specialized training to figure out how. The media might make it sound harder than it is but in reality, all it takes is a commitment to learn over the many weeks, months, and years of your investing career.

HOW TO HANDLE BIG STOCK MARKET LOSSES

Right now, anyone who is in the stock market might be sitting on some big losses. In fact. probably almost everyone who owns individual stocks or is in mutual funds has huge losses right now in 2008. This is a big barrier for stock market beginners and dummies and it makes them wonder whether the stock market is worth learning. If you have all your money in an IRA then you will have the same big losses but at least you wont have to mess around with your taxes yet.
There is a $3000 maximum loss that you can declare every year on your taxes for stocks. $3000 is hardly anything in today's economy and so most people are going to have to carry over their losses for many years to come. What a pain in the ass....thanks, you slimey polititions in Washington.

Everyday lately I sign on to my computer to see how much I lost that day. It used to be how much I made, then it went to maybe I made money or maybe I lost, and now it is always how much I lost everyday in stocks. Huge stock market losses are enough to make people sick and it is hard to put everything into perspective.

How do you deal with losing a months pay in one day in the stock market? Depending how much money you have in the stock market, there may be days where you lose way more than a day's pay. Everyone is always trying to find the hot stock and there are always stock market gurus and analysts who will sell you their "hot stocks of the day". When the market is down big like it is now though, there aren't a whole lot of super hot stocks. Everyone is losing money.

In order to deal with huge losses in stocks, one really has to learn how to compartmentalize things. The stock market is the stock market, work is work, your family is your family, life is life, etc. They are not related. Also a little recession humor goes a long way to with helping out your disposition. If you are properly diversified then these big stock market losses will not effect you as much. Everyone needs to learn how to diversify, especially stock market beginners.

IS NOW A GOOD TIME TO GET INTO THE STOCK MARKET?

If you are asking the question "is now the time to buy stocks" then you might also be asking "is now the time to buy real estate". Look how much both the stock market and real estate market has gone down just in the last 3 months. If you have cash right now, you are in a great position to profit.

The reason (well one of the reasons) we are in this mess in the first place is that so many people are in debt. People have been living a lie and living well above their means. Just because someone is living in a million dollar house does not mean that they have money or are rich. They could be deep in debt and on the verge of bankruptcy and you would never know it. People have been buying houses that they cannot afford and assuming that their value would go up. As long as the value of their house continued to go up they were fine because they could alway refinance.
Are you someone who is in debt? If you are then you are in trouble right now because you are not going to be able to acquire more debt to pay off your old debt. Some people keep on getting new credit cards to pay off the old credit card bills and continue to go into more and more debt. If that sounds like you then I am afraid you are part of the problem.

What if you lose or have lost your job? Many people are losing their jobs right now because of this mess and they are already in debt or have little savings. What are they going to do now with no job. With no job they can't afford to pay their mortgage and might lose their house. Since house values have gone down they don't really want to sell because they will have a "loss" from what they could have gotten a year or two ago. Maybe there will be no one willing to buy the house anyway. If they can't or don't want to sell their house to downsize and they can't get new credit to pay the mortgage, what are they going to do?

What does all this have to do with the stock market you ask? Nothing other than most people who have no savings or are in debt will not be able to take advantage of the beaten down stock market and profit from it when it explodes back up. Maybe the stock market will never "explode" but you can be sure that sometime it will start to go up again. It doesn't matter whether you are a seasoned stock proffessional or a stock market dummy or beginner, one thing is for sure, if you have no cash then you can't invest and play the game.

Is right now a good time to get into the stock market? Maybe or maybe not. Today might or might not be the bottom of the market and of course no one can see the future. One thing is for sure and that is that it is a better time to invest now than it was 3 months ago. It is always better to buy stocks when they are low than when they are high as they have more room for growth.

Right now there is a lot of fear and panic in the market. People are scared to buy stock and they are selling and over selling stocks. The stock market for beginners is a scary place and many people are scared into selling. If you can find stocks that are oversold then now is a great time to buy stock. There is no guarantee any stock will not go down further but it has to be getting somewhere near the bottom.

