How To Start Stock Market Investing
posted on: 2009-12-07 09:17:15 by Soo-Young
tags: guides

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Introduction
If you're new to the stock market, or are just interested in learning more about how to get started, you may be surprised at how easy the whole process is. This guide will show you step by step how to get started with your first trade.

Step 1: Assess Your Investing Goals And Expectations
The first step you should take to get started in the stock market is to assess your investing goals and expectations. This is an important step to take in the beginning and will help you build a framework for your overall investment strategy. To assess your investing goals, ask yourself why you are interested in stock market investing in the first place. Are you looking for a second income? An alternative to real estate? A hobby? Whichever way you answer this question will help you find the right information to tailor your strategy to suit your needs. Not everyone has the same objectives when it comes to the stock market, so it's important to clearly define your own needs early on and follow your own path.

The next part of this step is to assess your own expectations about stock market investing. Many new investors think that the stock market is an easy way to get rich overnight, and end up losing their shirt (and then some). It's important to realize that the Dow Jones Industrial Average, which provides a good overall picture of the stock market, has made an average of about 10% per year since its inception. You may hear stories from your family, friends, or coworkers how they were able to triple their money with one stock, but you have to remember that this should not be expected. It might happen, but it isn't a typical situation. Again, the Dow Jones Industrial Average has been churning out about a 10% gain per year. Sometimes, people get lucky and win big, but luck doesn't provide a solid foundation for a serious investing strategy.

Step 2: Save Money To Fund Your Investments
The next step is to save money to fund your investments. Because returns in the stock market are never guaranteed, it is important to pay off any high interest debt you may have under your name. This means paying off your credit cards, student loans, car loans, and any other outstanding loans you may have. If you're just dying to get started in the stock market, but don't want to pay off your loans, you can always trade with imaginary money in the meantime. Doing this requires patience, but will help you hit the ground running when you're free of high interest debt and able to invest with money you can afford to lose.

Step 3: Find A Stock Broker
The last step is to find a stock broker. A stock broker is simply a person, bank, or financial service provider that you buy and sell stock through. The definition of a stock broker is simple, but finding one can be more complicated. There are a plethora of stock brokers that cater to different types of investors, which makes it important to assess your investing goals before you actually start investing. If you have clearly defined investing goals, you can more easily find the right stock broker for your own investing needs. Because stock brokers vary in their price, customer service, trade execution, research tools, and charting software, it is important to find the stock broker that has the right features for you. If you go with a stock broker that provides features you won't use, you'll still be paying for them with each commission and fee you pay.

Conclusion
Completing the three steps outlined above are all that is required to get started in the stock market, but there is so much to learn about how to be a successful investor. It is vitally important to further educate yourself as much as possible to help you make consistent returns in the stock market year after year.