Wall Street Investing and Finance for Beginners

Step by Step Guide to Invest in the Stock Market and Get Passive Income

George Pain

• Publisher: Abhishek Kumar
• eBook ISBN: 9781544883687
• Topic: Personal Development
• Subtopic: Personal Finance

Are you looking to invest money in the stock market but not sure of how to get started?
Then read below. The stock markets are a collection of markets and exchange, where issuing and trading of equities of public listed companies, bonds, other securities through formal exchanges or over the counter markets. It involves buying and selling shares and securities to generate capital. The stock exchange market is what made Warren Buffet super rich. If you are able to monitor the situation of the securities and their patterns with time, you can truly make a fortune that can last you several lifetimes. This book aims at showing you how to take advantage of the stock exchange market and mint millions from the few thousand dollars stuffed under your mattress or that you have saved in the bank. The stock market was once thought to be a thing for the elite class but things have changed now. The stock exchange market is a great business opportunity for every citizen of planet earth. The reason for companies trading their stocks is to generate enough capital to facilitate their business operations to a whole new level expanding their market reach and increasing profit income. As a prospective investor, you have to buy floating shares or stocks at a lower rate and hold onto them until the stocks experience a boom and their prices go up. At this point, you can sell your shares at a higher rate than you bought them making a considerable amount of profit. Some of the best investors in the stock market make millions of dollars from one trade! This book aims at making you wealthy and rich by trading in the stock market. Here's What Is Included:

Basics of Stock InvestingPicking Winners and Losers in the MarketDividend InvestingValue InvestingLong Term TradingShort Term TradingDifferent Trading TechniquesHow to Get Started?

GETTING STARTED

Before investing in the stock market, you should know what you want and why you want it. This requires gathering substantial information to help you in deciding.

To succeed in the stock market, you need the following:

1) Understanding the reason why you want to invest - Are you buying stocks for appreciation (capital gains) or income (dividends)?

2) A good understanding of economics and economic factors that affect stock values.

3) A good knowledge of the company you are considering investing in - For instance, is the company profitable? A thorough background company research is in order.

4) Choosing the right industry to invest in. Some small companies in a fast moving industry bring good returns.

5) Identifying trends and megatrends. Know how to study market indicators for a period of time and identify the patterns and trends.

6) Understanding of how events around the world affect the industry, the company and subsequently the stock itself.

7) Defining your investment strategy - Higher risk, but higher reward? Or you want to play it safer?

After learning some basics on the stock exchange market, it is time to start making money. Well, in this chapter, you will learn the right time to buy and sell stocks.

Getting into stocks is not a difficult process. You simply need to choose the broker that you want to use and pick the right stocks and get started. You can easily transfer money and as long as you make some good decisions and don’t jump ship all of the time (remember those broker fees for trades as well), you will see success and make some great money! You can follow the following steps as a novice.

Open a Brokerage Account and choosing a broker

The first thing that you will need to do in order to purchase stocks is to open up your account. You will need to find a discount broker and then sign up online to have stocks. Take a look at the different fees that the broker is going to charge.

A broker is a licensed professional who agrees to keep your money in an account and invest it according to your wishes, for a fee.

Some will have a lot higher fees compared to others and you could be losing money if you don’t do your research. On the other hand, these expensive brokers may have value added services you won’t find on lower tier brokerage firms. There are two types of brokers:

Full-Service Brokers - Full-service brokerage firms tout services that the discount brokers don’t offer. The most common of these is extensive investment advice and financial forecasting using teams of analysts and economic experts.

Discount Brokers - Discount brokers manage your funds but don’t provide advice. They work at a lower overhead than full-service brokers, so they charge far less.

Choosing a discount broker will depend on whether you want to do business with an office in your location, or conduct your trades online. Although their fees are generally reasonable, be sure to inquire closely about what exactly you’ll be paying for, how much, and how often.

A couple of good brokerage accounts that I have used before are Charles Schwab and E-Trade.

Trading Simulators on the Web

Trading simulator websites are an excellent way to get a feel for how the stock market works and how stock values can change. They allow you to create your own investment account with the stock picks of your choice. Most of them are free to join. The simulator delivers a daily report for each stock and an aggregated report for your portfolio, so you can see how your simulated investment is doing. Google Finance is a great trade simulator.

Fund Your Account

Now that the account is set up, you will need to put some money into the account.

This is pretty easy to do as you just choose the right amount you want to use and either send in a check or transfer right from your bank account. The check will take a bit longer but most brokers will be fine in using it.

Select Your Stocks

Once you have your money in the account, it is time to figure out which stocks you would like to procure. If you are doing this with a financial advisor, they will be able to look at your goals and help you find the right stocks to make money with. They can pick out a few options, watch the trends for you, and help you make some important decisions to get the best profit. If you are doing it on your own, you will need to be proactive and watch the different stocks to make sure you are picking the right ones to make a profit.

Understanding Transaction Costs

A key term or set of terms to understand before you call or click on your brokerage account is bid-ask spread. This affects the price at which you will be able to buy shares of a stock you want to add to your portfolio and therefore your portfolio's total return on your investment:

1) Bid - The highest price that you, the buyer, are willing to pay for a share.

2) Ask - The lowest price at which the seller is willing to sell you that share.

3) Bid-Ask Spread -The difference between the bid and the ask.

The spread can vary, depending on how often a share is traded. Currency assets and large-company stocks change hands on a daily basis, so their spread is very low; while stocks with fewer shares or a lower trading volume may have a higher spread.

The recipient of the spread amount is the market maker, sometimes called a specialist, who pockets the difference between the bid and the ask as profit. The market maker plays a vital role in the marketplace by keeping stocks liquid at all times, ready to be bought and sold. Generally, the higher the demand for a stock, the lower the spread, since more market makers are needed to handle the demand, so competition increases among them.

Remember that the bid-ask spread is separate from your broker's commissions and fees, which are another cost. Added up together, they represent your total transaction costs for your stock purchase. You need to be aware of these costs and make sure they stay at a level you can accept, but they're a fact of life and a cost of doing business in the market. When you purchase a stock at the ask price, its value in your portfolio is actually the bid price, since the difference goes to the maker.

Before you start wringing your hands in despair over losing money right away, remember that the spread is only a loss if you plan to turn around and sell your shares right away. Since the whole point of buying a stock is to hold it long enough to make money through capital app...

Table of contents

• STOCK MARKET INVESTMENT FOR BEGINNERS
• BOOK DESCRIPTION
• ABOUT THE AUTHOR
• DISCLAIMER
• INTRODUCTION
• WHAT IS A STOCK MARKET?
• THE STOCK MARKET DO’S AND DON’TS
• STOCK INVESTMENT SECTORS
• MARKET CAPITALIZATION
• STOCK ANALYSIS
• GETTING STARTED
• FREQUENTLY ASKED QUESTIONS
• CONCLUSION