This type of housing and stock crises does not happen everyday. Many people will lose and have already lost fortunes. But these kinds of dark times are not bad for everyone. It is in times like these that you can find great buying opportunities and make a killing. If you have the nerve to do the opposite of what everyone else is doing, in this case buy when they are selling, at some point you will start to profit. The trick is trying to determine when the bottom is near. Most people live their life looking back and saying "what if I only knew". It will happen in this 2008 market meltdown as well. At some point stocks will rise again and if you are not on board you will be left looking back and saying "what if".

This does not mean that every stock will be a good buy. Another reason we are in this mess is that companies are going bankrupt. Companies that go bankrupt or are on the verge of going bankrupt are not "good buys". The trick is finding good stocks that are too low because they have been oversold because of the stock market panic. Stocks for beginners are going to be hardpressed to choose the right ones.

It is best in times like these to find someone who knows what they are doing and is a good conservative investor. You need to find someone to bounce stock ideas off of and someone who knows the stock market environment. One of these people might be Jim Cramer and you can get a free two week sign up for his newsletter that will give you all his stock picks before he actually makes the trades. Will he guarantee every stock he picks to be a winner. No he won't and can't because no one can see the future. But he may be able to give you an idea of what stocks to be looking at to start buying.

The stock market goes up big one day and down big the next and right now is a very volitile time in the market. At some point it will be a good time to get into the stock market and it might be very close right now. On thing is for sure. It is a great time to start looking at and analyzing different stocks and start trying to figure out which ones might be undervalued. If you are not in debt and have cash on the sidelines, this buying opportunity is what you have been waiting for. Take advantage of your cash position and learn how to buy stocks for beginners to get in some stocks at a low price so you can profit in the future.

WHAT STOCKS ARE SET TO EXPLODE?

Are you trying to find stocks that are ready to explode? The stock market is way down right now and anyone who can figure out which stocks to buy today may make a nice gain. History shows that buying stocks when they are at their lows is the real way to make money in the stock market.

How do you figure out which stocks are set to explode? One way is this free offer Get free stock alerts from Jim Cramer at TheStreet.com. You can gain full access to Jim Cramer's $3 MM Personal Portfolio — and you will be emailed before he makes a trade!

Managing money is hard especially for stock market beginners. But, Jim Cramer is so committed to helping people learn that he created a charitable trust portfolio to show investors how and why he makes trades. For over 10 years Jim Cramer was a successful hedge fund manager and now he writes for RealMoney.com. Over the years he has developed a strict set of investing disciplines that have helped all kinds of people be successful through any market.

If you want to know what stocks a real pro is going to buy before he does it, this offer is for you. You can get a 14 day free trial and now is the time to sign up to see how Jim Cramer is going to take advantage of this stock market panic to make money. This is where the real stock market professionals separate themselves from the stock market for beginners. This is where the real investors make their stock market fortunes at times where the stock market is tanking. You need to know what they are buying right now that will explode later for nice double digit gains.

DOES BUY AND HOLD WORK IN 2008?

Buy and hold used to be the way to go in the stock market. Buy a good solid stock, hold it for five, ten, even twenty years and you would show a profit. The stock market seemed to go up slowly but steadily. Don't gamble on stock's the gurus said, INVEST in them.

Does the buy and hold stock strategy work in 2008? In fact, has it worked at all in the last ten years or so? Stocks strategies for beginners is one of the most difficult things to get a grasp of. Buying a stock is easy, you just go online, click a few buttons, and you have bought your stock. When you should sell that stock, however, is always the hardest decision.

Stocks seem to fluctuate more now than they did years ago. With the advent of the Internet and day trading, so many dummies and beginners have come into the market who really aren't investors. They are traders trying to make a quick buck and it is almost like they think they are playing a video game. These stock day traders are in and out of stocks so fast it can make your head spin. They are in fact the opposite of the buy and hold investor.

