Step 1 - Sign up with a Stock Broker

We recommend using a reputable online broker. They are easy to use and available anywhere you have an Internet connection. When choosing an online broker you'll want to consider the trading fees, tools offered, and quality of their service.
See our online brokerage recommendations.
Article on great online brokers.

The best way to get comfortable buying and selling stocks is through paper trading or using a stock simulator. This provides you with a great way to experience trading without risking any money.
Here are some links to stock simulators.

The toughest part of investing is picking what to invest in. Picking a great stock can be as simple as finding a strong company with a lot of potential that isn’t overpriced. To find a stock like this, start with an industry that you know a lot about. Pick a stock within the industry that is doing very well financially and has a lot of growth potential. Finally you need to make sure the stock isn’t overpriced. By this we don’t mean the actual price but the relative price according to the PE ratio and PEG ratio (Read more about the PE Ratio and PEG Ratio). This stock picking method is similar to the value investment style made popular by Warren Buffet and Benjamin Graham.

It's also helpful to seek stock advice from a source like Market Flavor! There are also some good investing shows on CNBC such as Fast Money and Jim Cramer’s Mad Money. Online you can also find discussion boards that can provide assistance with picking stocks. Make sure you don’t buy overpriced stocks by always checking the PE ratio! Personally we prefer stocks with a PE ratio below 25.

Risk tolerance should also be considered when deciding what to invest in and how much of your portfolio to invest in stocks. Read our articles on asset allocation.

Tags:   Buying Stock   Learn How to Invest   Online Stock Broker   PE Ratio   PEG ratio  

Posted on October 4, 2007 1:30 PM | Digg | del.icio.us