If you are a beginner just getting interested in the stock market, you need a good place to go to get quality information all in one spot. And preferably it should be free!
That is what you have with Morningstar.com which is a website where you can sign up for free and get just about all the news stories and stock information you would ever need as a beginner. They also have a premium account for about $15 a month which has a lot of added features but there is no real need for that if you are someone who is just starting out.
The Morningstar company has been around since 1984 and it is one of the all purpose investments firms on the Internet that provides a wide array of services. They are well known for their stock analysis (which you only get with the Premium account), but with the free account you get all sorts of useful things that will help you get on your feet and on your way to understanding the market.
All Your Financial News In One Place!
Morningstar is great for the stock news they put out and that is why signing up for free seems to be a no-brainer. Rather than scouring the Net everyday for your stock and business news, now you can get it all in one place. My favorite is the section they have every week which takes you directly to their most popular articles which sometimes includes videos.
If you are saving for retirement (you should be!) then Morningstar has frequent news and reports on how to better do that. Saving and growing your money in today's world is big challenge and harder than ever with interest rates so low. Having access to reliable and trustworthy news from Morningstar is great to have and most of that information is available with the free account.
Other Morninstar Features
Are you interested in tracking some of your favorite stocks? You can do that for free by creating your own portfolio and that gives you access to all the latest news for each of those stocks.
Are you a social person who wants to talk and read about what other members are saying? They have a large, active forum that comes with the fee membership where you can connect with other like minded investors.
Do you want to know what the Morningstar analysts are saying about your stocks or industries? There is an absolute ton of analysis available on the site but most of it comes with the Premium membership.
Is Morningstar Good For Beginners?
Yes it is because with all the dubious websites on the Internet today, you can rest assured that Morningstar is a reputable one. It is a great site for beginners who want to begin learning how to buy stocks. The news and information you get there will help you understand what is going on in the market and be your daily learning center. Even if you never pay mre for a Premium account, the easy access to all sorts of business and stock news will help you reduce that learning curve.
Of course Morningstar is also great for established investors as well who want stock analysis from one of the leading online investment websites.
WHERE TO GET GOOD STOCK MARKET INFORMATION
DON'T GET YOUR STOCK PICKS FROM TEXTS!
It might seem obvious that good stock picks probably won't be found in spam. But I guess everyone wants to get in on the ground floor of a good deal and that is why this type of thing works.
Have you ever met someone who doesn't want a good stock pick? Stocks are almost like the weather: they are something people can discuss at cocktail parties, outdoor get togethers, or just about anywhere. It is a subject that is good conversation and it often is combined with people discussing the economy and how the country is doing.
A good stock pick is always welcome. It is sort of like an inside tip at the horse races and who wouldn't want that? Yes, there will always be a demand for that one stock that will be different from all the rest and turn out to be your next big winner.
That is the mentality that stock picking text spammers count on when they send a message that they have the next hot stock. There is always an urgency because this tip isn't going to last long! There service is the best (they will say) and the one stock they have for you will be going up guaranteed. Don't miss it by waiting!
Spammers have been around forever in all sorts of forms and now they have clearly moved to the texting platform. If the saying "there is a sucker born every minute" is true, don't let it be you when it comes to stock picks.
Listening to professional analysts is one thing and that always carries with it some risk. But getting taken by an anonymous text about a soon to be hot stock is clearly something even the greenest beginner shouldn't let happen.
STOCK MARKET: LOW VOLUME = HIGH VOLATILITY
Is it a good time to buy stocks when the market shows low volume like we will see this week during Thanksgiving? A lot of people are busy with family events and others are out shopping which means little time will be devoted to thinking about stocks and planning their investments.
It is during low volume weeks like these that we often see a lot higher volatility. When fewer people are buying and selling during these slow days, the stock trades that do occur move the market up and down a lot more than they do during normal volume trading days. Low volume = increased volatility.
Day traders love the market to be volatile because they make their money quickly when the market moves one way or another. When the market is moving sideways, it is harder for them to pick a direction.
On Monday we have already seen the stock market go down over 300 points before making a little bit of a comeback towards the end of the day. More worries from Europe and an impasse from the 12 member Congress Super Committee debating the U.S. debt ceiling was responsible today for the down day. But because of the low trading volume, it was probably a worse day for the Dow than it would have been had it not been a big holiday week.
