Many people think it is beyond their reach to get started in the stock market. In reality, it is not very hard at all. However, what is hard for many is knowing what to buy and being able to stick it out when things get tough.
Let's talk about how to get started. There are a number of online brokers such as ShareBuilder, Scottrade, Fidelity, and TD Ameritrade. Personally, I use ShareBuilder, but each online brokerage is a little different and has certain pros and cons. When deciding on which broker to sign up with, you want to look at how much they charge for commission per trade, if they offer automatic investing, and what features or resources they have available for their customers. More advanced investors should research the requirements for margin accounts and see if options trading is available.
Novice investors are going to care mostly about commissions (what the brokerage charges you each time you place an order to buy or sell shares of a stock). Most online brokers charge between $7-15 per trade, which is substantially cheaper than a brick-and-mortar investment house like Edward Jones where you may pay $100 per trade, not to mention annual maintenance fees or other hidden fees. The difference is that with online brokers you are on your own. You must do your own research, trust your own instinct, and keep your own records for tax purposes. This sounds intimidating, but it is really not if you have the will to learn how to invest. I did it on my own as a 24 year old who knew nothing to begin with, so anybody can do it with a little work.
I began investing in July of 2008 by purchasing 35 shares of Ford Motor Company (F) at a little over $5 per share. For those doing the math, that means my trade was $175, and that does not include the $9.95 commission I paid to make that trade. As I soon learned, it is far more wise to save up and buy a large block of shares than a small block as I had done. Since I had paid $9.95 in commission fees, Ford's stock would need to rise $.29 just to break even on my investment (35 shares x $.29 = $10.15, greater than my $9.95 commission). As you can deduce, if I had only bought 20 shares the stock would have needed to increase $.50 just to break even. This break even amount will vary depending on the number of shares you buy and the price per share you pay.
To be continued...
Monday, October 10, 2011
What is Bullify?
Naming a blog is harder than it sounds, especially for a general blog of random thoughts and ideas. Reading through tips online, I came across a few recommendations: brief, memorable, and descriptive. It doesn't necessarily have to make any sense as long as it is easy to spell and unique.
I went through a dozen names, some that I liked (but were ultimately taken) while others were cumbersome or too wordy. After throwing multiple blog names in the proverbial trash bin, I began to think about the blog's content. I am generally upbeat and wanted to convey that in the title, which lead me down the road of "bullish": someone who is an optimist regarding business and markets.
That title hints and what I will be blogging about. I have been doing some side investing in the stock market for the last three years and have done well overall despite starting out completely blind in July 2008 before the big crash. I am also a bit of a gearhead; I love automobiles and keeping up with the automotive industry. I have had a longtime interest in urban planning, stemming from time spent playing the PC game SimCity 2000 as a kid. And finally, I am an intern architect by profession currently studying for the architectural registration exams, so I may blog about that from time to time.
These four areas make up my core interests, and each interest has a tendency to overlap one another (cars vs. urban planning, market conditions vs. construction demand, etc.) I am one who does a lot of thinking, so I hope for this blog to serve as an outlet for those thoughts and grow into something more refined and concrete over time. Let's see where this goes!
I went through a dozen names, some that I liked (but were ultimately taken) while others were cumbersome or too wordy. After throwing multiple blog names in the proverbial trash bin, I began to think about the blog's content. I am generally upbeat and wanted to convey that in the title, which lead me down the road of "bullish": someone who is an optimist regarding business and markets.
That title hints and what I will be blogging about. I have been doing some side investing in the stock market for the last three years and have done well overall despite starting out completely blind in July 2008 before the big crash. I am also a bit of a gearhead; I love automobiles and keeping up with the automotive industry. I have had a longtime interest in urban planning, stemming from time spent playing the PC game SimCity 2000 as a kid. And finally, I am an intern architect by profession currently studying for the architectural registration exams, so I may blog about that from time to time.
These four areas make up my core interests, and each interest has a tendency to overlap one another (cars vs. urban planning, market conditions vs. construction demand, etc.) I am one who does a lot of thinking, so I hope for this blog to serve as an outlet for those thoughts and grow into something more refined and concrete over time. Let's see where this goes!
Subscribe to:
Posts (Atom)