First time getting into stocks. where should I buy my first stock and for how much?

Question

I wanna buy my first stock, I been trying to read a lot of books and ask questions online and just want advice from people who usually buy stocks. whats the process you go thru before buying it. like what steps do you take and what do you look for. also, where should I buy my stocks at since im new to everything.

Answer 1

you have to open an account w/a broker.  eithe a full-service broker or an online discount-type broker, or someone in-between like a CharlesSchwab or TDWaterhouse.

The more service you get (which it sounds like you need advice), the more you'll get charged.   W/online brokers, you'll get almost no advice from human brokers (although you can if you find out who is assigned your account and pester them enough), but you might have some software tools made available to you, especially through premium subscription type of deal.

if i were you, i would open an account w/a discount broker, and buy an s&P 500 index fund, which is a mutual fund, from t Rowe Price, or a MF company that charges the lowest managemetn fees.  Make sure to ask lots of questions about hidden or deferred fees!  

when you ask how much to pay for a stock, you have to realize that the amount you pay in dollar terms is totally arbitrary.  whether a stock is $5, $50, or $5,000 makes zero difference, but what DOES make a difference is the price of the stock relative to its earnings per share or other measures such as its book value per share.  

if you're  a value investor, you'll look for stocks trading at low multiples of earnings (liek say, less than 15 time earnings per share).  if you're an aggressive growth investors, you'll look for high multples.

again, you need to diversify, to reduce your risk, so you should invest in plain old, boring mutual funds.   what if you buy one stock and the compnay goes bankrupt?  w/ amutual fund, you diversify away that type of systematic (i.e. market) risk.

Answer 2

Learn;

Asset Allocation

Position Sizing

Your time horiozon

Do not buy a stock because;

Someone on TV said it's going up.

Same with any other media.

Tips from freinds or strangers.

Never;

Buy a stock without an exit plan.

Answer 3

Figure out how much you want to spend.  Open an online account and do research on the stocks in your price range.  Quaility is better than quanity when it comes to a long term investment.  I would recomend to buy stocks in lots (100 shares) at a time.  So if you have 300.00 dollars to spend try picking a stock that is forcasted to go up.  and this would put your price range around $3.00 a share.  If you have more money to invest buy multiple stocks in Lots so you are not putting all your eggs in one basket.  I would also recommend playing on paper first. follow it for a few weeks or months to see how you did and to educate yourself.  When you first start out remember that going in blind your going to look at it like going to the poker table with out knowing how to play your first time out might cost you what I call education money.  Or you might get beginners luck.  If this all seems overwhelming get a broker.  Happy Trading.

Answer 4

Jackie, i always suggest mutual funds to beginners as opposed to single stocks, mutuals are actually made up of several stocks, hence your risk will be low. I recommend an online brokerage firm that has good beginner qualitys {like tutorials or an easy to understand set up}, i use zecco, better then schwab, etrade, etc. they are the only ones with free stock trades, no minumums..all the others will charge you fees for trading, but compare and see for yourself. Good luck and happy investing!

http://friends.zecco.com/r/a7a2877caab81...