Buying stocks when volume is low means you have to be prepared to see the market go up or down more than it might during other weeks. If you are an investor buying stocks for the long haul, it probably won't matter if you pay a bit more or a bit less (depending on whether your stock goes up or down) for your stocks. Just be warned that the prices of the stock(s) you are interested in might be moving more than usual just because of the low volume.
BEST STOCK BROKER COMMERCIALS
Online stock brokers usually have pretty dull commercials but there is one company that has chosen to make their pitch a bit more interesting - E*Trade.
I don't have any statistics to be able to tell you how well these ads work but E*Trade has gone exclusively with these baby commercials since their debut during the 2008 Super Bowl. To me that surely means they must be working and I'll tell you why I think they do:
1) First of, all they are lighthearted, funny, and cute. You can't go wrong with that.
2) They make saving and investing look fun as the E*Trade baby is always upbeat and totally into his portfolio.
3) These commercials take the fear out of investing. If that baby can do it then so can you.
4) That baby and his friends are cool, hip, or whatever current day term you want to use. That makes the commercials cool and also makes E*Trade cool.
In reality, investing is a boring subject but these advertisements make it sound fun. Fast Company writes that in response to that first Super Bowl ad, E*Trade had more sign ups the next day than in any day prior in their history. These TV spots are memorable and that is good for the brand as long as people remember what the ads are selling.
E*Trade was one of the pioneers of online stock trading and they also have the most recognizable commercials on television. They also have a great trading platform which I use. Here is a video showing many of the E*Trade baby commercials that have become so popular.
OCCUPY WALL STREET IS NOT ABOUT STOCKS
Have you heard of the new social movement called Occupy Wall Street? Protests are spreading around the country and slowly making their way to many of the major cities. This movement is being fueled online through many of the social websites like Twitter and you probably will be hearing more and more about it in the news in the coming weeks.
You might be wondering what Occupy Wall Street is all about and what does it have to do with the stock market? Actually, it has little to do with stocks as it is a growing group of people who are disenfranchised, often out of work and in debt, and angry because they think corporate America is making millionaires of the few and leaving everyone else behind.
"Wall Street" is the business district of New York and for anyone who buys and sells stocks it also represents the stock market. While these protestors are angry at high corporate profits and injustices they think abound in the business world, their protests involve much more than the stock market. Like most protests, the majority of people marching are under 30 years old.
The Internet and sites like Facebook, Twitter, and others are becoming important ways people organize and we all saw how they played a big part in the protests in Egypt which were responsible for ousting Hosni Mubarak. Occupy Wall Street will probably fizzle out eventually but it shows how the bad economy, high education prices, low wages, corporate bailouts, corrupt politicians, and other perceived problems with today's society are affecting the minds of today's younger generations.
They are angry it is clear, but they aren't angry specifically at the stock market like the name might imply.
PROOF THAT INVESTING IN STOCKS IS IMPORTANT
There is a news article out today that is in all the major news services detailing how the wealth gap between whites and minorities has widened in the last 25 years. I think this story is very misleading because it is all about race when the real story should be about EDUCATION: people who have access to education are doing better than those who don't. This graphic should have groups split into "education" and not "race":
ANOTHER DOT COM BUBBLE COMING OUR WAY?
The Dow and Nasdaq are two indexes that track the progress of the stock market and they are the two that are most often quoted. When you watch the business news every night, read the newspaper in the morning, or watch any business show on television during the day, those two averages are the ones that you will see prominently displayed.
The Dow Jone Industrial Average is comprised of 30 stocks that are thought to be a representative sample of the market in general. It is an average of those 30 stocks which are all large established United States companies. In other words, if the Dow goes down on any one day, chances are that the stocks you own will also have gone down. I have included a graph of the DJIA since about 1983 below:
The Nasdaq Composite is a different index that includes companies from all over the world. The NASDAQ is an average of all the stocks in the index and they are often more growth oriented than the stocks on the Dow. The NASDAQ has many more technology companies, Internet companies, and companies that are in new industries than the Dow does which is why it's graph looks somewhat different over the same time period:
The biggest difference between these two historical graphs of the Dow and NASDAQ is seen between the years of 1999 and 2002. That was the time period known as the Dot Com Bubble when all the enthusiasm for Internet companies quickly changed from euphoria to pessimism and people were rushing to sell their Internet stocks.
