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.

Stock Market Investing

The stock market can either be the most lucrative investment of your lifetime or drain your worth, depending on how you “play the game.” While numerous multimillionaires or multibillionaires have earned their fortunes investing in small firms that eventually blossomed into hugely successful corporations, placing “all of your eggs in one basket,” or investing your entire worth into one venture, is very risky. Only a very minute percentage of startup firms ever reach the financial success of the Microsofts or the Yahoos. The safest game plan for the investment market is to choose a select group of attractive and feasible investments. However, if it is a windfall of fortune you desire, you will need to remember that greater reward generally corresponds with greater risk.

All corporations offer stock, although some prefer to keep their interests closely held or private, meaning that stock can only be purchased by the managers of the organization. However, many corporations are publicly-held, which means that outside interests can purchase shares and thus purchase a stake in ownership. Public corporations sell two distinct classes of stock shares: common and preferred. Common shares are attached to the privilege to vote for the company’s board of directors; however, companies may experience times of financial difficulty in which they find it impossible to pay their common shareholders dividends, or portions of the company’s earnings disbursed to shareholders. The purchase of preferred stock guarantees that you will be paid your declared dividend before common shareholders.

Individual stocks are traded on stock exchanges, whose price listings can be found in special sections of most major newspapers or online at investment Web sites. Examples of renowned American stock exchanges include NASDAQ (marketing & major tech. firm’s stocks) the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX). Transactions on the stock exchange are conducted through brokers, the most prominent of whom actually conduct business on the floor of the stock exchange houses. Investors interact with the brokers directly via telephone or indirectly via Internet investment sites such as Charles Schwab, Scottrade and E*TRADE.

Regardless of your method of investing, the stock market still offers the greatest potential for financial gain of all investment opportunities. However, it is crucial to bear in mind that great financial rewards rarely come without great financial risks.

This article was originally published in the Etownian on Thursday, November 1st, 2007.