How Stocks and the Stock Market Work" For a new investor, the stock market can feel a lot like legalized gambling. "Ladies and gentlemen, place your bets! Randomly choose a stock based on gut instinct and water cooler chatter! If the price of your stock goes up -- and who knows why? -- you win! If it drops, you lose! " Isn't that why so many people got rich during the dot-com boom -- and why so many people lost their shirts (not to mention their retirement savings) in the recent recession?
Not exactly. The stock market can be intimidating, but a little information can help ease your fears. Why would a company want to share its assets and earnings with the general public? The disadvantage of borrowing money is that the company has to pay back the loan with interest. Perhaps the best way to explain how stocks and the stock market work is to use an example. How to start a dividend portfolio with $5,000 « Intelligent Speculator. Anytime we talk about stock picks or building a portfolio, one of the most asked questions on this blog is how to start building the portfolio itself.
It’s easier said than done of course and lends easily to procrastination. Of course, this is what makes the biggest difference in the end. Making the right picks and trades is important but getting started, to actually build the portfolio is the real critical part. That being said, we decided to write a general guide. If you follow these steps, you should be able to take that initial amount ($5000 in this case) and multiply it many times over to build yourself a solid dividend portfolio that can help you achieve your ideal lifestyle through passive income.
It’s not a piece of cake but it’s not rocket science either. It’s just discipline and hard work. We used the example of starting with $5000 but this can be applied to any amount really. . #1- Open a brokerage account #2- Buy 2 reliable growth dividend stocks No explaining required. Learn the Basics to Investing and the Stock Market. Whether you've inherited a windfall or you're socking-away a little bit of money from each paycheck, one thought might be on your mind: How to invest.
Thankfully, learning how to invest is simpler that most folks realize. You don't need to be an active trader to be a successful investor -- in fact, for those new to investing (and even for seasoned investors), it's probably best to keep your "money moves" at a minimum. While the saying holds true that the best time to start investing was "yesterday," don't feel rushed into making investments that you don't fully understand.
Take some time to read the articles below: They discuss the stock market, bond market, mutual funds, exchange-traded funds (ETFs) and other financial basics -- all written for beginners. Once you learn to invest, you can act with confidence and set yourself on a path to financial freedom. 13Google + Moneychimp: learn Stock Investing, Index Funds, Valuation Models, and more. Investing: Stock market, money & financial investment advice.