The NASDAQ had climbed to over 5000 and you can see that it was going straight up at one point, a trajectory that spelled doom because of too much enthusiastic buying. When things crashed, they REALLY crashed for all the Internet companies and since the NASDAQ had a much higher percentage of such businesses, you can see the big difference between the two charts. While the Dow did go down, it didn't go down nearly as much because it had many more companies that were in "traditional" industries.
If you take out the 1999 to 2002 period, the charts of the two indexes look a lot alike but technology stocks seem to be getting hot again. There is a lot of enthusiasm for Internet companies right now and stocks that come to mind are Netflix and Apple as well as all the IPO talk from Groupon, LinkedIn, and Facebook. Heck, they are even talking about doing an IPO for the company that makes Angry Birds (Rovio Mobile)!
The NASDAQ has climbed back up to reach it's highest point since the Dot Com Bubble and you have to wonder whether people are valuing these Internet companies too highly. Things change quickly on the Internet and while these companies may be doing well now, it hardly guarantees the kind of success people are hoping for in the future.
ARE INDIVIDUAL STOCKS INVESTORS "DUMB MONEY"?
A writer in The Wall Street Journal yesterday called the money individual investors put in the stock market "dumb money". You can read the article here.
STOCK INVESTING IN 2010 - GREEN LIGHT AHEAD?
This is the last post of 2009 for this stock market for dummies blog and we have seen a very good year for anyone who bought stock this year. After a horrendous 2008, the market bounced back to settle in at over 10,000 once again. Will there be more good things to come next year?
As the job situation and economy is really not much better than it was a year ago, one has to wonder whether stocks have gotten ahead of themselves a bit. When and if people start to realize they are paying higher taxes, the unemployment rate is still around 10%, and the prospects for a quick turn around under Obama isn't happening, it seems the stock market may slow down and even turn back around.
Having gone up so much in 2009, it might be a good thing to become a cautious investor in 2010 just to be safe. The stock market moves on perception and if the public perception of our economy turns real negative again, the stock market will head right back down. Obama healthcare and all the other taxpayers money he has used for bailouts and pet projects cannot be making the situation any better.
The Christmas sales numbers aren't out yet but I have a feeling they will be average at best. Will be see another rash of companies declaring bankruptcy after those numbers come out like we have seen in years past? Christmas is such a big percentage of the retailer's year that a bad Christmas is enough to send many of them into bankurptcy in this economy.
The stock market gave a lot back last year of what it took the last two years but that doesn't mean the same will happen in 2010. You have to be smart with your money and not have too much of it in any one place. Those that have all their money in stocks are gambling to an extent and for them it truly is the stock market for dummies.
WHERE DO YOU GET A FREE REAL TIME DESKTOP STOCK TICKER?
All the business TV's shows have a stock ticker but it is always 20 minutes delayed. If you go online to MSN, AOL, or any other popular service the stock quotes and stock ticker are also delayed. Even if you sign up and open an account with a major broker, the quotes you get online are 20 minutes delayed.
Where do you find a downloadable application that will put a real time free desktop stock ticker on your computer? Stock tickers are very cool looking and to have one on your computer desktop would be very handy, especially now with the stock market being so volitile. There can be 100 to 200 point swings in just minutes and stocks go up and down like yo-yo's. Being able to get real time quotes is very important right now and without them you feel more and more like a stock market dummy than ever before.
With all the major brockerage account services you have to sign up, deposit money, and then make a special request to get real time quotes. It is a pain to have to do all that but real time quotes are a necessity in panic market. Having a free real time stock ticker on your desktop would make things a whole lot easier. In order for it to work you would have to, of course, be constantly connected to the Internet but most computers are now days.
If you look online for a free real time desktop stock ticker all you can find is something like the picture below. Not only is that not real time but it is not really a ticker. I am talking about a stock ticker like you see on TV that goes across the screen in real time. This kind of ticker is always up to date and gives you stock quotes that are accurate to the second. There is almost anything imaginable on the Internet and I find it hard to believe that one can't find such a free stock ticker for thier desktop. If you know where to find one, please leave a comment and let us know where it can be found.
HOW TO BUY STOCKS FOR BEGINNERS AND DUMMIES
Get Started Buying Stocks By Opening A Broker 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).
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.
