Ways to Invest in the Stock Market

Like most transactions, there can be more than one way to purchase stock in a company. Most people hire stockbrokers to do this for them. Web sites such as Scottrade, E*trade and Ameritrade provide online investment services. To keep track of increases and decreases in the price of stocks, you can go to Web sites like Yahoo Finance or simply look in the newspaper, such as the Wall Street Journal.

There are quite a few options to use when trying to pick the best stock to invest in. First, you can select a few stocks on your own and then look over their progress from the last few years.

Have their stock prices gone up? How much do they earn per stock? Are the companies declaring any dividends to the investors? What do the future dividends and returns look like for the stock?

Having some knowledge in accounting might help this process, but it is not necessary. If, though, you do not want to risk your success on your own opinion and research, then you may want to talk with a financial consultant, who can help you.

Do you want to play the market or pick a stock and stick with it? Some risk takers will attempt to predict the market. If the prices continue to rise, they might choose to sell the stocks and invest in other securities with the earnings instead of staying put.

Also, if a price significantly drops, they may pick that time to invest in hopes that the prices will climb back to their past heights, if not higher.

Generally, the more you risk, the more you can gain. Those who make the most on average in the stock market are those who attempt to predict and make money by buying and selling at key points.

Money can also be made through dividends and just by waiting it out and having faith in your investments.

The simplest way to get into the stockmarket might be to hire a stockbroker, and let him or her handle the accounts and make the money for you.

You will be charged a set fee, but he or she will be required to earn you a return on your money. Stockbrokers have more and more money to work with to earn returns as well.

These are a few of the investing basics — where to go, how to buy, who to talk to and what can be gained from this. The stock market is a crucial part of our economy and a somewhat risky way to make money if you don’t understand how it works.

This article was originally published in the Etownian on Thursday, November 15th, 2007.