Buying stock?

Question

i would like to start investing in stocks. I am looking to invest around 100-200 dollars to get a hang of it . Can I do it. Anywhere I can find a step by step guide to start with or a book.

Answer 1

visit various investment websites to learn more about investing! read read read read read and read some more! don't jump in if you can't swim.  learn the essentials before starting and be prepared for anything.  use yahoo! finance, or msn money central, or any other financial website to read about stocks and investing.  while 100-200 is not much to start investing with, learn your option and talk to numerous sources to determine your best course of action.  for beginners, sharebuilder.com is a great start.  i recommend also going to talk to a financial advisor, or look for one online.   Or go to a brokerage (Edward Jones, Schwab, Merill Lynch, etc.) and ask questions... they might get annoyed, but it'll only improve YOU, so be relentless!  Take risks, when you can, and empower yourself with knowledge.  Also, check out www.fool.com, or just google "How to Invest" or "Investing for Beginners." Lastly, visit your local library and look for books about investing!

Answer 2

If you are interested in the stock market and investing, the best investment that you can make right now with such a small amount of working capital is to invest in your own education. The best and least expensive way to do this is by reading and doing research.

Do not, and I emphatically repeat DO NOT open an account with Sharebuilder.

While it is true that they offer $4.00 per trade, this is based on trading by cost averaging, meaning that you are buying partial shares of a company, based on how much money you would like to invest in the company. To make a real time trade and purchase whole shares of a company they will charge you $10.00 per trade no matter how many shares you buy. There are many other brokerage firms that charge far less.

To start, you need to learn about fundamental analysis, which is looking at the major markets to find out which market is performing the best.

Then you need to find out which sectors in that market are performing the best.

Then you need to find out what industries in that sector are doing the best.

Finally, find out which companys in the industry are out performing all other companys in that industry. This is called doing a top down analysis, (e.g. working your way from the top down to the bottom).

You will also need to do some studying on technical analysis. Which is looking at companys you are interested in and finding out how well they have been performing over the past one to five years.

When doing a technical analysis, some key points that you will want to consider is,

a) The companys price/earnings ratio, does the company make enough of a profit to justify the price of their stock?

b) The companys debt/equity ratio, does the company make enough money to cover their debt, in other words do they make more money than they owe?

c) Does the company offer dividends on their stock?

d) Is the companys stock optionable, meaning can you buy and sell option on their stock?

Learning what options are and how to trade them will be another important aspect to your education because they can offer greater profits over a shorter amount of time than using a buy and hold strategy.

Also learn about trading ETFs (Exchange Traded Funds) which will help you to diversify your portfiolio when you open a brokerage account. ETFs are similar to Mutual Funds but can be traded just like stocks.

Start watching Fast Money on CNBC. This is a very good program which will give you some insight on what is currently happening in todays markets.

I hope this information has been some help to you. Good Luck and happy investing.