FundRobot » Money Funds » Stock markets and investing for dummies?

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Old   #1 (permalink)
 
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Default stock markets and investing for dummies

Hi i am 22 years young working a full time job and going to school supporting my mom. I have about $2,300 saved up in my bank account. Have like 3 traffic tickets i need to pay which is roughly around $1,000 all collectively:(( im broke after that.. But i want to invest in stocks, perhaps invest like $300 worth of shares. Can someone please explain how the stock market works?? Please talk english people!!..! Lol. I want to make a lot of money because im not making enough at my job right now. Thanks!!!

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Default stock markets and investing for dummies

If you're committed to investing in stocks, keep the following points in mind as you make your choices and reap your rewards. After all, stock investing is fun and frightening, sane and crazy-making, complicated and simple and you may need reminders to stay focused.
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Default stock markets and investing for dummies

First, most brokers require at least $500 to open an account (you can't trade without a broker). Next, you won't make a lot of money - especially considering your level of investment ($300). On average, stocks return about 8% a year (meaning if you invested your $300 in a stock that returned the average, you would make $24 the first year). Also, profit is not guaranteed - you could just as easily lose your investment. The rule of investing is never invest money you cannot afford to lose - in your case, it would seem you do not have an emergency fund, so you cannot afford to lose any of your investment money. Also, you cannot predict when you will need the money - what happens if you invest in a stock, it loses money and an expense comes up - you will have to sell and lock in your loss, as opposed top using your emergency fund and allowing your investment to try to ride out your losses.
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Default stock markets and investing for dummies

Forget the dream of day trading your way to wealth. "Trading" is for suckers. Start by reading "Investing For Dummies" - it's a great primer for the basics.
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Default stock markets and investing for dummies

If you have a few thousand pounds to invest you could spread your money.

first question to ask yourself before investing on the stock market is how you would feel if you initially lost money.
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