I dont know anything about stock.?

Question

Hi, i want to invest in the stock market, but i dont know how it works, i read up on it, but how do you receive the money if your stock does well? and how do you loose money? do i have to constantly keep paying for something? Thank you, any advice would be great.

Answer 1

If you buy 100 shares of XYZ at $10/share, and the price rises to $15/share, the value of your position is now worth $1500.  If you sell it then, you've made $500 profit (which is deposited in your account).  Same deal if the price drops to below $10/share.  If you sell it, you'll take a loss and money will be removed from your account.

Some stocks pay dividends (usually quarterly) which is another bit of extra money that may be deposited into your account.

Once you buy a stock, no, you don't have to "keep paying for something."   You pay a transaction fee when you buy, and then again when you sell, and that's it.

Answer 2

OK, so you want to start buying stocks in the shortest, easiest definition possible:

The first step:

First step is obviously picking the right stock. In order to do this, you will need to learn Fundemental Analysis. You can start here:

http://www.investopedia.com/university/f...

Fundemantal analysis is basically helps you find good companies that are currenty out-of-favor with the market. In other words, good companies that are currently undervalued and under priced. You are expecting that their financial statements are healthy enough to increase their current low price and make future earnings.

Step 2:

Work on your personal finance and determine how many shares you want to own. Determine your time frame. Are you in this for the long-term? Short term? 1-5 years is considered relatively short. Time frame is important because it will help you manage your portfolio better. Develope a strategy by slowly educating yourself on how to and when to enter, manage your share counts, portfolios and learn how to diversify.

Step 3:

Check out all the discount brokers on the internet. Tdameritrade.com, e-trade.com and many, many others. They offer different fees and different services, but all of which will allow you to pick-and-choose the stocks you want to buy.

There is a lot more to buying stocks, but I hope this helps gets you started. Email me if you need any help. Good luck!