In addition to the online day traders, there have been big events like 9/11, Enron, and other big companies going bankrupt and having shady dealings. These events all work to take down the stock market in days. They undo years of steady progress and in weeks take down the stock market to levels it was years ago.

Buying and holding used to be sound stock investment strategy. You could put your money away in a group of stocks and be reasonably confident you would get back more in many years time. There was no real need to keep up daily with the stock market news because you could feel confident over time your stocks would go up. Is this true today? I think not and this is why it is harder now for beginner stock investors to understand the market and get started investing. The stock market for dummies has gotten more difficult to negotiate the ups and downs.

SHORT SELLING STOCKS FOR DUMMIES

The SEC today (September 19, 2008),banned the short selling of stock of 799 financial companies through October 2. I think they will extend the band much longer than that perhaps until after the election in an effort to make sure the market is given the best chance of being stable.

What is stock market short selling? How do you short sell a stock? Shorting a stock is the opposite of buying the stock. When you decide to short a stock you do it because you think the stock price of that stock is going to go down. What happens is this: a stock market investor who sells a stock short borrows shares from a brokerage house in order to sell those shared to another investor. Proceeds from the sale go into the shorter's account but he must buy those shares back at some point in time and return them to the lender. When you buy the shares back it is called "covering".

Short selling stocks is not a strategy stock market for beginners should use. Only investors who know what they are doing should ever attempt this because you can theoretically lose more than when you just buy a stock. When you invest in a stock, the most you can lose is what you have invested and the stock would have to go to zero for that to happen. However, when you short selling a stock, the stock could go up and up and never stop. The more it goes up the more you lose so there is no limit to how much you could lose when you short a stock.

STOCK MARKET 2008 PANIC = TIME TO BUY?

9/29/08 Update: Another big panic today with the Dow closing down 777 for its biggest one day drop EVER! There is fear absolutely everywhere!

The stock market is at a two year low right now and there has been nothing but pain this year. Yesterday the US Dow Jones went down over 500 points which was it's biggest drop since 9/11 and it has transfered over to the International markets as well.

There is no doubt that this stock market panic is the real thing as company after company comes in with low earings or warnings about slowdowns and lower earnings to come. As I right this, the market has come back a little as it was down over 130 but is now up 50 points or so.

If you sell now in September 2008 you will be part of the panic and contributing to it. You will probably be getting the lowest price for your stock as many stocks are at a 52 week low. However, if you don't sell, things might get worse and you may lose more money. It seems selling could be wrong and holding could be wrong. Alas, these are difficult times for stock market beginners and veterans alike.

If you look at the 2008 Dow Jones stock market chart below, you will see that everytime there appears to be an upturn, it ends up heading back down to a lower point. Yesterday's drop was all out panic as people just wanted out. Some people have bigger balls than others and then some people may be smarter than others too. We will only know in the future when we get there.

Is it time to be buying right now in the midst of this panic? This is where the pro's seperate themselves from the stock market dummies and beginners. The pro's have a plan and they have lots of information as well. That doesn't mean that the professionals will be correct whatever they do, but it does mean that they have a better chance of understanding the market and the sentiment of investors.

For stock market dummies and the average stock market investor, it is extremely difficult to see and understand when the stock market might be approaching its low point. A panic in the stock market is often a good time to pick up a few stocks at an oversold low price and the professionals are good at that because they have the fundamentals in front of them and can more easily estimate a companies true worth. If in a stock market panic sell off a company gets oversold by frightened investors, the hedge fund managers and stock traders may be the ones buying the stock.

Again, there is no way to tell the future and today may have been the stock market low point or it may come sometime in the coming weeks or months. There is still panic in the air and another bad company story may be right around the corner to send the stock market lower. However, we do know that at some point there will be a turn around in the stock market. It may not reverse on a dime and head right back up, but it will turn around in some fashion. At some point we will have all wished we had started buying stocks rather than sitting on our hands and doing nothing. Is that time now? Is it time to start looking for stocks to buy rather than stocks to sell?