Rookie buying stock?

Question

How does the average person go about

investing in stocks, and what stocks are

now the best to buy.

Answer 1

1) Get a discount brokerage account

2)  Deposit money

3)  Buy stocks or mutual funds with low management expense ratios (MER) such as Vanguard funds

4)  Best stocks to buy?  hahaha!  Wouldn't we all like to know! :-)  

Historically companies that pay a dividend have had good long term returns (i.e., Johnson & Johnson JNJ etc.)  If you're a young person in his/her twenties, you may be encouraged to try growth stocks--rather than that I'd recommend a growth index fund like VIGRX so you hit a broad spectrum of growth companies rather than picking one or two that may be losers.

Before you start investing, make sure you have your 6 months emergency cash tucked away in a high interest savings account, all your credit cards paid off, as well as any depreciating assets like cars/boats etc.  You may only get a return in today's stock market of 4-6% where as if you pay off a credit card charging 20% interest, you get an instant 20% return--think about that!

Answer 2

I would like for you to not buy mutual funds unless it inside an IRA or another account tax is not subject to taxation.   It is an accounting nightmare to hold a mutual fund in a taxable account.  Buy and hold is really not possible like 35 years ago.  The discount broker suggested by one of the responders is good advice.  I would buy a medical stock such as Baxter, Becton Dickson, or Abbott Labs.  FD:  I own Abbott and it is a good solid stock and I think the other two will perform well.  The other stock could be a defense stock such as Lockheed Martin, Boeing, or General Dynamics.  I would probably go with Lockheed because the military is going to have to be armed no matter how the elections go.  A diversifed pharma stock as mentioned above will be beneficaries of an expanded government role in medical care regardless of the outcome of the elections.   I would look at ETF or exchange traded funds if you do not want to spend the time to keep up with your stocks.   Most of important:  I would AVOID FINANCIAL stocks no matter how tempting the "bargain" price may be reported by the business press.  Finanacials from banks, brokerages, and mortgage companies are just too dangerous.  If Bear Stearns could go under as it did in March of this year, then anything is possible with that group.   Others may advise to the contrary but it would take a gutsy and sophisticated investor to trade financial stocks.  On this point, I am certain.  

Answer 3

It depends how much money you have available to trade. The more money you have to invest, the more you will make in profit. Lately, I have been trading with American Eagle. I bought 1100 shares of American Eagle on 19th August 2008 at a price of $13.60 each share and I sold all of them the next day for a share value of $15.52. So in one day, I made a profit of around $2100 by buying and selling this stock. As for now, I am waiting for the settlement date of Wednesday before I could do the same thing again, but this time with a different company. This also takes some luck because when I bought it at the price of $13.60, it was the lowest for that day and my selling price was very near the highest value for the selling day. One thing I will recommend you is that you do your research on how the company is doing before you by their stocks because if they are going through a hardship, their stocks will go down and so will your money. Anyways, good luck to you and if you have any questions regarding the stock market, you can email me and I will see if I can help you out.