Stock Market 101: Where To Start?

The stock market is not a simple math equation. Even seasoned players have lost big by taking the same gambles that originally made them successful investors. New to the stock market? Don't enter the murky waters of Wall Street without these tips.

Choose a Dependable Broker

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Brokers play an essential role in the stock market. You give these firms your cash deposit and in turn, they offer you the tools that allow you to buy and sell stocks on the market. There are several stock brokers to choose from. The differences between services generally boils down to transaction fees as each company charges a specific amount per trade. What's most important is going with a broker that has a track record for providing a reliable service.  

Start Small

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Go with the KISS Principle So you've set aside a budget that will be used exclusively for your investment endeavors. That's all fine and dandy, but how much are you willing to invest per trade? Whatever it is, hopefully it's something small. It would be a shame to blow the whole budget on a single bad trade. Starting small gives you an opportunity to understand the dynamics of trading stocks, essentially are allowing you to get some experience under your belt without putting your entire budget at risk.

The KISS principle tells us that any given system is at its most efficient when you "keep it simple stupid." This old school concept is one beginner investors should live by. The stock market offers a variety of ways to invest and make money. With that said, newcomers are best suited for the basic actions of buying and selling. Most brokers give you the ability to buy shares of specific companies and sell those shares later down the road. There is much more to learn, but many new investors have done  well taking the simple route.

Once you've mastered the basics, you'll be more comfortable with option trades, short-term trades, penny stocks and other advanced strategies. If you simply can't wait, check out the Peter Briger executive profile to learn how you can get expert help.

Monitor Stock Trends

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Rookie investors can learn a lot by monitoring trends in and around the stock market. For example, if you know that the share value of company A has been consistently dropping over its 52-week range, that is probably a sign that you should stay away. On the other hand, if you know that company B has released a hot selling product or recently announced huge quarterly revenue gains, their stock may be a worthy investment. Trend watching will call for some dedicated research on your part, but this is hard work that can pay off big in the end.

Seasoned investors will tell you that the stock market doesn't make any promises. There are no guarantees regardless of how much money you invest. If there is one silver lining, it would lay in the more you know the less likely you are to make critical mistakes.